California Budget Takes Hit for UC Student Fees

As expected, Gov. Arnold Schwarzenegger included a major financial reprieve for students with a $75 million state “buyout” of intended University of California fee hikes in his 2006-07 budget.

Under the plan, the state would provide money from its general fund with the expectation that the university use it in lieu of a planned 8-percent fee increase next year.

UC student groups, as well as regents, have praised the governor’s plan.

“This proposal recognizes the financial struggles of many California families and helps preserve access to the university for families of all means,” UC President Robert C. Dynes stated in a press release.

The governor’s $125.6 billion state-spending plan gives a total of $11.2 billion to higher education. Overall, UC campuses would receive $3.049 billion from the general fund under the plan, a 7.3-percent increase from last fiscal year. The budget would still spend billions more than the state would take in, closing the gap with unexpected revenue from this year,

according to the Legislative Analyst’s Office.

But Schwarzenegger’s plan to use state revenue to subsidize UC fees would remove predictability from future fee levels, according to LAO Higher Education Director Steve Boilard.

“Experience over the past few decades shows that the state tends to lower fees when the state budget starts to improve, but those fees increase considerably when the state budget gets worse,” Boilard stated in an e-mail. “Many people believe that the fee increases are made worse because of the need to ‘make up’ for the lost revenue from those times fees were decreased. Our office feels that student fees should not be yo-yoing in this way.”

In November, the UC Board of Regents approved a $492 fee increase from this year, requiring students pay a total of $6,633 in mandatory system fees. However, the regents also added a provision that allowed the board to annul the hike in the event the state provided the funding to do so. The board will meet at UCSD this month to discuss and update the fee levels, which have almost doubled since 2000.

The governor’s choice to block student fee growth will pay dividends for the state, according to Richard Stapler, spokesman for state Assembly Speaker and ex-oficio Regent Fabian Nunez.

Nunez persuaded the regents to consider rescinding fee increases, under the hope that he could push Schwarzenegger to buy out the hike with state funds, Stapler said.

“If there’s any factor in this state that can equalize, it’s education,” Stapler said. “Putting money into the UC is like investment. The university is a huge economic generator for the state.”

Lobbying efforts by the UC Students Association, which included a meeting with Schwarzenegger representatives two weeks ago, were a major part of the governor’s decision, according to UCSA President Anu Joshi.

“Hundreds of students traveled across the state to fight for affordability at the November regents meeting, thousands signed postcards sent to the Speaker Nunez and hundreds of thousands of students and families will benefit from their hard work,” Joshi stated in a press release. “We are ecstatic that the governor decided to prioritize higher education and take the first step in restoring the classic legacy of accessibility to higher education in California.”

However, the governor’s plan could hurt accessibility for lower income families, according to Boilard. In 2004, the LAO published a report, which concluded that more state spending on widespread aid, such as the governor’s subsidy of fees, would reduce need-based aid, such as Cal Grants, for low-income students.

“I feel that [the state fee] ‘relief’ should be provided in the form of financial aid to needy students, and that non-needy students could, in fact, support a higher amount of their own educational costs,” Boilard stated. “At least you could increase fees to keep up with inflation.”

In addition, the governor’s cancellation of fee increases this year does not promise that there won’t be a considerable hike next year, Boilard stated. Although the 2004 state compact between the university and Schwarzenegger places a 10-percent cap on fee inflation for any given year, nothing is certain without codifying it into state law.

“In general, compacts are inevitably violated by the people who [enter] into them,” Boilard said. “Without a formal fee policy in state law, I don’t think students can count on any particular fee levels.”

Although the future is uncertain, any year without more fees is a good year for UC students, according to Joshi.

“This year’s budget shows the power of the UC student,” she said. “Now, the state and the UC know how valuable their students are, and that using them as a revenue source isn’t right.”