The UC Board of Regents last month voted 13-1 to propose a state budget for 2005-06 that would halt the cuts of the last several years and provide modest new funding for enrollment growth, student instructional programs, and faculty and staff compensation.

The board also increased student fees by 8 percent ($457) for resident undergraduates and 10 percent ($628) for resident graduate academic students over the full 2005-06 year.

Under the proposal, UC’s new state-funded budget would be $2.835 billion, or 4.2 percent more than the $2.720 billion state-funded budget for 2004-05.

The budget proposal and student fee levels reflect the "compact" reached by UC and Gov. Arnold Schwarzenegger earlier this year. This agreement sets expectations for minimum state funding levels and for student fees over a multi-year period, along with accountability measures demonstrating UC’s performance to the state. The compact is a planning framework; the Legislature and governor negotiate a final spending plan through the state budget process.

"I believe the University of California is critical to keeping California competitive in the 21st century," said UC President Robert C. Dynes. "This is not a budget that accomplishes everything we would like to, all at once. In this first year of the compact, we will largely be regaining our footing from the cuts of the last several years…"

Larry Hershman, UC vice president for budget, told the Regents that California’s increasingly knowledge-based economy requires the contributions of research universities if the state is to remain globally competitive. Employment and earning levels are directly correlated with education levels.

Over the last four years alone, UC’s state-funded budget has fallen 15 percent while its student enrollments have grown 19 percent. Beginning in 2005-06, though, the compact offers a halt to the cuts and a more stable base of funding with which to plan for the future.

The governor will issue his state budget proposal for 2005-06 in January, and the Legislature will hold hearings and make alternate budget proposals throughout the spring. By summer, the governor and Legislature will take action on a final budget.