“Citing decreased state revenue [the governor] has ordered the UC system to absorb an emergency budget decrease for the current fiscal year … The UC Regents will probably institute a student fee surcharge for the spring quarter.”
This passage, sounding like it could be drawn straight from today’s news stories, is from a City on a Hill Press article from 1981. That year the governor, Jerry Brown, instituted cuts to the University of California that led to a 28 percent student fee increase for the 1981-82 school year and 30 percent increase the next year.
State funding cuts to the UC are not a new phenomenon. The measure passed by the UC Regents two weeks ago to raise fees by 32.5 percent within the next year will mark the 15th time UC undergraduates have seen their cost of education increase by 10 percent from the previous year. During this same time, the state of California — the largest single contributor to the UC’s budget — has halved its contributions.
The Current Crisis
“The reason the UC’s are getting less state funding is because the state has less funding. It’s that simple,” said Steve Boilard, the director of higher education for the Legislative Analyst’s Office, the California Legislature’s nonpartisan policy analysts, in an email. “[This past year] the state has experienced a drop-off of tens of billions of dollars.”
In fact, the past three fiscal years in the state of California have been doleful at best. According to the California Department of Finance website, the state’s general fund has dropped from $102 billion in the 2007-2008 fiscal year to $84 billion for the current fiscal year.
“Revenue coming into the state treasury is highly volatile, resulting from the way our taxes and other income streams are structured,” Boilard said. “Almost all sectors of state government have experienced significant declines in state funding, including social services, health, resource protection.”
The State of California has four main funding priorities: K-12 education, prisons, Health and Human Services, and higher education. All four took hits in this current major economic crisis. According to the California Department of Finances, in the 2008-2009 fiscal year, K-12 education lost 20 percent of its funding from the previous year, while higher education lost 14 percent. In the same fiscal year, Health and Human Services and the Department of Corrections and Rehabilitation lost 13 percent and 17 percent of their funding, respectively.
But for the last 40 years, according to statistics on the Department of Finance website, it has been higher education that has seen continuous funding cuts, receiving a smaller and smaller percentage of overall spending from the state’s general fund.
“You can see that the state has other priorities,” said Patrick Lenz, the University of California’s Vice President for the Budget, “[and] the problem is in the state’s fiscal system.”
In 1976, higher education received 1.8 billion dollars — almost 18 percent of the $10.37 billion in the state of California’s general fund. In the 2009-10 school year, higher education will receive 12.5 percent of the $84.5 billion of the state general fund distributions. This is while the population of students in the UC system has nearly doubled since 1976, growing from 121,791 to 222,000 in 2009 according to the California Postsecondary Education Commission.
“Demand has never been greater for higher education,” Lenz said. “We [the University of California] have 14,000 more students than the state pays for — that costs an extra 155 million dollars.”
In contrast, the other three main state programs have seen increases in their proportion of the California budget since the late 1970s. K-12 education has seen the biggest increase, from 27 percent in 1976 to 41.5 percent in 2009. This can be partially attributed to Proposition 98, a ballot measure approved by California voters in 1988, which mandated a minimum amount of funding for K-12 schools and community colleges.
Funding for the Department of Corrections and Rehabilitation has also received an increasing percentage of state funds, almost tripling from 3.4 percent in 1976 to 9.7 percent in 2009. This follows the rise in incarceration rates in California. California has the third largest prison system in the country, trailing only the federal government and the state of Texas. Prisons also have powerful advocates in Sacramento. In a 2004 article Sacramento Bee columnist Dan Walters called the California Correctional Peace Officers Association, a union representing 30,000 correctional officers in the state, the “state’s most powerful union.”
The State and the Student
Money from the state along with student fees and the UC general fund (nonresident tuition and operating costs from the state and federal government) are the core of the University of California’s budget, making up 28 percent or $2.5 billion of the UC’s $19 billion in funds.
This $2.5 billion pays the salaries and benefits for faculty and staff, funds the costs of equipment and utilities and extends financial aid to students in need. The remaining $16.5 billion are restricted funds, or funds that are given to the UC for grants and research and can only be used by certain institutions, departments or labs.
The State of California has contributed less and less to the UC’s overall budget: from 29.6 percent of its expenditures in 1967 to 16.6 percent in 2008. To make up for this decrease, the UC has relied more and more on student fees, which have increased 427 percent since 1965 when UCSC first opened. In this time, student fees have risen from $245 in 1965 (calculated to inflation it is $1,875 in 2008 dollars) to its current level of $8,020 a year.
Since 1967 the percentage of student fees and state expenditures in UC’s core funds have diverged dramatically. In 1967, money from the State of California’s general fund made up 89 percent of the UC’s unrestricted core funds, while student fees made up 6 percent. In 2008, state funds made up only 58 percent while student fees contributed 30 percent.
“Clearly,” Lenz said, “there is a disconnect with the state of California and its system of higher education.”
While UC appropriations from the state of California ebb and flow along with the revenues, neither California citizens nor university leaders see a way to fix this issue.
“The financing of higher education is broken,” said UC President Mark Yudof in an interview with UC student media organizations.
Yudof said he was hesitant to push the UC to ask for refinements in the state’s appropriation process.
“I don’t really think a public university can be the leader in actually proposing reforms,” Yudof said. “I don’t want to politicize us like that. But we stand ready to cooperate with whoever is seriously thinking about these issues … I guess the right role for the university is to play a facilitating role.”
But in an interview with the Sacramento Bee, Yudof cemented the UC reliance on state funding.
“I still think the primary responsibility [of funding] lies with the state of California,” Yudof said. “I have not given up on the state.”
In October, President Yudof issued a report calling for “an expanded federal role” in higher education and asked UC affiliates to “aggressively lobby our lawmakers in Sacramento to have … our funding restored.”
While university leaders are in a quagmire over reliance on the state and its lax funding, residents of California pointed their anger at state officials. The Public Policy Institute of California (PPIC), a state-based think-tank, released a poll earlier this month called “California and higher education” that surveyed Californian’s sentiments on higher education.
Those polled were critical of California’s leaders, with 61 percent disapproving of Governor Schwarzenegger’s handling of public higher education while 68 percent disapproved of the legislature’s job on the same issue.
Seventy percent characterized budget cuts to higher education as a “big problem,” while 62 percent were very concerned about increasing tuition and fees for students to deal with state budget cuts.
While 72 percent of those polled believed in the importance of California’s public higher education system to the “quality of life and economic vitality of the state over the next 20 years,” 56 percent of those polled were unwilling to pay higher taxes to make up for state budget cuts to higher education and 68 percent of those polled did not want to increase student fees for the same reason.
“[This poll] came out saying how important the University of California is to Californians,” UC Regent Chairman Russell Gould said. “[Sacramento must] fund it. Stand up for it and fund it!”
The Legislative Analyst’s Office recently estimated that the State of California is facing a $20.7 billion budget gap for the impending 2010-2011 fiscal year.
Next year, if faced with similar cuts from the state, Yudof did not fully rule out any further fee increases.
“I can’t make any categorical promises,” Yudof said, “but I would be very reluctant to do that.”