UC among losers as state revenue falls short

By From page A1 | December 14, 2011

The University of California will shoulder $100 million of $981 million in automatic midyear budget cuts, Gov. Jerry Brown announced Tuesday.

The latest cuts were triggered by revenue falling $2.2 billion short of the sunny $88.5 billion the Legislature counted on when it enacted the 2011-12 budget.

Effective Jan. 1, the cuts also will include:

* $248 million from school busing;

* $102 million from community colleges;

* $101 million from in-home health care; and

* $100 million each from the California State University system and services for the developmentally disabled.

In what passes for good news, K-12 education will take $79.6 million in cuts — far less than the $1 billion school districts had feared.

For the Davis school district, the cut to transportation likely will result in a $75,000 reduction, Associate Superintendent Bruce Colby said. If the K-12 reduction amounts to about $11 per student — a figure quoted in some reports — it would mean another $90,000 cut to the district.

For now, UC should be able to bridge the gap by drawing on surplus funds from payments to its employee health and welfare plans, spokesman Steve Montiel said. Campuses will not be asked to make further cuts, and no midyear tuition increase is planned.

“We’re not surprised but we’re disappointed (by the midyear cut),” he said. “We’re requesting that it be considered a one-year cut, not a permanent reduction … If it’s (a permanent cut), we’ll have to look at other revenue sources, and that would include tuition.”

Montiel called UC’s planned bridging strategy “a temporary kind of thing.”

“It can work for now, but it’s not a long-term solution. We’ll continue working with state officials to try to develop a plan for long-term stability,” he said.

Since the beginning of the recession, the state has cut about 25 percent of the general funds for the UC and CSU systems, prior to the round of cuts announced Tuesday. The UC Davis campus is facing a $132 million shortfall this budget year because of state cuts and fixed-cost increases, like employee pension contributions.

The cost of tuition has doubled since 2003-04, meanwhile, with the annual estimated cost for a California undergraduate at UCD now tipping the scales at $31,200, including campus fees, books, room and board and other expenses.

Brown and fellow Democrats in the Legislature had hoped for a $4 billion increase in tax revenue through the current fiscal year, which ends June 30. The budget they passed last summer without Republican support was based on a combination of spending cuts, fee hikes and overly optimistic revenue projections.

“I think we’re very fortunate that at least we got half the revenue, and therefore the trigger cuts are under a billion instead of almost $2.5 billion,” Brown said at a news conference. “We did hope for more, and we got more, but not as much as we wanted.”

The budget passed by Democrats and signed by Brown included automatic midyear spending reductions — known as “trigger cuts” — if revenue projections don’t pan out.

Brown has said the move was necessary to prevent the state’s credit rating from deteriorating further.

California currently faces a $3 billion shortfall and is expected to face a $10 billion deficit for 2012-13, resulting in a $13 billion gap over the next 18 months.

California’s general fund, its main checkbook for paying most state expenses, has dropped from $103 billion at the start of the recession in 2007 to $86 billion this year, a decline of more than 16 percent. Lawmakers have been making billions of dollars in cuts each year to cope with plunging tax revenue.

After GOP lawmakers opposed Brown’s proposal to place a question on taxes before voters, he has introduced his own tax initiative that he hopes to bring before voters next November.

Brown said he wants to temporarily increase taxes on the rich, starting with individuals making more than $250,000, and raise the statewide sales tax by half a cent, to 7.75 percent. The proposal would generate about $7 billion a year for five years.

The governor received a boost on Monday, when a new Public Policy Institute of California poll found 65 percent of 1,012 adults surveyed support his tax plan.

— The Associated Press and Enterprise staff writer Jeff Hudson contributed to this report. Reach Cory Golden at [email protected] Follow him on Twitter at @cory_golden

Cory Golden

Cory Golden

The Enterprise's higher-education and congressional reporter. http://about.me/cory_golden
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