Regents Adopt 2006-07 Budget Proposal
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For faculty and staff, the budget proposals would mean an average 4 percent increase in employee compensation in 2006-07, subject to collective bargaining requirements. Salaries of UC faculty and staff now significantly lag those at the institutions UC competes with, putting the University at a disadvantage in recruiting and retaining the most talented employees. University Quality at Risk To help preserve the quality of the instructional program and help UC rebuild after years of state budget cuts, the Regents approved fee increases of 8 percent ($492) for resident undergraduates, 10 percent ($690) for resident graduate academic students, and 5 percent (dollar amounts varying by school) for most professional school students in 2006-07. UC will devote an equivalent of 33 percent of new mandatory systemwide fee revenue from undergraduates and professional students to financial aid, and 45 percent of new graduate academic fee revenue. The vote was 17-2. The board adopted fee levels with the understanding that "student fees as proposed will be reduced or rescinded prior to implementation if the governor and Legislature provide the funding to reduce or eliminate the fee increases and the remaining portions of the compact remain in place." The budget and fee proposals are intended to shore up support for the UC system after the substantial budget cuts of the early 2000s, when state funding to the University of California fell 15 percent. While UC is working to enhance private support and achieve internal efficiencies, the university still faces the challenges of a long-term decline in state support, a projected leveling off of federal funding for research, and a $500 million shortfall between the university's current budget and the resources needed to address the regents' priorities for sustaining UC's quality. "We still have serious ongoing funding gaps -- relating to the student-faculty ratio; relating to salaries, which are now significantly behind the market for both faculty and staff; and relating to the libraries, technology, and other infrastructure that support the academic enterprise," said UC President Robert C. Dynes. "Make no mistake: This University's quality, and the magnitude of this University's contribution to California, are still at risk today." Under the budget proposal, UC's state-funded budget for the fiscal year beginning July 1, 2006, would total $2.976 billion, an increase of $131 million or 4.6 percent above the 2005-06 level. Budget Highlights Below are highlights of the budget adopted by the UC Board of Regents. These items would be funded both from state resources and other revenue to the university, including student fee revenue: • Enrollment growth: Funding for growth of 5,000 full-time-equivalent students in 2006-07, an increase of approximately 2.5 percent, to fulfill UC's undergraduate commitments in the Master Plan for Higher Education and to continue increasing graduate enrollments. • Student-faculty ratio: A $10 million augmentation to bolster the student instructional program and improve the student-faculty ratio, allowing the university to offer smaller classes in some subjects and a wider range of courses to help students complete requirements and graduate more quickly. • Graduate education: The budget proposes that UC use $10 million in internal savings achieved from the university's Strategic Sourcing Initiative to improve graduate student financial support. The Strategic Sourcing Initiative is a process intended to leverage the university's buying power in the marketplace, increasing the efficiency of purchasing and lowering the cost of goods and services the university buys. • Financial aid: UC grants, in conjunction with Cal Grants, will provide sufficient funding to fully cover systemwide fee increases for grant-eligible undergraduates -- generally those with parental income below about $60,000 per year. The 2006-07 budget extends this program, offering a UC grant to cover half of the $492 fee increase for other financially needy middle-income undergraduates with parental income up to $100,000 who are not already receiving any other fee grant. • Academic preparation: UC is proposing in the budget that current state funding for student academic preparation programs, sustained for the 2005-06 year on a one-time basis, be made permanent in 2006-07. These programs help improve the academic performance of educationally disadvantaged students in K-12 schools across the state. Currently, the $29 million in funding for the programs consists of $17 million from the state and $12 million redirected from other university resources. • Capital program: In addition to approving a 2005-06 operating budget, the Regents adopted a budget for capital improvements. It requests $340 million in state funding from general obligation bonds and/or lease-revenue bonds to expand and upgrade academic facilities to support enrollment growth and to maintain progress on seismic and other life-safety improvements while also addressing essential infrastructure and building renewal needs. Student Fees Proposed The Regents adopted the below student fee increases for the 2006-07 year, with the caveat noted above that the fee increases could be reduced or rescinded prior to implementation "if the governor and Legislature provide the funding to reduce or eliminate the fee increases and the remaining portions of the compact remain in place." • Resident undergraduates: An 8 percent ($492) increase in mandatory systemwide fees, consistent with the compact with the governor, bringing these fees to $6,633 for the year. With additional miscellaneous fees charged by individual campuses, total average fees for 2006-07 are estimated to be $7,294. This figure is still more than $900 below the $8,212 projected average at the other public universities (Illinois, Michigan, SUNY Buffalo and Virginia) around the nation that UC uses for fee comparison purposes. • Resident graduate academic students: A 10 percent ($690) increase in mandatory systemwide fees, consistent with the compact with the governor, bringing these fees to $7,587 for the year. Average total fees, including campus miscellaneous fees, would be an estimated $9,398. This figure is more than $1,700 below the $11,124 projected average charged at the public comparison universities mentioned above. • Professional students: Mandatory systemwide fees for professional students would be increased 5 percent ($358), bringing these fees for professional students to $7,500. In addition, professional school fees also would increase by 5 percent for most programs; however, professional fees for students in the business and law programs at UC Berkeley and UCLA and the law program at UC Davis would increase by 10 percent to help these schools recover from previous state budget cuts, build and enhance quality, and expand financial aid. (In addition, the regents previously approved a two-year, temporary Educational Fee increase of $1,050 for professional students to cover lost revenue associated with a lawsuit regarding professional fees. Of this amount, $700 was implemented in 2005-06 and the additional $350 will be levied in 2006-07. As a result, total fees in 2006-07 for professional students will range from $12,092 for nursing at UCLA to $28,871 for business at UCLA.) • Nonresident tuition: In addition to mandatory systemwide fees, out-of-state students must pay nonresident tuition. This tuition would increase for undergraduates by 5 percent in 2005-06, from $17,304 to $18,168. Recognizing the importance of keeping the university competitive for the best graduate students, nonresident tuition would remain at $14,694 for graduate academic students and $12,245 for professional students. Taken together with mandatory systemwide fees and campus fees, total nonresident student charges in 2006-07 would be an estimated $26,020 for undergraduates and $24,383 for graduate students. The regents also endorsed a proposal to waive nonresident tuition for up to three years for graduate doctoral students who have reached the "advanced to candidacy" stage -- meaning those who have finished their coursework but still must complete their dissertations -- to encourage completion of their doctoral degrees within that three-year time period. • Financial Aid To preserve affordability for needy students, UC will set aside an amount equivalent to 33 percent of new revenue generated from the undergraduate increases in mandatory systemwide fees, 45 percent of this new fee revenue from graduate academic students, and 33 percent of new revenue from professional school fee increases. The proposal, in conjunction with the state's Cal Grant program, is expected to provide sufficient additional funding to fully cover the systemwide fee increases for UC's grant-eligible undergraduates (generally those with parental income below about $60,000 per year). In addition, as noted above, a portion of these funds will be allocated to assist undergraduates from middle-income families. With this one-year program, needy families with income levels below $100,000 per year who are not otherwise eligible for fee-paying grant assistance will be eligible for a $250 grant to cover roughly half of the undergraduate fee increase in 2006-07. UC leads the nation among top-ranked national universities in the proportion of undergraduate students enrolled from low-income backgrounds. UC students received more than $1.1 billion in grants and scholarships in 2005-06. Source: UC Office of the President Links: University of California