Boom Budget in California

California governor proposes funding increases for public colleges, averting showdown with the University of California over tuition hikes, but Cal State faculty remain unhappy.

May 15, 2015
California Governor Jerry Brown

California is raking in a surprising amount of tax revenue. And on Thursday Jerry Brown, the state’s governor, said he wants to send some of that surplus to California’s public colleges.

Brown’s revised budget proposal would increase funding levels for all three public higher education systems. It also ends a showdown over tuition increases with the University of California.

Leaders of the 10-campus system had planned five consecutive years of tuition hikes of 5 percent, which would have raised in-state tuition and fees from $12,192 to $15,564 by fall 2019. The controversial increases were necessary without substantial new revenue from the state, UC officials said, to preserve the system’s quality. Students and others had protested the plan.

Janet Napolitano, president of the University of California system, said on Thursday that she and the governor reached a “historic agreement” to prevent the tuition increases. Under the deal, which still requires the Legislature’s approval, UC would get a 4 percent base budget increase for the next four years.

In addition, the state would pony up a one-time payment of $436 million over three years for UC’s swelling pension obligations. In exchange, the system will create a lower benefit cap for employees hired after July 2016.

The agreement also includes $25 million this year for deferred maintenance and another $25 million for energy efficiency, the system said.

The system will freeze tuition for its 244,000 students at the current level for two years, which would be six consecutive years of no increases. However, the system’s Board of Regents will authorize tuition increases on out-of-state students of up to 8 percent a year.

“Governor Brown and I were both focused on the future of California as we worked toward this agreement,” Napolitano said in a written statement, “which will enable the University of California to continue its role as the nation’s preeminent public research university.”

The system also said it would ensure that at least a third of its new students enter as transfers. It will “make clear pathways” to a three-year undergraduate degree, eliminate course bottlenecks and improve academic advising.

The California State University System, which enrolls 450,000 students at 23 campuses, also would receive an additional funding increase under the proposal. But the system would not receive as much new money as UC.

Brown’s budget seeks $38 million in additional funding for the system, which would be aimed at improving graduation and transfer rates. Combined with the $120 million in new funding Brown proposed in January, Cal State would receive a total increase of $158 million. The system would also get $35 million for energy efficiency projects.

Tim White, the system’s chancellor, said in a written statement that the budget “proposal is an important step towards reinvestment in a well-educated California citizenry and knowledge-based economy.”

Cal State faculty leaders were critical of Brown’s plan, however. The California Faculty Association, a union representing 23,000 professors and other system employees, said the money isn’t enough to solve the issues facing students and faculty.

“Failing to invest -- again -- in the CSU tells our students and their faculty that they aren’t a priority,” said Lillian Taiz, the association’s president and a history professor at Cal State’s Los Angeles campus, in a written statement. “Investment in the CSU is an investment in California’s future.”

The leader of the state’s Senate, Kevin de Leon, a Democrat from Los Angeles, agreed with Taiz.

“We are pleased UC students and their families will avoid paying higher tuition next year. But CSU, the workhorse of our higher education system, has been shortchanged,” he told the San Jose Mercury News. “We have to support both of our public institutions of higher learning to make sure college is accessible to as many Californians as possible.”

Brown’s budget revision includes a $600 million increase for the state’s 112-campus community college system, which enrolls 2.1 million students. That is in addition to a $1 billion increase the governor proposed in January.

The new money will help the state’s community colleges recover from deep budget slashing during the recession, said Brice Harris, the system’s chancellor. The two-year colleges would have enrolled 600,000 more students if they had not absorbed $1.5 billion in cuts during those years.

“Recent improvements in the state’s financial condition have enabled us to serve more students and add back classes,” Harris said in a written statement. “But our colleges are still dealing with the consequences of recession-era cuts that forced us to ration education.”

California has long been a boom-and-bust state. The state relies heavily on taxes of capital gains and stock options, which surged in April. Revenues were up $6.7 billion since January, when Brown unveiled his initial budget, the Long Beach Press-Telegram reported.

But the bust always looms in California, as Brown noted Thursday.

“Another recession is on the way -- we just don’t know when. That’s why this budget locks billions into the rainy day fund and pays down debt,” he said in a written statement. “At the same time, this budget spends more than ever on schools and creates a new tax credit to help California’s working poor.”


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