The Legislative Analyst’s Office has prepared a summary of last June’s budget deal. It includes an analysis of higher ed funding and all other major programs. Also described is the trigger mechanism that could lead to more cuts in the UC budget should forecast revenues not arrive as expected. You can find the report at: http://lao.ca.gov/reports/2011/bud/spend_plan/spend_plan_081211.aspx
You will have seen the headlines about how state revenues fell short of budget projections, potentially threatening a pulling of the budget trigger that would cut more from UC’s budget. It is true that the budget was based on optimistic revenue projections. And it is true that the underlying economy does not look to be supportive of such optimism. However, the controller’s report on cash receipts on which the headlines are based is not illuminating. Much of the forecast revenue that did not appear came from miscellaneous sources such as estimates of abandoned property that gets transferred to the state….
Yesterday’s blog entry reminded you of the unpleasant “trigger” built into the California state budget which is aimed (in part) at UC. If you would like to relive the formulation of that budget, here is a write-up (warning 60+ pages) from a draft chapter for California Policy Options 2012 by yours truly. You can read it below: Open publication – Free publishing – More california If the above causes problems with your computer, you can download the pdf file at: http://issuu.com/danieljbmitchell/docs/reallynomentalreservations
Just a reminder – as you are perusing news about current economic trends – that the California state budget signed last June with smiles all around has a “trigger” formula. If tax revenue falls short of its (relatively optimistic) projections by specified amounts, further cuts occur – including cuts to UC. Sagging economies are not good at producing a lot of tax revenue. Perhaps this old clip from the 1970s has some relevance as you cogitate on that fact and the more general scene:
UC has maintained a kind of cautionary balance for its health plans meant to smooth out sudden bumps in health care premiums. Since the state budget has squeezed the UC budget – including using UC as a loan department – the Regents approved various actions at their July meeting to try and deal with the cash crunch. Among these was tapping the health reserve. As the letter below (a public document I have been assured) indicates, the systemwide University Committee on Faculty Welfare has expressed concern about completely depleting the fund. Apparently, that is not the intention at this time,…
The Sacramento Bee today runs an article on a shift in the new state budget towards “fees” and the impact on particular households. Temporary tax extensions ended in the last fiscal year. The legislature raised certain fees as a result. However, as the excerpt above shows, the dramatic fee increases occurred at UC and CSU where tuition went up, not directly by action of the legislature but through the governing boards of the two systems. The full graphic from which the excerpt above was taken and the accompanying article are at: http://www.sacbee.com/2011/07/24/3790500/california-lowers-taxes-raises.html
Bill to curb California college execs’ pay raises (excerpts) Nanette Asimov, San Francisco Chronicle, July 19, 2011 Days after California’s public universities handed lucrative new pay and bonuses to three executives and a chancellor while raising student tuition, a state senator has introduced a bill to make such pay increases illegal in tough economic times. The bill, filed Monday by state Sen. Leland Yee, D-San Francisco, would prohibit executive pay increases at the University of California and California State University in years when the state does not raise its allocation to the schools… On Friday, UC regents gave a 24…
California’s University of ATM Joe Mathews, PropZero (KNBC), 7-19-11 California’s public university systems aren’t cash machines. But the state is treating them as such. Consider what’s happened just this year to the University of California and the California State University systems. In March, the legislature and governor took $500 million from each system to balance the budget. Then in June’s budget agreement, the state took another $150 million each. But the withdrawals from this strange ATM doesn’t stop there. The budget includes provisions that could trigger another $100 million each in cuts in the likely event that tax revenues don’t…
It’s now routine. The legislature cuts the UC budget and the Regents raise tuition. From Capitol Alert, 7/14/11: University of California regents today voted to raise tuition by about $1,070, sending the total cost to $12,192 for the upcoming school year. After a recently approved $650 million cut in state funding, UC regents said they had no choice but to raise tuition to close about a quarter of the system’s $1 billion budget deficit. When combined with a previous hike, tuition will be 18 percent more — about $1,890 — in fall 2011 than it was in fall 2010. Each…
Our previous post noted that State Treasurer Lockyer recently said he wouldn’t be surprised if the budget trigger – that gets pulled if sufficient tax revenues don’t appear – would in fact be pulled and would hit UC with another $100 million cut. For your continued enjoyment, here is some more good cheer from the Treasurer: Lockyer warns that spending cap could spell doom for higher ed Steven Harmon, Contra Costa Times, 7/14/11 State Treasurer Bill Lockyer warned that a spending cap that the Legislature qualified for the ballot will do untold harm to colleges and universities if approved by…
