Tax

California State universities may hike tuition if tax measure fails

Reuters News
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Posted: Sep 19, 2012 2:08 PM
California State universities may hike tuition if tax measure fails

By Mary Slosson

SACRAMENTO (Reuters) - The California State University Board of Trustees was due to vote on Wednesday on a contingency plan to raise tuition by 5 percent at its 23 campuses if a November tax measure fails, triggering a $250 million cut to the system.

The vote comes as Jerry Brown, the Democratic governor of the nation's most populous state, is campaigning for a November ballot initiative to raise the state's sales tax and personal income tax rates on high-income residents.

Approval of the tax measure would prevent further spending cuts, especially in education, in a state where the budget has been slashed repeatedly in recent years.

If the measure fails, so-called trigger cuts will go into effect, including a permanent $250 million hit to the California State University (CSU) system, which with roughly 427,000 students is the nation's largest 4-year state university system.

"This is part of a larger problem for our system," CSU chancellor's office spokesman Mike Uhlenkamp said. "If this cut happens, since 2008 we will have faced $1.2 billion in cuts. It would reduce our level of state funding to approximately the same level as the mid-1990s, but with 95,000 additional students."

Uhlenkamp said it was highly likely the full board would approve the tuition hike contingency plan, which was already approved by a finance committee on Tuesday after months of discussion.

That plan would raise undergraduate tuition at California State schools by 5 percent, or $150 a semester, according to school officials, bringing undergraduate tuition for one semester to $3,135.

The tuition increase would bring in roughly $58 million for the 2012-2013 academic year, not enough to avoid some cuts, officials said.

If the governor's ballot initiative passes, however, the school system would roll back tuition by 9.1 percent, including a tuition hike implemented in the current fall 2012 semester.

The smaller University of California system's regents have also warned that tuition at its schools, such as UCLA, UC-Berkeley and UC-Davis, with a total of more than 220,000 students, could rise by up to 20 percent, or more than $2,400, if the tax measure fails, the Los Angeles Times has reported.

A brief prepared for the California State University system's finance committee noted that several "belt-tightening" measures have already been implemented, including leaving vacant tenure-track faculty positions unfilled, reducing library acquisitions, and a general salary freeze for staff and faculty.

"It is clear that we cannot simply cut our way out of another $250 million hit to our budget," CSU Chancellor Charles Reed said in a statement. "We need to take a balanced approach in terms of cost reductions and revenue enhancements. That is reflected in the contingency plans going before the board."

(Reporting by Mary Slosson; Editing by Cynthia Johnston and Philip Barbara)