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Regents to consider tuition increase for budget shortfall

With cost-cutting and revenue-generating measures in place to fill the bulk of a billion-dollar budget gap resulting from steep cuts in state funding, the University of California staff is preparing to recommend to the Board of Regents that roughly one-quarter of the shortfall be offset with tuition and fee increases, UC Vice President Patrick Lenz said July 1.

Only the Board of Regents can pass a budget or raise tuition. A tuition increase would be among several options presented to the Regents for consideration when they meet July 12–14 in San Francisco.

Lenz, the UC system’s vice president for budget and capital resources, said it had been determined that an annualized tuition increase of 9.6 percent beyond the 8 percent previously approved by the Regents for the 2011–12 school year would cover nearly $150 million of the $650 million funding reduction in the state budget approved by the state Legislature and signed by Gov. Jerry Brown last week.

Because of these cuts and more than $350 million in unfunded mandatory cost increases, largely consisting of unsupported students and rising contributions to the employee retirement plan and health benefits, UC is facing a budget shortfall of $1 billion.

Gov. Brown had proposed a funding reduction of $500 million in January, but the budget plan he signed on June 30 cut UC’s funding by $650 million for 2011–12, decreasing state support for the University from a high of $3.25 billion in 2007–08 to $2.37 billion. The total reduction could rise to $750 million if projected state revenues do not materialize.

“We reported to the Regents in May that if we were to receive additional cuts beyond $500 million, we would have to offset those cuts with a dollar-for-dollar tuition increase,” Lenz said. “Our campuses and the UC Office of the President already have cut to the bone – implementing administrative efficiencies, furloughing and laying off employees, consolidating and eliminating programs, increasing class sizes, delaying faculty hires, reducing services and delaying purchases, among other actions.”

Lenz added: “We will present to the Regents a variety of measures that we believe will preserve the quality of education, research and public service benefiting Californians in every part of the state and ensure access to students from families with low and moderate incomes through financial aid.”

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