While California’s state budget was signed into effect Sept. 5, uncertainty continues to loom for the UC system because a provision in the agreement calls for Gov. Gray Davis to make up to an additional $750 million in funding cuts.
The decision to add a section into Assembly Bill 425, giving the governor authority to slash state funding by January 2003, was a last-minute bargaining tool to help resolve a partisan conflict that had made little headway since the budget bill was introduced to the assembly. The budget bill had been in gridlock for more than two months past the June 30 deadline for passage set by the California state constitution.
In a statement to university employees, UC President Richard C. Atkinson estimated that individual state agencies could see their funding cut by an additional 5 percent when Davis makes his reductions. However, the governor’s office officials say that Davis has asked agencies to prepare a scenario where 20 percent was cut out.
“”We are working with agencies to get a better idea of where the governor can make additional cuts,”” said Hilary McLean, spokesperson for Davis. “”Everything is in review and nothing is set in stone yet.””
Democrats had pushed for both a vehicle registration fee and an additional tobacco tax to compensate for this year’s shortfall so that funding cuts would not be as drastic. However, Republicans were more supportive of spending cuts than levying new taxes for additional revenue, and the two initiatives failed on the assembly floor.
Davis was more successful in proposing a solution to generate state funds. Net operating losses for California businesses, normally written off in taxes, will be deferred for the next two years so that the state can restore funding to state programs and agencies.
Meanwhile, there are no drastic changes to the UC budget in its signed version since the Senate’s revision in late June. The 10 percent, $32 million cut to UC research was made, as was the $10 million slashed from the Internet2 expansion project and the one-time $29 million reduction to libraries, equipment and instructional technology.
The projected cuts to outreach programs were also made. In net reductions, $7.6 million was cut from UC outreach, with ArtsBridge losing $1.2 million in funding. The K-12 School-University Partnership will see a $9 million decrease from last year, despite receiving a cushion from revenue generated by a 6 percent increase in nonresident undergraduate fee increase designed specifically to preserve the program.
The university’s teacher development programs were cut by $56.9 million, but university officials insist that some of those monies can be restored through other federal and state funds.
The University of California was able to uphold its funding increase for 7,700 additional students in the 2002-03 school year, while also being granted funding for a 1.5 percent merit increase in salaried for eligible faculty and staff.
While the budget resembles versions of AB 425 made earlier in the summer, UC officials are skeptical as to how much of the university’s funding will be maintained after Davis’ cuts.
“”We expected to be impacted in some way, but we have no idea as to how much more will be cut or when,”” said UC spokesman Brad Hayward. “”We are going to be working very hard with the state to make minimal cuts, but there is still a lot of uncertainty surrounding the situation.””
UCSD budget officials echoed Hayward’s thoughts of uncertainty.
“”We have a pretty idea of what our budget looks like for the next year,”” said Sylvia Lepe-Askari, associate budget director at UCSD, regarding the campus budget, which is due to be released in the next few weeks.
“”But then again, so many changes have been made in this year’s process,”” she said. “”We’re not expecting things to stay the same.””
