With California facing up to a $29 billion budget deficit over the next two years, Gov. Arnold Schwarzenegger released his budget proposal for the 2004-05 fiscal year on Jan. 9 that includes deep budget cuts. Schwarzenegger proposed a total of over $14.3 billion in reductions, including $372 million to the University of California.

The governor’s proposal for the University of California includes fee increases, significant reductions to financial aid, a reduction in enrollment for the 2004-05 school year, the elimination of state support for K-12 outreach programs and reduced spending on faculty.

The proposal, which also includes cuts of $2 billion to K-12 education and community colleges, $1.3 billion to local governments, $999 million to Business, Transportation and Housing services and $881 million to Health and Human Services, must be approved by the state legislature.

“”The governor is making difficult choices, and asking many parts of state government to sacrifice, as the state confronts a massive budget deficit,”” UC President Robert C. Dynes stated following the release of the budget proposal. “”That is understandable. But it also should be understood that these cuts, coming on top of deep previous budget cuts, would have a very serious impact on the University of California and its tradition of providing a top-quality, accessible, affordable education for Californians.””

Some students sympathized with the governor, citing a the need to balance the budget.

“”It seems like Schwarzenegger’s trying,”” Warren College freshman Andy Luke said. “”I was expecting Schwarzenegger to make some kind of crazy cut, but seeing what his budget proposal is, I’m not unhappy with the increases.””

Schwarzenegger’s plan proposes a 10 percent increase in fees for resident undergraduates, increasing the average fees paid by a resident undergraduate to $6,028 after the inclusion of campus-based miscellaneous fees. According to the College Board, the average fees at 4-year public universities is $10,636 for in-state residents.

In addition, undergraduate fees for non-residents would increase by 20 percent and graduate fees would increase by 40 percent. Students with more than 198 units would have to pay additional fees at an as-yet-undetermined higher rate. The increases have drawn strong criticism from students.

“”I’m definitely angry about budget cuts,”” Sixth College freshman Kevin Wood said. “”Tuition is already expensive enough, and I don’t think students should have to pay for the mistakes made in Sacramento. By sacrificing education, lawmakers are sacrificing the future of the state.””

The governor is also proposing large cuts to financial aid to help balance the budget. Schwarzenegger’s plan would reduce the percentage of new student fees that go toward financial aid from 33 percent to 20 percent, reducing the university’s financial aid budget by up to one- third. The proposal would also trim the Cal Grant program, which is funded by the state government, by lowering the maximum annual income allowed for eligibility by 10 percent. Cal Grants would also cease by to match fee increases.

“”I’m not very happy [with the budget proposals],”” UC Student Regent Matt Murray said. “”The big picture is the governor’s budget makes suggested cuts in many different state agencies, trying to spread around the cut. So on the one hand, it’s better than it could have been for the university. On the other hand, the governor’s budget doesn’t propose any tax increases, and I think that that’s irresponsible and leads to things like the very significant decreases in financial aid and enrollment, which is just saying that we’re going to protect the wealthy and well-off from tax increases and put the burden on the poor.””

Schwarzenegger’s proposal also calls for a 10 percent reduction in enrollment for the 2004-05 school year. The reduced enrollment would reduce the number of freshmen at the University of California by 3,200 students, putting in jeopardy the university’s ability to admit the top 12.5 percent of each year’s graduating class per the California Master Plan for Higher Education. The governor’s proposal calls for qualified applicants who aren’t accepted to attend the California Community College system under dual admissions programs and transfer to a University of California or California State University campus. This reduction would save $24.8 million in 2004-05.

Appeals to the governor by various parties to preserve state funding for K-12 outreach programs were also unsuccessful. Despite the implementation of $12.2 million in mid-year cuts and the potential elimination of state funding next year, the UC Office of the President is working to maintain outreach programs.

“”We hope to reach an agreement [with the governor and the legislature] to keep outreach funding on some level,”” UC spokesman Hanan Eisenmann said.

Other areas impacted by the proposed reduction are faculty spending, which would be reduced by $35.3 million; administrative funds, which would be reduced by $45.4 million; research, which would be reduced by $11.6 million; and funding for UC Merced, which would be reduced by $10 million.

UCOP had previously estimated that UC Merced’s 2005 opening ‹ pushed back from 2004 after mid-year budget cuts ‹ would require $20 million in state funding.

The power to implement a budget and increase fees ultimately rests with the UC Board of Regents, with the state only determining how much the university will receive in state funding. Nonetheless, the large reduction in state funding, if passed by the legislature, would put the university in a tough financial position.

“”In theory, the regents can do what they want with [state funding], but in reality it’s a compromise with the governor and legislature,”” Murray said. “”I don’t think it’s very common for the university to do something very different from what the state suggests … If the legislature accepts the governor’s budget, then the regents are in a very tough bind. But if the legislature doesn’t go along with this plan, then there’s room for compromise and flexibility.””

In the coming months, the regents and the administration will attempt to determine the cuts’ impact on the university and to what extent they could be implemented.

Murray indicated that enrollment cuts would be the Regents’ first priority, as admissions officers have already begun considering applications for the coming academic year.

Schwarzenegger expressed confidence that his cuts would resolve the budget crisis.

“”Together, the legislature and I will take California out of the poor house and make it once again a powerhouse,”” Schwarzenegger said.