Regents Tackle Cash Shortage

    Chancellor Marye Anne Fox addresses the incoming freshman class at the 2008 Welcome Convocation and Dinner event Sept. 21 on RIMAC Field. This year saw the largest number of applications in campus history, with a total of 19,690 freshman applicants admitted for fall 2008 and winter 2009. The magnitude of the university’s ever-growing applicant pool has UC officials worried over whether the 10-campus system will be able to support such continued growth, considering the stagnancy of state funding.

    Following the longest budget impasse in California state history, legislators early last week signed the final draft of the 2008-09 state budget, ending an 80-day stalemate over the document and guaranteeing the University of California significantly less funding than petitioned for by the UC Board of Regents in its request earlier this year.

    Maintaining essentially the same amount of funding the UC system was allotted in the previous fiscal year, the new state budget sets the university’s operating funds at a total of $3.256 billion. This fall, approximately 5,000 new students entered the UC system, an enrollment figure university officials say will be hard to maintain in the future.

    “It is difficult to conceive how the university could continue taking additional students year after year when the state is not providing the funding to support this additional enrollment,” UC Vice President for Budget Patrick Lenz said.

    The UC system kept its promise to enroll all eligible students this academic year, but dwindling state funds will likely jeopardize the continued success of this guaranteed admissions policy.

    “We believe very strongly that the state needs to be funding public higher education at a level commensurate with our needs if our institutions are to continue serving the people of California well,” Lenz said.

    Because the signing of the budget was so delayed, the UC system has immediately begun scrambling to find wasys of cutting campus costs so as to best fulfill obligations to both students and staff.

    “Since the governor signed the budget this past week, it is difficult to project what cuts will have to occur at the campus level,” Lenz said. “[The University of California] must protect the quality of education delivered to our students to ensure reasonable class size, the ability for students to get the course sections they need and the opportunity to graduate in a timely manner.”

    While the final state budget does restore almost $100 million that was originally scheduled to be cut from the university’s budget, campus officials are still hard-pressed to compensate for the lack of a projected $100-million funding gap by utilizing reserve funds and cutting back on spending to mediate a variety of costs, including those stemming from inflation.

    “The year-to-year funding from the state in the UC budget was reduced by only $20 million,” Lenz said. “However, the additional enrollment growth, current compensation costs, increasing health benefits and increasing energy costs will require campuses to find over $100 million to support these costs.”

    As the budget stalemate dragged on in the Legislature, anxiety arose over how the UC system would cope with the lack of a finalized budget at the start of the 2008-09 academic year. The regents’ final budget could not be officially enacted until a signed state budget had been produced.

    Had the impasse continued, the UC system would have resorted to the use of “non-state” resources, including student fees, research funding and endowment funds, Lenz said.

    “State funding pays for the core educational program at [the University of California], but as a whole, the university has a variety of funding sources,” UC Office of the President spokesman Brad Hayward said. “Because of those multiple funding sources, we were able to borrow internally to get through the state budget impasse without a great deal of pain, and that probably would have continued through November.

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