After a record 85-day delay, Gov. Arnold Schwarzenegger finally signed the California state budget into law on Tuesday, Sept. 23.
The enacted 2008-09 budget will operate at around $145 billion, closing the state’s $15.2 billion deficit and implementing a stronger rainy-day fund.
Although the governor’s revised budget has restored $98.5 million in funding for the University of California system, it leaves the UCs with essentially the same amount of funding as the previous year, $3.25 billion. This lack of increased funding from the state to cover the rising costs of growth and inflation is forcing all 10 UC campuses to cut back on expenses by nearly an aggregate $100 million.
Throughout the three-month budget impasse, the universities continued to operate without state funds. With state funds representing roughly 60 percent of the universities’ core operating funds, the complete costs totaling approximately $5.4 billion, campuses experienced many difficulties.
Financial aid disbursement to students was one of the programs affected by the frozen funds. The California Student Aid Commission reports that nearly $280 million in financial aid had been delayed. Although Cal Grants are now flowing again, Ricardo Vázquez, a spokesman for the University of California, said that universities on the semester system were more affected by this particular situation. Vázquez also explained how the university made up for the lack of funding.
“In those situations where the funds weren’t available [the university] came up with funding from different sources in order to front that money to the students,” Vázquez said.
University-wide student tuition fees have also increased. Adding on to the 2007-08 7 percent tuition increase, which left undergraduate fees at $7,347 and graduate fees at $9,481, this year’s 7.4 percent increase brings tuition costs up to $8,007 for undergraduate students and $10,376 for graduate students. Although the tuition increase was approved back in May and was not directly caused by the budget stalemate, Vázquez explained that the increase was how the regents were able to make up for the expected shortfall. Student fee revenue makes up another core source of funding.
The regents have not yet come to a decision in regards to faculty wage cuts.
“At this point, those are things that the [UC] Board of Regents will be looking at for the next couple of weeks,” Vázquez said.
The regents convened only a week ago, deciding that they are considering a special meeting to approve the revised budget plan.
According to information from Paige Macias, Associate Vice Chancellor of Administrative and Business services at UC Irvine, no UCI employee was ever subjected to a cut in pay. There were 48 employees on projects that were directly state funded who were affected, but, as with Cal Grants, their salaries were transferred into other funding sources.
Cathy Lawhon, Director of Media Relations at UCI, said that one of the effects of the budget delay is that the campus cannot hire highly paid, distinguished professors. However, she explained that the university is working to reduce the likeliness of such circumstances.
“Most of the cuts [the university] tries to take out of staff and administrative levels; they work really hard not to affect the academic student professor realm,” Lawhon said.
David Brownstone, a UCI economics professor, explains that the economics department has had to reduce the number of lecturers, resulting in fewer but larger classes.
“In the short run the biggest problem…is going to be managing course sizes and offerings. … In the longer run, the continuing budget problems will erode the quality of the UC faculty, since some of our best faculty will move to institutions that pay higher salaries,” Brownstone said.
Cutbacks have resulted in the suspension of state contracts affecting 1,000 employees UC-wide, and around 80 employees were dismissed from their positions. However, Lawhon said that none of these layoffs were at UCI.
“For the future, the whole UC system is working very closely with the state to review these budget situations and review what the ongoing situation here might be, but it’s very hard to predict,” Lawhon said.