Governor's 'May revision' restores some funding to UC, adds Cal Grant money to cover fee increases

Gov. Arnold Schwarzenegger issued the May Revision to his original state budget proposal for 2004-05 today (May 13), protecting the University of California from additional state budget cuts and restoring $20 million in previously cut funding to the university.

Acting Chancellor Chemers issued a brief statement on May 11 informing the campus community about the new higher-education "compact" agreed to by Governor Schwarzenegger, UC President Dynes, and CSU Chancellor Reed.

More information is also available on the campus's Budget Update web site.

The May Revision also includes funding for the California Student Aid Commission to provide Cal Grants that cover the proposed 14 percent undergraduate student fee increase at UC. The governor's original state budget proposal did not increase Cal Grants to cover fee increases.

Under the governor's original budget, issued in January, UC's state-funded operating budget would fall from $2.9 billion to $2.67 billion, or 8 percent. The May Revision makes the following technical adjustments to the original January proposal:

. Restores $8 million based on a recalculation of the number of enrolled students.

. Restores $8.2 million based on an assumption that the governor's proposal for an "excess-unit fee" will be phased in over time, producing less immediate savings. The governor's January proposal was that undergraduates taking more than 110 percent of the credit hours required for graduation be charged at a higher fee rate.

. Restores $4 million in UC internal funds (nonresident tuition revenue) used for K-12 outreach programs. This money was counted as state funds in the January budget and actually is part of the $12 million in internal funds that UC is putting up to sustain outreach in 2004-05. Negotiations over state funding for outreach are expected to be part of budget discussions between the Legislature and governor in the coming weeks.

The governor's decision not to make additional cuts at UC beyond those proposed in January follows a "compact" announced Tuesday (5/11) by Gov. Schwarzenegger, UC President Robert C. Dynes, and California State University Chancellor Charles B. Reed. The compact will provide, over the years 2005-06 to 2010-11, budget stability and moderate growth for UC and CSU. Details on the compact are at

Because the state of California is still grappling with a major budget gap for 2004-05, however, most of the governor's January proposals for budget cuts at UC remain in place. They include cuts to enrollments, administration, research, and other programs. The January cuts are described in full at

In addition, the governor's budget continues to provide no state funding for cost-of-living increases for UC faculty and staff in 2004-05, though the new compact does offer funding for increases beginning in the 2005-06 year.

The May Revision also continues to propose student fee increases for 2004-05, though they have been modified from the governor's January proposal to reflect the compact announced Tuesday. The governor's current proposals on student fees include:

. Graduate fees: An increase of 20 percent ($1,050) in 2004-05. This is half the 40 percent increase proposed in the January budget.

. Undergraduate fees: An increase of 14 percent ($700) in 2004-05, up from 10 percent in the January budget to allow the 40 percent graduate fee increase to be reduced. (Under the compact, undergraduate fees would rise an average 10 percent over the next three years, meaning that fee increases in both 2005-06 and 2006-07 would be 8 percent.)

. Nonresident tuition: An increase of 20 percent ($2,746 for undergraduates and $2,449 for academic graduate students), unchanged from the governor's January budget proposal. Out-of-state students pay regular fees in addition to nonresident tuition.

The UC Board of Regents is expected to vote on 2004-05 fee levels and a 2004-05 budget plan at its May 19-20 meeting.

Professional school fees were not specifically set in the January budget, the compact, or the May Revision. However, the governor's January proposal, which remains in place, is to reduce state support for most UC professional schools (excluding nursing) by an average of 25 percent and to replace the lost revenue through student fees. The UC administration has been consulting with campuses and professional schools about this issue and will have more information about proposed 2004-05 professional fee levels in the coming days.

The May Revision is available at