The University of California may have to break its promise to admit all UC-eligible students and begin turning thousands away as early as fall 2004 if the university's budget forecast doesn't improve, UC officials announced this week.

In his most dire public statement on the budget crisis to date, UC President Richard Atkinson said the university may enroll 5,000 fewer freshmen and transfer students than it had planned in 2004.

UC may also have to raise fees 30 percent, a bit more than the 25 percent increase the UC regents are expected to approve in July.

"Unfortunately, the state continues to propose deeper and deeper budget cuts as it confronts its most serious fiscal crisis ever," Atkinson said in a statement. "Raising students fees and constraining new enrollments are very painful decisions to make, and I wish we did not have to consider them. But I am convinced that the alternative -- allowing the educational quality of the University of California to deteriorate -- would be even worse."

Gov. Gray Davis has proposed $300 million in cuts to UC's $3 billion budget for 2003-04, which has touched off significant cuts in administration, libraries, research, outreach, student services and Cooperative Extension. Layoffs and plans for further layoffs are under way in most of these areas.

To make matters worse, UC officials say, both the Senate and Assembly budget versions propose an additional one-time $80.5 million reduction to UC's budget. Officials fear it may end up becoming a permanent cut. If that's the case, UC will have to seriously consider restricting enrollment, Atkinson said.

The fiscal picture darkened further when the Assembly Democrats proposed last week cutting UC's budget by $45 million more and Assembly Republicans issued a plan this week to cut a total of at least $400 million from UC's budget.

For more than four decades, UC has promised to admit the top 12.5 percent of graduating high school seniors. Students across California work hard to ensure they take the required UC courses and earn a high enough GPA and SAT score to become eligible. Although they may not get into their campus of choice, UC has always been able to guarantee them a spot somewhere in the nine-campus system. That is now in jeopardy, Atkinson said.

The UC regents will vote on fee increases at the July 16-17 meeting in San Francisco. Should fees increase 30 percent, resident undergraduates would pay an additional $1,105 for 2003-04 for a total annual fee of $4,984.