University of California, San Diego

January 11, 1995
SUBJECT: 1995-96 Governor's Proposed Budget
For your information, following is the official news release from the Office of the President - University Relations regarding the Governor's 1995-96 State budget.
If you have any questions concerning this notice, please call Pamela Sanford at 534-3480.
Margaret F. Pryatel
Assistant Vice Chancellor
************************************************************************* Office of the President NEWS
Tuesday, January 10, 1995
UC News Office (510)987-9200
Gov. Pete Wilson today (Tuesday, Jan. 10) proposed a four-
year state budget plan for the University of California and the California State University to renew the state's investment in higher education.
"I am gratified by the governor's multi-year commitment,"
said UC President Jack W. Peltason in reaction. "His priority 
for higher education is an exciting signal that University of 
California is on the rebound.
       "The commitment to a framework for budgetary stability,
coupled with necessary student fee increases, is a formula through which UC can provide students a quality education and the classes they need so they can graduate in four years," he added. 
"It means they, and their families, also will have a greater measure of predictability about what their costs are going to be.
"Finally, stabilized funding," Peltason continued, "means we
can continue to improve the University's efficiency and move to 
restore competitiveness to faculty salaries over time, critical 
needs if we are to keep the University of California at the 
forefront of American universities."
UC has suffered a loss in state funding that has
necessitated $433 million in budget cuts since 1990, a slippage in maintaining competitive faculty salaries and large increases in student fees.
Under the governor's commitment, UC and CSU would each
receive a 2 percent state general fund increase in 1995-96 and annual increases averaging 4 percent for the next three years. The plan also calls for greater operating efficiencies on the part of both institutions, higher student fees and increased state funding for financial aid.
Under the governor's proposal, UC would receive $1.89
billion in state funds next year for its operating budget, an increase of $36 million or 2 percent over the current year. The University had sought a 7.9 percent or $145 million increase.
The governor's proposed budget also includes funds to hire
120 new faculty to stabilize the UC student/faculty ratio at 18.7 to 1.
In addition, support for the University's capital budget
includes the governor's proposal of about $160 million in 1995-96 and $150 million a year in the three subsequent years for building projects, with priority given to seismic, life safety, infrastructure and educational technology projects. The University had requested a $168 million capital budget for 1995- 96. Funds to pay off bonds for capital expenditures are included in the governor's budget in addition to the $36 million increase in the operating budget.
"Although the funding in the first year is less than we had
hoped for and we will need share the burden of continued lean 
budgets," Peltason said, "the increases in future years will give 
us the stability to preserve quality."
The president said a revised UC budget plan for 1995-96, as
well as a general budget plan for the following three years based on the governor's proposal, will be developed for presentation for discussion at UC's Board of Regents meeting Jan. 18-20 in San Francisco.
However, to allow adequate time for the Regents to fully
discuss and consider the issues, Peltason said a vote on any recommendations will be delayed until a subsequent Regents meeting.
Peltason said while the governor's proposal recognizes that
a student fee increase will now be necessary to help balance UC's budget, the size of a fee increase remains to be determined. He stressed, however, that any increase in student fees will be only a portion of what the University will use to reconcile the difference between the University's budget request and the amount of funds provided in the governor's proposed budget.
As in recent years, at least a third of any fee increase
would be set aside for student financial aid, Peltason said. In addition, the governor has pledged to provide increased financial aid through the state-sponsored Cal Grant financial aid program.
The Regents proposed budget also called for 5 percent raise
for faculty in addition to merit increases as a first-step in a 5-year plan to bring faculty salaries back to the average of comparable institutions. Faculty salaries in 1994-95 lag 7.5 percent behind comparable institutions. The Regents budget also called for a 5 percent raise for staff.
Competitive faculty salaries is also a goal of the
governor's plan, but Peltason said the size of next year's proposed salary increases will have to be reconsidered in light of the governor's 1995-96 budget proposal.
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