Fees May Increase After All

Gov. Schwarzenegger’s budget proposal given early last month was far too charitable to universities. This was the main spirit of the message from the budget analysis of the State Legislative Analyst’s Office’s annual report on the governor’s proposal for the 2006-2007 budget concerning university and college funding.
Every year, the LAO creates a detailed examination of all aspects of the governor’s proposal.
In the analysis released on Feb. 23, the nonpartisan office recommended solutions of moderate increases from areas such as student fees, salary hikes and other areas in order to accommodate the needs of the universities.
LAO Policy Analyst Jennifer Kuhn explained the nature of the recommendations made. The first area of discussion was addressing the student fee increases.
The analysis recommends that ‘the Legislature at least maintain non-needy students’ share of cost at the current-year level. Holding this share constant would entail modest fee increases at 3.5 percent at the UC.’
‘Non-needy UC undergraduates currently make up 33 percent of the share of total cost. There is an expectation that students hold responsibility,’ Kuhn said. ‘The fees are also still considerably lower than other institutions of higher education. We recommended to the Legislature for moderate fee increases.’
The analysis report also recommends ‘funding for enrollment growth at a rate of 2 percent.’ According to Kuhn, increased funding is needed to support new enrollment.
‘Arbitrarily, we made some assumptions and analytically looked to enrollment growth,’ Kuhn said. ‘The participation [in this area] is constant, and there needs to be more funding for new students.’
Kuhn explained the importance in increasing salaries for University of California and California State University staff.
‘There needs to be a percentage increase due to the measure of inflation of 2006-07 which is 3.3 percent,’ Kuhn said. ‘This is applied as a basis and necessary for paying the existing workload.’
The LAO’s report is not binding to the Legislature, although it is considered an authoritative review. The California Senate and Assembly take it into account while deliberating the budget.
Ricardo Vasquez, a spokesman for the UC Office of the President, commented that students should not worry about any hikes in fees for the upcoming school year.
‘The governor proposed [in his budget proposal] a buy-out for students,’ Vasquez said. ‘We do welcome the buy-out, negotiated through the previous compact with the UCs.’
The governor expected to use state funds to alleviate a fee increase for the following school year.
Vasquez hopes Schwarzenegger will stick to the compact.
‘The compact negotiated for last year spells out the treaty,’ Vasquez said. ‘It already has the elements that make fees predictable. The legislature will include this hopefully.’
H.D. Palmer, spokesman for the state’s Department of Finance, acknowledged the LAO’s report and defended Schwarzenegger’s budget proposal from January.
‘There are two different snapshots of the budget, one before and one after the winter period,’ Palmer said. ‘The governor has agreed to give more fiscal information in the future.’
According to Palmer, the governor delivered his promise to the UCs to keep fee increases minimal.
‘Before, students and parents were ‘sticker shocked,’ and the governor alleviated the situation. He agreed to a compact with the UC that the ceiling would be set,’ Palmer said. ‘The [fee increase in the] first three years was not higher than 10 percent and gave a sense of predictability and stability.’
Kuhn explained that prevention of drastic fee increases in the future inspired LAO’s stark recommendations.
‘We want to see the legislature go for moderate fee increases,’ Kuhn said. ‘If we don’t do it, expect to see steep increases in the future. We are giving these recommendations to prevent a situation. This is solid, analytical evidence.’