UC budget crisis

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New LAO Report on (More) State Revenues

Byuclafaculty

The Legislative Analyst’s Office has released a commentary on the governor’s May Revise budget proposal.  It’s headline feature is that LAO expects higher revenues than the governor projects.  That extra money is not pure gravy since it interacts with the Prop 98 formulas for K-14.  Nonetheless, the report will become part of the legislative process and negotiations which will go on between the governor and legislature.  The governor wants to be cautious and his way of doing it is to tilt toward less optimistic revenue projections.  LAO has a lot of cautionary notes in its report – things that could…

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The official response

Byuclafaculty

If you are wondering about the official UC response to the governor’s May Revise budget proposal, here it is:  Patrick Lenz, the University of California system’s vice president for budget and capital resources:   With this proposal, the governor is continuing his multi-year funding commitment to increase the University of California by 5 percent in the 2013-14 fiscal year and then 5 percent, 4 percent, and 4 percent in the subsequent fiscal years. In addition, the administration is continuing its support for UC restructuring debt to achieve $80 million in annual savings. Those savings will provide not only the additional…

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A Quick Review of the May Revise and an Inadvertent Lesson on Online Education

Byuclafaculty

As per our previous post this morning, the governor’s May Revise budget was released today in a presentation by the governor and his finance director.  But before we get to the numbers and issues relating to UC’s budget, yours truly cannot resist the following observation: There is nothing per se about online education in the latest summary document that accompanies the May Revise.  (More budget details will come out in the days to come.)  However, the online transmission of the news conference was a fiasco of jerky images, frozen audio, and total breaks in the transmission.  The effort in real…

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Governor’s May Revise (State Budget) Unveiling at 10 AM Today

Byuclafaculty

You can see it live-streamed at 10 AM at www.calchannel.com.  As noted in prior posts, bits and pieces have been leaking out as is traditional.  From the UC perspective, the elements to watch are contingent allocations based on performance goals and earmarks such as for online education. Another tradition is advance interpretation in the news media:http://blogs.sacbee.com/capitolalertlatest/2013/05/jerry-brown-to-propose-1-billion-for-common-core-education-standards.html http://www.sacbee.com/2013/05/14/5417832/browns-revised-budget-has-more.html http://www.californiascapitol.com/2013/05/where-has-all-the-surplus-gone-gone-to-classrooms-everywhere/ http://www.news10.net/rss/article/244970/525/5-key-things-worth-watching-in-Browns-revised-budget http://www.edsource.org/today/2013/school-funding-will-be-focus-source-of-contention-of-browns-revised-budget/31977 

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May Revise Tomorrow

Byuclafaculty

Word has it that the governor will release his “May Revise” proposal for the state budget tomorrow (on Tuesday).  It is a tradition that the governor presents a revision of his constitutionally-mandated January state budget proposal about this time of the year.  The revised budget typically reflects both updated economic, revenue, and expenditure information and a political reading of what is feasible.  Tradition also has it that outlines of the budget are leaked in advance.  The leaks, as far as UC is concerned, is that there will be a contingent budget for UC linked to performance of various goals.  Note…

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Ignorance May Be Bliss – But Ignoring Won’t Be

Byuclafaculty

This post is going to be a bit complicated.  But note that you can think of ignorance in two ways.  One is just not knowing.  The other is a state of ignoring.  So here is what the powers-that-be at UC, systemwide and campus level, should know, and what they may be ignoring.  First, by now, everyone knows UC has an unfunded pension liability.  It grows over time unless adequate contributions are put into the pension fund.  Second, UC maintains a liquid cash reserve on hand to deal with ongoing needs for payments.  It maintains the reserve both for systemwide needs…

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It’s always good to hit the target but…

Byuclafaculty

We’ll let William Tell us about hitting targets. As we have noted in prior postings, the state received what seemed to be a windfall of $4+ billion in income tax revenue early in 2013 which seemed possibly related to taxpayer concerns about fiscal cliffs, etc.  But the receipts did not reverse later and a key indicator is what happened to income tax receipts in April, the big month for that tax. According to the state controller, April income tax receipts came in as expected under the governor’s budget estimate for the current fiscal year.  See below: So it appears the…

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Slow Growth

Byuclafaculty

Replacement for the Grizzly Bear on the state flag? The California Dept. of Finance regularly estimates population of the state and its local jurisdictions.  It estimates that the state’s population grew at a 0.8% rate in 2012.  Not surprisingly, the faster growing areas within the state are generally those around the Silicon Valley. It’s not an accident that the making of demographic estimates is assigned to the Dept. of Finance because population growth has a variety of effects on the state budget.  California actually has been growing at roughly the national rate since the end of the Cold War when…

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Boulware at the Regents?

Byuclafaculty

Lemuel Ricketts Boulware Today is May Day – often viewed as a labor holiday.  That happenstance brings to mind the role the governor has been playing as an ex officio regent. Governor Brown likes to show his scope of knowledge through quotations, Latin phrases, and historical references.  Earlier this year, when asked about his collective bargaining policy with state unions, he referred to “Boulwarism” as something that he wouldn’t want to do. So what is Boulwarism?  Lemuel Ricketts Boulware was General Electric’s chief bargainer with its unions in the 1950s and early 1960s.  He developed a take-it-or-leave-it style of negotiating,…

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Oil Tax for Higher Ed Initiative

Byuclafaculty

As we have noted many times, it is very hard to get an initiative on the ballot without hiring signature-gathering firms (which will cost $1-$2 million).  And if the initiative gets on the ballot, millions more will be needed for TV ads, etc., if there is opposition.  An oil severance tax to fund higher ed would clearly have such opposition – from the oil industry.  All that said, there is such an effort underway (as noted in prior posts): …Conceived by UC-Berkeley students, the California Modernization and Economic Development Act places a 9.5 percent tax on oil and gas extracted…