SUBJECT:

1998/99 State Budget

For your information, the following is the official news release from the
Office of the President - University Relations, regarding the 1998/99
State Budget.

In 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
Friday, August 21, 1998
Brad Hayward (510) 987-9195
brad.hayward@ucop.edu

STATE BUDGET INVESTS IN UC ACCESS AND OUTREACH

The 1998-99 state budget signed into law today (Aug. 21) by Governor Wilson
makes a substantial investment of new funds in providing California students with
access to an affordable, high-quality University of California education.

The budget funds the enrollment of 6,000 more UC students than were
previously funded by the state and provides the resources necessary to reduce
UC student fees by 5 percent for California resident undergraduates. The new
spending plan also gives a major boost to UC’s outreach programs to students
in the public schools and is anticipated to double the amount spent by the
state and university on these efforts to improve academic performance and
encourage college attendance.

"This is the best budget of the decade for the University of California, and
it will be welcome news to the entire University community," said UC President
Richard C. Atkinson. "We are grateful to the governor and the Legislature for
recognizing the contributions of the University to the state’s economic vitality,
and for committing new resources to place a UC education within the reach of
more Californians than ever before."

The budget not only meets but exceeds the provisions of the fourth and final
year of the state’s higher education compact, a plan to restore fiscal stability to UC
and the California State University system following the drastic cutbacks of the
early 1990s.

Permanent General Fund support for the university will rise $270 million in
1998-99. With the addition of $70 million in one-time funds to address critical
infrastructure needs, the General Fund budget totals $2.519 billion, an increase
of $340 million (15.6 percent) over 1997-98. Because a portion of this state
funding increase offsets a loss of student fee revenue, however, UC’s real
spending from state funds and fee revenue will rise 11.4 percent in 1998-99.

UC mandatory systemwide student fees have not been raised since 1994, and
under the new budget these fees will decrease 5 percent this fall to $3,609 per year
for California resident undergraduates. This amount does not include miscellaneous campus
fees, which bring the total average fee for resident undergraduates to $4,037 per year.
Mandatory systemwide fees for California residents in graduate or professional degree
programs will remain at 1997-98 levels. Tuition for out-of-state students will rise 4.5
percent, or $400, consistent with state policy tying nonresident tuition to the cost of
education at UC and to the fees at comparable institutions.

The budget provides $43.6 million in new money to fund 6,000 more UC
students than were funded by the state in the previous year. This increase consists of
enrollment growth, already-enrolled students who had not previously been funded by the
state, and an additional 800 undergraduates in engineering and computer science who
will be enrolled in an effort to help address the state’s workforce needs in
targeted fields.

The Legislature and governor provided an additional $33.5 million in UC’s
budget for outreach programs to K-12 students, and the university will add $5 million,
producing a $38.5 million increase. Because the budget also requires a match of K-12
money totaling $31 million, spending on UC outreach programs is anticipated to reach
approximately $135 million in 1998-99, more than double the $65 million spent in 1997-98.

Under a plan developed by UC’s Outreach Task Force, the university is
intensifying its efforts to address inequities in K-12 educational opportunities as a means
of better preparing students from all backgrounds for UC admission. The new funding
will allow these services to be significantly expanded, consistent with the task force’s
recommendation that spending on the university’s outreach programs be doubled.

"This is a major boost for programs that are a very high priority for the
Board of Regents and for this administration," Atkinson said. "We are pleased that the
governor and the Legislature, by this budget action, have given their endorsement to the
goals and implementation strategies outlined by the Outreach Task Force."

The outreach money includes $15 million to expand UC’s partnerships with
K-12 schools, an initiative aiming to improve long-term student performance. Another $15
million will expand UC’s student-centered academic programs, such as MESA, Puente and
Early Academic Outreach, which provide tutoring, counseling and enrichment to K-12
students.

The increase in outreach funding also includes money to expand services
promoting UC transfer opportunities to community college students; extend the university’s
outreach activities in the Central Valley; provide more informational outreach to
students, families, teachers and counselors; and evaluate the long-term effectiveness of the
outreach effort.

The budget also includes:

Funding for a 2.5 percent salary equity adjustment for UC faculty, in
addition to merit increases and funding equivalent to an average 2 percent
cost-of-living increase for all UC employees. The adjustment for faculty is the final step
in a four-year plan to restore salaries to the average level at UC’s eight
comparison institutions.

$70 million in one-time funds for deferred maintenance, instructional technology,
other instructional equipment and library materials.

$11.4 million to support development of UC Merced. Of this amount, $9.9 million
consists of operating funds – a $5 million increase over the 1997-98 figure – and
$1.5 million is earmarked for development of "distributed education" centers
that will offer on-site instruction, teacher training, distance learning and outreach
activities intended to prepare San Joaquin Valley students for admission to UC Merced
and other UC campuses.

A $7 million increase for the Industry-University Cooperative Research Program. This
program, which will receive a total of $15 million in state and university funds,
promotes research partnerships between UC and private industry in fields
critical to the state’s economy. Private-sector contributions remain an important
component of the program’s funding.

A $22 million augmentation for other research initiatives, including medical research
on alcohol and substance abuse, neurodevelopmental research, and agricultural
research.

$2.5 million to increase enrollment of veterinary students at the UC Davis School of
Veterinary Medicine and to expand the school’s clinical programs into Southern
California.

$3 million for the California Digital Library, an augmentation to the $1 million
already invested in the project by the university. The digital library initially will
develop links among the UC libraries and ultimately will make the vast collections of
the UC campuses available over the Internet to anyone with a computer and
modem.

Preservation of $12 million in funding for the California Subject Matter Projects, a
program that provides professional development for K-12 teachers. A new
governance structure and other program changes accompany the funding.

Additionally, the budget includes $211 million for capital improvement
projects on UC’s nine campuses, contingent upon voter approval of a bond measure.
This figure reflects an increase from the $150 million set out in the January budget
proposal and will allow UC to accelerate several of its capital projects, primarily those
involving seismic improvements, modernization and infrastructure improvements. UC
is working with its partners in the K-12, CSU and community college systems to
encourage legislative approval of a bond measure for the November ballot.