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State budget brings UC relief and hope for multi-year funding

California Gov. Jerry Brown enacted a spending plan on June 27 that increases the University of California’s state appropriation by 5 percent this fiscal year and sets the stage for modest growth in financial support over the subsequent three years.

The state will increase UC’s base funding by $142 million for the fiscal year that began July 1, a boost that will allow undergraduate tuition to remain at current levels through 2013–14, said Patrick Lenz, UC’s vice president for budget and capital resources.

Lawmakers also approved a multiyear funding plan that grows UC’s base budget by 5 percent in the 2014–15 fiscal year and by 4 percent in each of the two years after that.

Lenz said that he and other UC leaders were grateful to state lawmakers for reinvesting in the university. Since 2007–08, the university’s budget has been slashed by nearly a third.

“This is an extremely favorable outcome for the University of California, its students, faculty and staff after years of significant reductions in state funding,” Lenz said. “This multi-year funding plan will provide UC with the fiscal stability and predictability that we have long sought.”

With the California economy finally rebounding from the deep recession that began five years ago, lawmakers also approved a “middle-class scholarship” program, introduced by Assembly Speaker John Pérez, D-Los Angeles, that will provide tuition discounts to UC and Cal State University students whose families earn $80,000 to $150,000 a year. The program would be phased in beginning in 2014.

The University of California, under its Blue and Gold Opportunity Plan, covers tuition and fees for students from families with incomes of $80,000 or less.

As tuition costs have risen to help UC cope with declining state support, university leaders increasingly have looked to private fundraising and other efforts to extend financial help to those in the middle income brackets.

“Like Assembly Speaker Pérez, we have been deeply concerned about ensuring affordability for middle-class students who don’t qualify for financial aid,” Lenz said. “We welcome this effort to provide tuition relief for California’s middle-class students.”

Under the budget approved by lawmakers and signed by the governor, UC receives $125 million promised to it as part of an agreement to freeze tuition in the 2012–13 academic year. That amount was added to UC’s base budget when the state calculated its 5 percent increase for 2013–14, which brings UC’s general fund appropriation to $2.677 billion.

UC also will be allowed to enact a debt restructuring program, a move that is estimated to bring in roughly $80 million in 2013–14 through lower borrowing costs. Those funds are earmarked to pay the state’s employer contribution to the UC Retirement Program.

The $142 million budget increase will fund some of UC’s most critical needs, including $15 million for the UC Riverside School of Medicine, California’s first new public medical school in four decades. The school will serve one of the state’s most medically underserved areas.

The budget also allocates $3.6 million to cover the debt service on funding that will allow UC Merced to construct a much-needed classroom and academic office building.

And the university also plans to allocate $10 million toward the development of high-quality online courses and infrastructure.

Under a plan put forth by UC’s faculty and administrators, undergraduates would have dozens of rigorous new online courses to choose from over the next few years, giving them greater flexibility in how they progress through their studies. High demand courses are likely to be given priority for online development.

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