University of California, San Diego

January 19, 1999
SUBJECT: 1999/00 Governorís Budget Proposal
For your information, the following is the official news release from the
Office of the President - University Relations, regarding the Universityís
response to the 1999-00 Governorís Budget Proposal.
If you have any questions concerning this notice, please call me at
Margaret F. Pryatel
Assistant Vice Chancellor
Thursday, January 14, 1999
Brad Hayward (510)987-9195
The 1999-2000 state budget proposal unveiled recently by Gov. Gray Davis
contains mixed news for the University of California, UC President Richard
C. Atkinson told the Board of Regents today (Jan. 14).
The budget proposal indicates the governor's willingness to negotiate a new
higher education "compact" -- a multi-year agreement providing UC and the
California State University with funding stability in exchange for a
commitment to specific accountability measures.
The governor's budget plan also funds enrollment growth of 4,600 students
in 1999-2000, an increase of 3 percent; keeps systemwide resident student
fees level; and funds new initiatives for professional development in the
public schools.
However, the budget proposal reduces UC's 1999-2000 request for permanent
state General Fund support by approximately $50 million and also
discontinues one-time funding available in 1998-99 for core UC needs such
as instructional technology, equipment, library materials and deferred
Atkinson noted that the governor's budget was shaped in the context of
slower economic growth in California and projections of a $1 billion
state budget deficit under current state spending policies. As a result,
the budget offers limited spending growth to all state programs.
"The university looks forward to working with the governor and his staff
on both a new compact and a modified 1999-2000 budget plan," Atkinson said.
"I am hopeful that negotiations on the compact, coupled with revised state
revenue projections this spring, will produce a final budget that allows
UC to fulfill its commitments to the state."
Mandatory systemwide student fees for California residents would remain
level under the governor's budget proposal, marking the fifth consecutive
year in which these fees have not been raised. The plan does call for a 10
percent ($940) increase in nonresident tuition. The Regents will consider
nonresident tuition levels at a future meeting.
Two special initiatives for UC are included in the budget. One is a $13
million initiative to help improve public school performance, focusing on
the development of three programs: Reading Professional Development
Institutes to provide summer instruction in the teaching of reading for up
to 6,000 K-3 teachers; Teacher Scholars, a 15-month program for prospective
teachers leading to a teaching credential and master's degree from UC; and
the Governor's Principal Leadership Institute, a two-year curriculum to
train school principals.
"The governor's education initiatives provide UC and CSU with the
opportunity to work collaboratively on an issue of critical importance to
the state's future," Atkinson said. "It will take the resources and
expertise of both institutions to meet the educational challenges outlined
by Governor Davis."
The second special initiative would provide a $2.5 million augmentation to
support alcohol and substance abuse research.
The $2.57 billion budget proposal for UC also continues $9.9 million
provided in 1998-99 to support planning and development of UC Merced.
However, the governor's budget reduces by $50 million UC's requested
1999-2000 base budget increase of state General Fund support -- funding
that the university requested to cover cost increases for current programs,
salary increases and other core needs.
Additionally, the proposal discontinues more than $70 million in one-time
funding provided in 1998-99 for deferred maintenance, instructional
technology, equipment and libraries.
Overall, the plan increases UC's total state General Fund budget for
1999-2000, including both permanent and one-time funding, by $46 million,
or 1.8 percent, over the 1998-99 level. Permanent state General Fund
support for the university, a measure that does not reflect the proposed
reduction in one-time funds, increases by $118.5 million, or 5 percent.
Larry Hershman, UC vice president for budget, said the increase is not
sufficient to cover 3 percent enrollment growth, keep student fees level
and fund growth in the university's basic program needs.
"The $50 million reduction from the Regents' workload budget and the loss
of one-time funding for core needs would hurt the university a great deal,"
Hershman said. "Before we propose a plan to cope with these reductions,
though, we will work with the governor to see if we can reach agreement on
a more satisfactory funding level in the context of a new compact."
The governor's budget fully supports the Regents' $210 million budget for
capital improvements, which will be funded by general obligation bonds
authorized by voter approval of Proposition 1A last November.
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