State Budget Passes, Increases UC Funds

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Gov. Arnold Schwarzenegger signed the California state budget late Friday afternoon, ending a 99-day stalemate in the state Legislature and increasing funding to the University of California after the system has been hit by multiple reductions in state funding over the last three years.

The new budget, which was passed by the Legislature Friday morning after a record-long impasse, provides about $3 billion to the university - an increase of $370.4 million from last year.

As part of the budget package, the state will provide the university with a one-time restoration of $305 million to help alleviate the repercussions of last fiscal year's $637.1 million cut in funding that resulted in student fee increases, furloughs and other cost-saving measures.

In addition to the restoration, the budget provides $51.3 million to support 5,121 students currently not funded by the state, $14.1 million to cover increased health care costs of retired annuitants and $353 million for infrastructure projects centered on student accessibility and seismic safety, according to a statement by Patrick Lenz, UC vice president for budget.

The rest of the roughly$3 billion in state funding will contribute to the UC's general budget and can be allocated at the discretion of the UC Board of Regents. According to Lenz, general funds will be divided up among campuses and put toward hiring new faculty, restoring course offerings and supporting student services.

"We thank the governor and the legislature for making higher education a priority, even as the state continues to face fiscal challenges," Lenz said in the statement. "This budget demonstrates their commitment to invest in higher education to ensure the long-term economic vitality of the state."

The funds will be distributed in monthly payments of $225 million starting at the end of November, according to Peter Taylor, chief financial officer for the UC. In addition to the monthly installments, $576 million will come to the UC in the third week of December, totaling approximately $1 billion by the end of 2010.

Judy Heiman, principal fiscal and policy analyst for the California Legislative Analyst's Office, said the funding is relatively unrestricted because state-imposed requirements to receive the funds, such as minimum enrollment numbers, have not only been met but exceeded by the university.

Despite the increased funding, Lenz said in the statement that the university continues to face "significant challenges" and that permanent state support for the UC is 10 percent lower than 2007-08 funding levels, while the number California residents enrolled in the UC has increased by 16,000 students in that time.

"It's still a tough situation," said UC spokesperson Steve Montiel, who added that the university still faces a budget gap of $237 million that the new budget does not address.

But Schwarzenegger maintained a positive outlook on the budget, which was passed after an all-night legislative session beginning 11 a.m. Thursday. The main budget bill, SB 870, was voted on several times before finally receiving a two-thirds majority vote at approximately 7 a.m. Friday morning and acquiring Schwarzenegger's signature hours later.

"It is often said that politics is the art of compromise, and let me tell you, this is exactly what this budget is," Schwarzenegger said in a press conference Friday. "Today I am proud to say that we, Democrats and Republicans, fought through all of the minefields and all of the obstacles that were in front of us and got the job done."


Contact Kate Lyons at [email protected]

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