State Funding to the University of California ASUCD, Executive Office
Report Compiled by: Katherine Chen, President’s Director of Legislation & Policy
January 2nd, 2012
Overview
Each year UC presents the state with a funding request. The governor presents a state budget in January that includes funding for UC, California State University and California Community Colleges.
The state budget typically undergoes revisions for several months before the Legislature approves it and the governor signs it. The budget is supposed to be finalized by the end of the fiscal year in June, but it is often delayed as lawmakers debate the level of allocations for various programs and agencies. State funding for UC fluctuates from year to year and is closely tied to the ups and downs of the state’s economy.
UC’s share of the state budget has declined dramatically over the last decades. In 1980-81, UC received 5.09 percent of the state’s general funds. In 2010-11, UC’s share dropped to 3.36 percent.
As state support has declined, the student share of their education costs has grown. Since 1990, the state’s contribution to educating each UC student has dropped more than 50 percent. In 1990, the state funded 78 percent of the total cost of education per student. Today, the state funds 48 percent. As state support has declined, the students’ share of their education costs, net of financial aid, has more than tripled, from 13 percent to 41 percent.
Statistics & Historical Data
State funding per student, historical data:
1990-1: $16,720
1995-6: $12,860
2000-1: $15,020
2005-6: $10,100
2010-11: $8,220
UC’s State-Funded Annual Operating Budget
2005-2006: $2.806 billion
2006-2007: $3.077 billion [Increase of 8.2%]
2007-2008: $3.27 billion [Increase of 6.2%]
2008-2009: $3.256 billion
2009-2010: $2.60 billion [20% reduction of $637.1 million]
2010-2011: $2.91 billion
2011-2012: $2.50 billion
Roughly 46 percent of the UC’s core operating budget comes from state general funds.
Financial Overview & Insight
During the 2011-2012 fiscal year budget cuts will include a $500 million reduction in support for the University of California. The 16.4 percent drop in state general fund support for UC would result in student tuition revenue surpassing state contribution to the university’s core operating budget.
Future Long-Range Plans, procured from Governor’s Budget Summary 2012-2012
Stable Funding Source - Thestate will increase its GeneralFund contribution to each institution’s prior year base by a minimum of fourpercent per year, from 2013‑2014 through 2015-2016, contingent upon the passage of the Governor’s taxinitiative.
Fiscal Incentives - Thestate currently budgets separately for, andadjusts annually, retirement program contributions and general obligation and lease revenue bond debt service for higher education capital improvementprojects. TheBudget proposes to shift these appropriations into each institution’s budget (except retirement program and general obligation bond debt service for the California CommunityColleges). Thiswill encourage the institutions to factor these costs into their overall fiscal outlook and decision‑makingprocess.
For 2012‑13, theBudget proposes total funding of $22.5billion, reflecting an increase of $367.5million above 2011‑2012, a 1.7‑percentincrease. Asa subset of total funding, theBudget proposes funding of $11.6billion in GeneralFund and Proposition98 related‑sources reflecting a decrease of $335.1million below 2011‑2012. Thisdecrease is due chiefly to the use of available federal Temporary Assistance for Needy Families funds in lieu of GeneralFund for the CalGrantPrograms.
Significant Adjustments to the UC’s Budgets
Eliminate Set‑Asides in UC’s Budget- TheBudget proposes to remove various set‑asides for specific programs and purposes, suchas the Drew Medical Program, AIDSresearch, theInstitutes for Science and Innovation, andthe Summer School for Mathematics andSciences. Thisprovides UCwith greater flexibility to manage its $750million 2011‑12 budgetreductions.
Operating Budget Needs- Anongoing increase of $90million GeneralFund for base operating costs, which can be used to address costs related to retirement programcontributions.
Fiscal Incentives- Itis the current practice that the state separately budgets, andannually adjusts, forgeneral obligation and lease revenue debt service for UCcapital improvementprojects. TheBudget proposes to shift these appropriations into UC’s budget, which will require the University to factor these costs into UC’s overall fiscal outlook and decision‑makingprocess.
Trigger Cuts & Reductions
Unallocated Reduction- Adecrease of $200million in 2012‑13 for an unallocatedreduction. Tothe extent that UCchooses to increase tuition to backfill this reduction, theGeneralFund costs of providing CalGrants to financially needy California students will increase and partially offset the GeneralFund savings of thisproposal.
Additional Overview & Insight
http://budget.universityofcalifornia.edu/?p=1583
http://www.ebudget.ca.gov/Enacted/StateAgencyBudgets/6013/6440/department.html
http://www.dof.ca.gov/budget/historical_ebudgets/
(2011-2012 Proposed Budget Cuts)
http://www.universityofcalifornia.edu/news/article/24764