University of California, San Diego

November 25, 1996
SUBJECT: Board Of Regents Adopts Budget Proposal For 1997/98
For your information, following is the official news release from the Office of the President - University Relations, regarding the Board of UC Regents adoption of the 1997/98 budget proposal.
If you have any questions regarding this notice, you may contact me at 534-6590.
Margaret F. Pryatel
Assistant Vice Chancellor
Friday, November 15, 1996
Mike Lassiter (510) 987-9200
A 1997-98 budget proposal which would provide the University of California with slightly less state support than it received in 1989-90 was adopted today (Friday, Nov. 15) by the UC Board of Regents at a meeting in San Francisco.
"The budget request is the minimum needed to maintain quality and 
     ensure access," said Larry Hershman, UC associate vice president and director of the budget.
The budget calls for general purpose expenditures of $3 billion, exclusive of debt service on bonds, an increase of 4.8 percent or $136 million over this year. The Regents took no action regarding student fees, deferring those considerations until January when Gov. Wilson announces his proposed state budget.
Based on the governor's four-year compact with higher education, the university can expect at least a 4 percent or an $80.5 increase in state funding for next year for a total of $2.04 billion. That is slightly less state funding than UC received in 1989-90.
In the last two years, the governor and the legislature have provided extra state funds above the compact that eliminated the need for a student fee increase. The compact calls for annual state funding increases averaging 4 percent for UC and annual student fee increases averaging 10 percent.
The UC budget for 1997-98 anticipates a general student fee increase of slightly less than 10 percent unless extra state funding is available again next year to "buy out" the fee hike.
The Regents said buying out the fee increase for a third consecutive year will be among the university's top priorities if extra state funds are provided. Other priorities in the event of additional state support would be to:
* Restore faculty salaries to the average of comparison Institutions next year. The budget now calls for closing the gap over the next two years.
* Expand academic outreach programs.
* Expand the Industry-University Cooperative Research Program to speed the movement of research from the laboratory to the market place.
* Match a proposed $40 student fee to expand instructional technology efforts.
* Fund ongoing building maintenance.
"We are encouraged by the state's growing economy and are hopeful that 
     additional funds will be available to fund needs beyond what can be 
     funded through the compact," Hershman said.
The proposed budget reflects the university's minimum needs if it is to maintain quality and provide continued access to all qualified California high school graduates who wish to attend UC and provide the classes they need to graduate in a timely fashion. Applications for enrollment are at an all-time high and graduation rates have never been higher in the history of the university.
The budget implements the second year of a three-year plan to restore competitive faculty salaries. This would bring faculty salaries within 3 percent of the average of comparison institutions. Since 1990-91, faculty teaching loads have increased by almost 7 percent.
The budget request also recognizes the increasing importance of instructional technology by building upon the approximately $55 million the university already spends annually on instructional technology.
Recommended is a $40 general student fee for instructional technology that would directly benefit students. After setting aside a third of the revenue for financial aid, $4 million would be generated from the fee to provide students with better access to state of the art technology, improvements to the university's electronic network and expanding the use of technology in classrooms.
A matching $4 million from the state above and beyond the compact would be sought, as would in-kind contributions from industry. Universities across the nation are increasingly adopting such fees, and access to state-of-the-art technology is seen as an important way to attract top students and faculty.
As for general student fees, they have not increased in two years. The recommended fee increase of $330 per student would generate about $49.5 million in new revenue, with a third or approximately $16.5 million set aside for financial aid. The remainder would cover fixed cost increases in student programs and help fund the general operating budget.
With the proposed general fee increase and the instructional technology fee, total mandatory universitywide fees would be $4,169 in 1997-98. With the addition of miscellaneous campus fees, total mandatory fees for resident students would average $4,536 for undergraduates and $5,037 for graduate students in 1997-98. Under the recommendation, resident students would pay about 30 percent of the average cost of instruction, with the state subsidizing most of the remainder. Even with the proposed increase, UC fees would be about $500 less than the average of the four most comparable public universities.
An accompanying increase in financial aid, together with anticipated increases in state Cal Grant funding, should provide funds to cover the recommended fee increases for the 50 percent of UC students that demonstrate financial need.
A $590 increase is also recommended in out-of-state tuition. This would bring out-of-state tuition to $8,984. In addition to tuition, out-of-state students pay the general fees, thus their total fees would be about $13,500 a year.
The plan also calls for a continuation of the differential fee structure for students in selected professional schools, consistent with the plans previously presented to the Regents.
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