With Budget Talks Off, UC Faces Deeper Cuts

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Gov. Jerry Brown has halted budget negotiations with Republican legislators, jeopardizing his proposed tax extensions, which could potentially leave the University of California facing a $1 billion cut in state funding for the 2011-12 fiscal year.

Brown announced in a statement Tuesday that he had stopped negotiations on Monday after refusing to comply with a list of more than 50 demands made by Republican legislators - including public employee pension overhaul and reducing the state's environmental regulations - which he said in the statement would worsen California's budget crisis, not fix it.

"The budget plan that I put forth is balanced between deep cuts and extensions of currently existing taxes and I believe it is in the best interest of California," Brown said in the statement. "Under our constitution, however, two Republicans from the Assembly and two from the Senate must agree before this matter can be put to the people. Each and every Republican legislator I've spoken to believes that voters should not have this right to vote unless I agree to an ever-changing list of collateral demands."

Senate Republican leader Bob Dutton said in a March 26 statement before negotiations halted that the Republicans' ideas to solve the budget crisis went unheeded across the aisle.

"The Democrats' response to the Senate Republicans' budget solutions proves that they were never serious about a true bipartisan budget, but instead are only interested in Republicans giving in to their demands for more taxes," he said in a March 26 statement. "Democrats ignored all Republican input during the public budget committee process ... The fact that Republicans would seek some small, but important changes, in addition to necessary reforms that will fix California's long term budget problem, should come as no surprise to anyone who has experience negotiating a budget agreement."

The university is already guaranteed a $500 million cut in state funding, signed into law by Brown last Thursday. The absence of the tax extensions - which would generate for the state about $14 billion in revenue by continuing for five years increases in income taxes, sales taxes and vehicle license fees enacted in February 2009 - could leave the university facing an additional $500 million in state funding reductions for the upcoming fiscal year.

The UC has not yet responded officially to the financial implications of the halt in negotiations, though in an interview Monday UC Vice President for Budget Patrick Lenz said the university has not yet devised an alternative to cope with the additional funding cuts that could accompany the lack of tax extensions.

Lenz added that additional cuts from the state could force the university to contemplate mid-year fee increases or additional staff layoffs.

Additional cuts could also force the university to reassess its long-term financial outlook, he said. The UC faces a $2.4 billion structural deficit over the next five years and can only fill $900 million of it without relying on the state, according to Lenz.

"The balance of that is where rubber meets the road," he said. "If in fact we're faced with an additional cut, that $1.5 billion is going to grow ... I would not envy having to go back to the drawing board."

Before negotiations ceased, UC President Mark Yudof and the UC Board of Regents had not yet taken a position on the extensions - which they acknowledged would bring crucial money into the university - saying that they would need to see the final language of a ballot measure before endorsing it.


Jordan Bach-Lombardo is the lead higher education reporter.

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