California’s Revised Budget Favors Higher Education

SACRAMENTO, Calif. — While students and administrators of California’s higher education system can breathe a sigh of relief with the revised state budget for the time being, the economy will continue into an era of unpredictability, according to a statement by Governor Jerry Brown.
The new budget has gained positive response from the higher education community. The college tuition freeze and $500 million in funding to California State Universities (CSU) and University of California (UC) campuses will be maintained and improvements for higher education include the elimination of the unit cap and multi-year funding increase. Community colleges will also no longer be expected to take increased responsibility for adult education. However, uncertain times will still call for discretion in the California budget.
“We have climbed out of a hole with the Proposition 30 tax,” Brown said. “That’s good, but this is not the time to break out the champagne.”
Proposition 30, which passed in November with just 53 percent approval, went into effect Jan.1 of this year. The four-year quarter-of-a-cent sales tax is projected to provide California schools with $6 billion each year and relieve the state of “trigger cuts” to education.
The proposition was under heavy scrutiny during the campaign, but the positive outcomes of the measure have now been made clear, Brown said.
“During the campaign the critics said two things: ‘Proposition 30 won’t pass and if it does, the money won’t go to schools,’” Brown said. “Well, they were wrong on both accounts.”
Brown did not downplay the major successes brought forth by Proposition 30, but he did warn that certain risks were involved with the new budget. At both the state and federal level, Brown said, there has been a habit of over-commitment.
“We’re trying to now have honest budgeting and careful budgeting,” he said.
The initial state budget, issued in January, did not anticipate recent economic impacts such as the sequester and the payroll tax restoration, Brown said. The pressure of Washington and the global economy has also played its part in budget projections. But as with years past, there are risks, Brown said.
“We’re sailing into some rather uncertain times as we always have,” he said.
The unit cap was eliminated from the January budget over concern that the proposal was ineffective and unfair to students. If the proposal were approved, students would only be allowed to take about a year’s worth of additional units or 150 percent of units required to complete most degrees.
“We want to get more people through than we currently do and we want kids not to take seven years but four years,” Brown said. “If they get through in four years instead of seven years, there’s more space, we can add more students, the kids don’t borrow as much money and they get into the workforce sooner.”
The loss was one among other gains, the governor said.
“Like everything else we take it in steps,” he said. “Two steps forward, one step backward.”
The multi-year funding plan will increase per student funding by $1,503 for community college students, $1,953 for CSU students and $2,491 for UC students by 2016 to 2017. The budget will increase the general fund contribution to each institution’s prior year funding base up to 20 percent over the four-year period. This represents approximately 10 percent in total operating funds, including tuition and fee revenues.
“It prioritizes higher education by providing new funds to begin reinvesting in the public universities, with the expectation that the universities will improve the quality, performance and cost effectiveness of the educational systems,” the budget revision said. “The plan is rooted in the belief that higher education should be affordable and student success can be improved.”
With Brown’s warning that the economy is still indeterminate, Ana Matosantos, director of the state’s department of finance, said the four-year budget increases are based upon past markers.
“We look at what has happened in the past, the recoveries generally following a recession, and what we think is going to happen,” Matosantos said. “We look at it twice a year and we take our best shot at what we think is going on in the economy and what is going on with revenue; we do the same thing with expenditures.”
Budget revisions have gained favorable responses from representatives of the UC and CSU systems as well as several higher education organizations in California.
“The funding proposed for public higher education in the governor’s May revise is a critical investment in the future of California,” said CSU Chancellor Timothy P. White in a statement. “We look forward to working with the governor and legislature to invest these educational resources while ensuring the accountability of our universities and the success of our students in a way that upholds the mission of the California State University.”
The California legislature will have until June 15 to pass or make revisions to Brown’s proposed budget.