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LOS ANGELES, CA - MAY 14: California Gov. Jerry Brown speaks during a news conference about the state budget on May 14, 2012 in Los Angeles, California.
It's not an easy time to be in public education in California.
Under a budget agreement reached between legislative leaders and Gov. Jerry Brown, the University of California and Cal State University systems would each lose $125 million in state funds for the 2013-14 year if the systems increase tuition this fall.
And yet, both systems have more than a $100 million hole in their 2012 budgets, primarily due to severe cuts in state funding.
Even more problematic for budget planners: The governor's budget presumes that an initiative to raise sales tax and the levy on higher earners will be approved by voters in November. If not, then both systems would each be hit with a $250 million cut.
"What this is designed to do is to be able to deal with the issue of affordability not in this coming year but in the following year," said H.D. Palmer, the deputy director for the California Department of Finance. "So we can address the issue of affordability that's on the minds of a lot of students and a lot of their parents."
On Tuesday, education officials responded with a wait-and-see approach to the plan.
The UC Regents are due to meet in July and discussed last month the possibility of a 6 percent tuition increase to help cover a $125.4 million gap in their budget. UC spokeswoman Dianne Klein said that right now there is no agenda item to discuss an increase in tuition at their next meeting, though the Regents will discuss the budget.
"It’s risks either way," Klein said about the plan. "We’re in a position now where there’s no clear good scenario."
Officials at the CSU system echoed that concern. While UC receives roughly 11 percent of its $22.5 billion annual budget from the state's general fund, more than 50 percent of CSU is state funded. That means the state's budget process has an even larger impact on the system's planning, officials said.
The CSU Board of Trustees approved a 9.1 percent tuition hike in November for this fall that would fill a $132 million budget hole by charging students an additional $500.
Based on this assumed revenue, CSU officials have made plans for courses and hired instructors for the fall, said Claudia Keith, a CSU spokeswoman. If the board decides to rescind the hike in order to receive the $125 million for the following year, it will not only have to go through the "administrative headache" of finding a way to refund students' money, but also figure out a way to fill that budget gap, she said.
The system's 23 campuses have worked to cut down costs by reducing course section offerings and student services. "We’ve [also] deferred maintenance as much as we possibly can," Keith said. "There comes a tipping point as to when you’re really going to start impacting quality. I think we’re at that point."
CSU officials have had conversations with the governor's office about using one-time funds from its extended education reserve to fill the budget hole should the trustees decide to rescind the fee increase, Keith said.
But even in the initiative passes in November, there will still be about $7 million that the system will have to find funds for.
Because of such uncertainties, education officials up and down the state have had to budget for next year with the worst-case scenario in mind.
Tuition fees at UC have increased by roughly 57 percent since the 2007-8 academic year, when it cost $7,734 to go to a UC school. Now it costs $12,192 to attend for the year. At CSU, tuition fees have increased from $2,520 five years ago to $5,472 this year. In the fall those fees are scheduled to go up by $500.
"The board has only raised tuition as a result of our budget being massively cut by the Legislature and the administration," Keith said. "We’ve had a $750 million cut in the last two years...The bigger issue is the disinvestment in higher education. What is the state going to do long-term for that? A tuition freeze sounds good, and certainly we want to help students, but in the long run that really doesn’t solve the [disinvestment] problem."
Because of these state-funding cuts, CSU officials plan to freeze the majority of its spring 2013 enrollment and will accept applications for fall 2013 on a wait-list basis, holding off on decisions such as early admission, until the outcome of the tax initiative is determined.
The CSU Board of Trustees will meet in July and Keith said they are likely to take up the budget issue at the September meeting. Keith said it is likely that whatever is decided would be contingent on the results of the November election.
On Tuesday, student leaders and advocates praised the tuition freeze agreement.
"We’ve gotten past the point where we can just trust the Regents to do the right thing," said Matt Haney, executive director of the University of California Student Assn. The group helped negotiate the terms of the deal with legislators.
"We need to go to the state and say we need more funding," Haney said. "Yes we understand there are funding challenges, but if we receive that funding we need to make sure that its contingent on holding tuition constant.
"Families and students cannot continue to pay more and more year after year. Even for just one year, to have it stop, to have the state of California say it's a priority to maintain the affordability and accessibility of our public education system, and put money on the line for it, we think that's the right thing to do."
Gregory Washington, president of the California State Student Assn., said the plan was a "step in the right direction" but he wished it were more "definitive" and not as dependent on the governor's November ballot initiative.
"One of the big concerns that we have, with just the nature of the tuition buyout is that it is so closely tied to the tax revenue and tax package that the governor [wants to pass] in November," Washington said.
Washington, who just graduated from Cal State Fullerton, said students have seen tuition rise at "alarming" rates over the last several years.
"From the time you step onto a campus and in the four years that it's going to take you to complete your degree, your tuition is going to most likely double," Washington said.
Many education officials across the state have thrown their support behind the governor's tax initiative because it is the linchpin in their budgets; without it education will be hit with nearly $6 billion in cuts, primarily at the K-12 and community college level.
But Jon Coupal, president of the Howard Jarvis Taxpayers Assn., said this is "the same political drill" of using "extortive" tactics to move voters to approve tax increases.
"It's K-12 and higher education that’s being threatened, not these other things — pension reform, budget reform, regulatory reform, that are being put on the table," Coupal said. "...How many high tech entrepreneurs and businesspeople have to leave the state until our policy leaders wake up [and realize] that they’re killing the goose that’s laying the golden egg?"
Coupal said Californians have rejected the last eight statewide tax increase proposals including a proposal for a $1 tax on a pack of cigarettes earlier this month. "If anyone is planning or builds a budget around these tax increases, then they're delusional," he said.
The governor has until Wednesday to sign the budget plan.