SUBJECT:

1997/98 State Budget

For your information, the following is the official news release from the
Office of the President - University Relations, regarding the 1997/98 State
Budget.

If you have any questions concerning this notice, please call me at 534-6590.

Margaret F. Pryatel Assistant Vice Chancellor

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FOR IMMEDIATE RELEASE

Monday, August 18, 1997
Mike Lassiter
Director, News and Communications
Office of the President
News Office (510) 987-9200
michael.lassiter@ucop.edu
STATE BUDGET MAINTAINS ACCESS AND FREEZES GENERAL STUDENT FEES
The governor signed into law today (Aug. 18) a 1997-98 state budget that
continues to provide University of California students with access to a
quality education and freezes general students fees for the third
consecutive year. It also provides state funding to make progress on
restoring faculty salaries to competitive levels, to expand outreach
programs to further student diversity and to continue cooperative research
with industry as a means of fueling the state's economic growth.

The budget assures for the near term the university's ability to maintain the
excellence of its programs, to continue to offer a place at a UC campus to
all eligible California residents seeking admission and to provide the
classes that students need to graduate in a timely fashion. The budget
includes funding for a 1 percent growth in enrollment, or 1,500 additional
students. It also recognizes the increasing importance of instructional
technology by building upon the approximately $55 million the university
already spends annually on instructional technology.

"This budget is a victory for our students and their families. We are
pleased the governor and Legislature made higher education a top budget
priority," said UC President Richard C. Atkinson.

"The state's commitment to an affordable, accessible and high-quality
university education is vital to California's continued economic
well-being," Atkinson added.

The budget fulfills the third year of the governor's four-year compact with
higher education to bring fiscal stability and predictability to UC and the
California State University. However, as part of the state's effort to
balance its budget, UC must absorb a one-time $12 million undesignated cut in
its state operating funds.

Atkinson said he will present a plan for absorbing the cut to the UC Board
of Regents in September. Restoring the funding, he said, will be a top
priority in developing the university's 1998-99 budget plan.

Even with the one-time cut, the state budget provides UC with a 5.9 percent,
or $121.5 million increase in state general funds over last year. The total
state general fund budget for the university will be $2.18 billion.

Under the budget, mandatory student fees for California residents this fall
will remain at $3,799 a year for the third consecutive year. The amount does
not include miscellaneous campus fees, which bring the total average fee for
resident undergraduate students to $4,166 a year. Fee increases in out-of
-state tuition and in selected professional programs will be implemented as
previously approved.

The budget also calls for:

- Funding to bring UC faculty salaries to within 1.6 percent of the average
of salaries at eight comparison institutions. This is a high priority of the
Regents, who plan to close the faculty salary gap by 1998-99. The budget
also provides funds to help staff recoup from the years of no salary
increases, making UC staff salary increases comparable to the increases state
employees received in previous years.

- An additional $1 million to expand student academic outreach efforts,
another priority set by the Regents last fall. The university already makes
a substantial investment in outreach programs, which are aimed at increasing
the enrollment of high-achieving disadvantaged students. Of the extra money,
$250,000 will be devoted to UC outreach efforts in the Central Valley, adding
to the $250,000 in state funding earmarked for Central Valley outreach last
year.

- Making permanent the $5 million provided in state funding last year for
UC's Industry University Cooperative Research Program to speed the transfer
of research from the laboratory to the market place. Combined with $3
million in university funding, the matching grant program is expected to
generate $10 million from private industry. The program joins UC researchers
and students with industrial partners to develop technological innovations
that drive the state's economy, attract investment and provide jobs.

- Funding for legislative initiatives, including $5 million to expand
academic programs and continue planning for a 10th campus in the Central
Valley.

- $2 million as the state's commitment for operation of the California
Supercomputer Center in San Diego that is expected to draw $35 million a
year in federal support in each of the next five years.

The budget also provides $150 million for capital improvement projects
on UC's nine campuses. The funding comes from Proposition 203, the higher
education bond approved by voters in March 1996. It also makes available
another $21.7 million in state funds to match federal funding for earthquake
repairs at the UCLA Center for Health Sciences.

Separate from the budget, the governor and the Legislature have
adopted legislation that will make UC eligible for more federal funding to
support the clinical training of medical students and medical residents.