SUBJECT:

Response to 1996-97 Governor's Budget Proposal

For your information, the following is the official news release
from the Office of the President - University Relations,
regarding the University's response to the 1996-97 Governor's
Budget Proposal.

If you have any questions concerning this notice, please call
Pamela Sanford at 534-3480.

Margaret F. Pryatel Assistant Vice Chancellor

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The following is a copy of the news release sent out today in
response to Gov. Wilson's budget proposal.
January 4, 1996

Mike Lassister
Director, News and Communications
Office of the President
News Office (510) 987-9200

     UC APPLAUDS GOVERNOR'S BUDGET PROPOSAL

Gov. Pete Wilson today (Wednesday, Jan. 3) announced that his
1996-97 proposed state budget will include the money necessary to
keep UC general student fees at the same level as the past two
years while fully funding his compact with higher education.

"I am most encouraged by the governor's proposal to the
Legislature and I thank him for recognizing the need to keep
student fees from increasing while simultaneously safeguarding
the quality and accessibility of higher education," said UC
President Richard C. Atkinson.

"I applaud the governor's recognition of the important role
higher education plays in preparing a skilled workforce for
competition in the global marketplace and the important role UC
plays in a healthy California economy," Atkinson said.

"This comes as welcome news to the university, UC students and
their parents who endured the state's most difficult economic
period since the Great Depression. It is fitting that they now
benefit from California's improving economy."

The governor's decision to add $27 million to his compact for
higher education with UC fulfills a priority set last fall when
the Board of Regents stated that if additional funds were
available from the state in 1996-97 there should be no student
fee increase.

Under the governor's proposal, mandatory student fees for
California residents next fall would remain at $3,799 a year --
the same amount since 1994-95. The amount does not include
miscellaneous student fees which vary on each of the nine UC
campuses.

Last year, the governor provided a four-year compact with higher
education that anticipated General Fund budget increases
averaging 4 percent per year for UC and California State
University.

His decision to fully fund the compact again this year and
augment it with money to prevent a student fee hike means UC will
receive a 6 percent increase in state funding -- $110 million
more than last year's $1.92 billion budget. The budget would
allow UC to go forward with a three-year plan to restore faculty
salaries that currently lag about 10 percent behind comparison
institutions by 1998-99. In 1996-97, all UC employees would v receive the equivalent of a 2 percent cost-of-living adjustment
and the equivalent to an additional 3 percent salary increase for
faculty, plus merit raises.

The compact assures that for the near term UC can sustain the
excellence of its programs, that all eligible Californians
seeking undergraduate admission will be offered a place at a UC
campus and that classes will be provided to enable students to
graduate in a timely fashion.

The governor's proposal does not affect a proposed increase in
non-resident tuition or proposed fee increases for students
entering certain professional graduate school programs.