The 2005-06 budget proposed on Jan. 10 by Gov. Arnold Schwarzenegger offers an increase in state funding for the University of California after four years of substantial cuts. The proposed increase includes funding for enrollment growth, faculty and staff compensation, and the opening of UC Merced, among other things.

Overall, the governor’s budget calls for a $97.5 million increase, or 3.6 percent, in state general funds for UC operations in the next fiscal year. This is below the 4. 2 percent increase sought by the Regents.

UC’s state-funded operating budget in 2005-06 would total slightly more than $2.8 billion under the governor’s plan.

The proposal fulfills last year’s “compact” between the governor and UC, according to President Robert C. Dynes.

“The governor’s overall budget proposal for UC is very welcome after years of cuts,” Dynes said. “The governor has fulfilled his commitments under the compact, providing many of the basic resources we need to begin rebuilding our programs…”

(More of Dynes’ observations are contained in a special edition of “Our University”
<http://www.universityofcalifornia.edu/news/ newsletter/issue16.html>.)

Among the proposed provisions is a 3 percent increase in UC’s base budget for faculty and staff. This funding will support a 1.5 percent general salary increase for all eligible employees; funding for faculty and other academic merit programs; and 1.5 percent for merit-based increases for eligible staff employees.

Additional funds are proposed to help cover the cost of increasing employee health benefits and to address equity issues where newly hired faculty and staff are paid significantly more than current employees with similar experience and skills.

The governor’s budget for 2005-06 also withdraws $17 million in state support provided to UC at the end of the 2004-05 budget process, as one-time funding outside the compact, and asks UC to take the cut in either enrollments or K-12 academic preparation programs, formerly known as “outreach.”

“The withdrawal of $17 million… is a concern to us,” Dynes said. “While we understand that the state’s fiscal condition is still serious, we intend…to seek restoration of this funding.”

Student admissions for fall 2005 will not be affected by the proposed $17 million withdrawal, and the University still expects to offer a place next fall to every eligible applicant.

The governor’s budget will now be reviewed by the Legislature, which will hold hearings over the course of the spring. Both the governor and Legislature traditionally approve a final state budget in the summer.

The governor’s budget does propose sufficient Cal Grant funding to cover the 2005-06 fee increases for eligible students. These increases are 8 percent ($457) for resident undergraduates and 10 percent ($628) for resident graduate academic students. The governor’s budget documents are at: <http://govbud.dof.ca.gov/home.htm>.