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Office of the Chancellor / Public Affairs
Monday, January 12, 2004
 

Chronicle of Higher Education 1-12-04

Gov. Schwarzenegger's First Budget Would Cut University Funds and Raise Tuition in California
By SARA HEBEL

 

Gov. Arnold Schwarzenegger of California proposed more spending cuts for the state's public universities and recommended double-digit percentage increases in tuition in his first state budget plan, released on Friday.

The proposed cuts are part of the governor's plan to deal with a projected state budget deficit of $14-billion in the 2004-5 fiscal year.

Specifically, Mr. Schwarzenegger's budget would cut state funds for the University of California by 8 percent, or $372-million, and scale back spending on programs at California State University by 9 percent, or $240-million.

The governor, a Republican, would protect community colleges from reductions. Under his budget, funds for the state's 108 public two-year institutions would increase by $211-million, or 4.4 percent.

Under the governor's plan, increases in tuition would make up for some of the cuts at universities and would increase the money available for community colleges. Mr. Schwarzenegger proposed raising tuition for in-state undergraduates at the University of California and California State University systems by 10 percent in the 2004-5 academic year.

The jump in rates would be even greater for out-of-state undergraduates and graduate students in the two public-university systems. Mr. Schwarzenegger recommended increasing tuition by 20 percent for nonresidents in undergraduate programs and by up to 40 percent for graduate students.

At community colleges, the governor called for increasing rates by 44 percent, to $26 per credit hour. Tuition for students at two-year institutions who already hold bachelor's or higher degrees would increase even more, to $50 per credit hour, under Mr. Schwarzenegger's budget. All students now pay $18 per credit hour, which represented a 64-percent increase over the previous academic year.

Even as he urged tuition increases, Mr. Schwarzenegger called for a more predictable tuition policy, to limit the wide variance in rate increases over the state's good and bad economic times. For example, while in-state students at public universities saw a 30-percent jump in tuition rates at the beginning of the current academic year, students at California's public institutions during the economic boom of the late 1990s enjoyed a freeze, and then a 10-percent cut, in tuition rates.

Mr. Schwarzenegger said that tuition should not rise by more than 10 percent each year for California residents who are undergraduates at the state's public universities, and that the tuition rates should be tied to the rate of growth of per-capita personal income in the state.

"We must end the boom-and-bust cycle of widely fluctuating fees with a predictable, capped-fee policy for college students and their parents," the governor said earlier last week, during his State of the State address.

In his budget plan, the governor also proposed reducing the current requirement that universities set aside one-third of revenues from tuition increases for financial aid. Citing the state-budget crunch, Mr. Schwarzenegger's plan recommends that institutions instead devote only 20 percent to student aid, so that they could use more of the revenues to help absorb cuts in state funds.

The governor acknowledged that such a change might force students from middle-income families to take out more loans or to increase their families' share of the college-cost burden. Some university officials said the proposal would also threaten to reduce access to college for many students from low-income families.

On another front, Mr. Schwarzenegger's budget would provide no money for the two public-university systems to handle enrollment growth in 2004-5, even as the number of Californians attending college is booming. Indeed, the plan would encourage four-year institutions to reduce the number of new freshmen they enroll in the fall of 2004 by 10 percent, or 3,200 students at the University of California and 3,800 at Cal State.

Mr. Schwarzenegger recommended that those students, who otherwise would be eligible for admission at the universities, instead attend community colleges free. The governor's budget would encourage the University of California and Cal State to create dual-admissions processes with the community colleges that would allow those students to gain acceptance to a four-year institution at the same time they enter a community college, thereby easing the transfer process.

To help the community colleges handle more students, the governor would provide $125.1-million. That money would help support a 3-percent increase in enrollment, which would bring the total number of full-time students at the state's two-year institutions to more than 1.1 million.

Charles B. Reed, Cal State's chancellor, said on Friday that the cuts to his system's operating funds could lead the institution's 23 campuses to limit their enrollment even further. He estimated that the system would have to curtail the number of students it enrolled by 20,000 students in the 2004-5 academic year.

"We realize that everybody in California has to share some of the pain," Mr. Reed said. "What I'm concerned about is that we're not investing in California's future."

Among the governor's proposed cuts, universities' outreach programs to elementary and secondary schools would particularly suffer. State funds for that purpose would be eliminated, resulting in a cut of $33.3-million at the University of California and $52-million at Cal State.

Mr. Schwarzenegger would provide money in his budget to allow the University of California to open its Merced campus, its 10th, in the fall of 2005. However, university officials said the proposal would grant only half of the $20-million in one-time start-up funds the institution had sought.

"The governor is making difficult choices, and asking many parts of state government to sacrifice, as the state confronts a massive budget deficit," said Robert C. Dynes, president of the University of California system. "That is understandable. But it also should be understood that these cuts, coming on top of deep previous budget cuts, would have a very serious impact on the University of California and its tradition of providing a top-quality, accessible, affordable education for Californians."