On May 15 the UC Board of Regents approved a 7.4 percent average student fee increase for the 2008-09 school year.

The previous day Gov. Arnold Schwarzenegger released the May revision to his January state budget proposal. The revision restored $98.5 million in UC funding that the January budget had proposed cutting.

“We very much welcome the governor’s proposal to restore some of the funding for public higher education that had been proposed for cuts,” said UC President Robert C. Dynes. “However, the May revision still does not meet all of the University’s needs for the upcoming year.”

The May revision essentially would leave UC’s state-funded budget for 2008-09 at the same level as in 2007-08, without providing funding for employee raises, enrollment growth, inflationary cost increases, or investment in high-priority needs such as expanded student mental health services. Both spending cuts and student fee increases will be needed to address the shortfall.

The January budget proposed a funding increase for UC consistent with the governor’s compact with the University, and then applied a 10 percent, or $332 million, reduction. The May revision proposes restoring $98.5 million of that cut, leaving state funding for the University in 2008-09 roughly equivalent to the 2007-08 level.

However, funding is not provided in the revised budget for key needs that the Regents had included in their 2008-09 budget request, including funding for faculty and staff salary increases, enrollment growth, and other inflationary cost increases. In addition, the University is seeking an $8 million increase in funding for student mental health services on campuses, a priority endorsed by both the Regents and UC student organizations.

The student fee increases will generate approximately $70 million for University operations after funds for student financial aid are set aside, which will help make up a portion of the gap in state funding.

“The decision to raise student fees is always an agonizing one,” Dynes continued. “But given the current state budget situation, these increases are necessary as one part of our effort to preserve the quality and accessibility of the University’s programs to the greatest extent possible. We will take a significant portion of the income from this fee increase and return it straight to financial aid.”

Other actions to close the budget gap at UC have yet to be determined, but approximately $68 million should be realized through savings in administrative spending. As part of that effort, the Regents’ finance committee approved a 2008-09 budget for the Office of the President that reflects a budget cut of 10 percent and another 10 percent savings in programs that will be relocated outside the Office of the President.

— Ricardo Vazquez/UCOP