The state Legislature’s nonpartisan analyst has called on lawmakers to reject Gov. Arnold Schwarzenegger’s proposed UC fee buyout and increase the university’s tuition next year.
The governor’s proposed budget, which includes a $75 million buyout that could spare UC students from a $492-per-student fee hike in 2006-07, is only a temporary reprieve, according to a recent report released by the Legislative Analyst’s Office.
“State funds that could have been used to expand programs or cover other costs are instead being dedicated to ‘back-filing’ the fee increase,” LAO Director of Higher Education Steve Boilard said. “In the longer term, it might make a larger fee increase more likely in the future.”
From 2000 to 2002, student fees increased 40 percent, following seven consecutive years with reduced or flat fee levels in the 1990s. Long periods of stagnant fees have set up the current situation, with students bearing the brunt of large fee increases, according to Boilard.
UC Student Association President Anu Joshi blamed large student-fee hikes on the state’s fiscal irresponsibility.
“If the regents had increased fees during the late 1990s, the dramatic fee increases earlier this decade would still have happened because the state was using student fees to back-fill its own budget,” Joshi said.
The LAO’s analysis also stated that the student-fee buyout would violate Schwarzenegger’s 2004 budget compact with the university.
Under the compact, student fees would increase by no more than 10 percent annually over a three-year period. It also called for a 14-percent increase in 2004-05, followed by an 8-percent increase in 2005-06 and 2006-07.
“The compact clearly calls for fee increases,” Boilard said. “The only exceptions … are that UC can raise fees even higher if state support fails. There is no provision for not doing a fee increase.”
State Department of Finance spokesman H.D. Palmer disagreed, and defended the governor’s buyout.
Because the state’s growing economy has brought unexpectedly high tax revenue, Schwarzenegger decided to provide a “financial release for students,” Palmer said.
The LAO suggested a share-of-cost fee policy next year, under which students or families would pay a set percentage of the cost of their education, allowing only for a 3.5-percent fee increase due to inflation and increased costs.
The LAO’s proposal would provide predictability within fee levels over time and fair treatment of students, Boilard said.
The university and UCSA questioned the ability of the state to pay its share of education costs, according to UC spokesman Brad Hayward.
However, students should not be forced to absorb the state’s funding deficiencies, Boilard said.
“I find it odd logic to say that when the state — with a $125 billion budget — can’t meet its share, then students should be forced to make up the difference,” Boilard said. “Fees are the way for students to pay their fair share of their education. They should not be treated as a limitless reservoir of money from which the state can balance its budget.”
According to Joshi, students want a fee policy based on what families can afford to pay, not on the cost of instruction; however, the governor’s current compact, which is based on per capita income, is not satisfactory either.
“The current fees at UC are not affordable to California families, which makes this entire agreement a moot point,” Joshi said. “The current administration’s compact does not take into account the unmanageable hours students are forced to work, the unmanageable amount of debt students and parents are forced to take on, or the current fee levels before deciding decisions of the future.”
The university and UCSA both embrace the governor’s buyout, despite LAO’s criticisms.
“Fees have gone up dramatically over the last few years,” Hayward said. “The governor has proposed a pause for the coming year, and we think that is reasonable … to give students and their families a break from the steep increases that have occurred.”
While the governor’s buyout may provide a pause of relief, a long-term solution is still out of sight.
Boilard said that even if the buyout is approved by legislators, the university still doesn’t have what it needs: a firm policy for future fee changes.
“It could be unpopular to ask students to pay a little more next year, but I think that would be a more sound response in the long term,” Boilard said. “Unfortunately, in an election year, it’s much more difficult to take a long-term view.”
“It was a straight policy call by the governor,” Palmer said. “[LAO] has laid out their opinion and the governor has made his. The Legislature now has the final decision.”
