California State universities will increase tuition if tax measure fails

Reuters News
Posted: Sep 19, 2012 5:07 PM
California State universities will increase tuition if tax measure fails

By Mary Slosson

SACRAMENTO (Reuters) - The California State University network will raise tuition by 5 percent at its 23 campuses if a November tax measure fails, triggering a $250 million cut to the nation's largest 4-year public university system, its board decided on Wednesday.

The contingency decision by the Board of Trustees came as Democratic Governor Jerry Brown campaigns for a November ballot initiative to raise the state's sales tax and personal income tax rates on high-income residents.

Approval of that tax measure would prevent further spending cuts, especially in education, in the most populous U.S. state, whose 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 serves roughly 427,000 students.

"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."

The contingency plan, whose approval followed months of discussion, 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 other cost-cutting measures, officials said.

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

The smaller University of California system's regents have also warned that tuition at its schools, which include UCLA and UC Berkeley, with a total of more than 220,000 students, could rise by as much as $2,400 per year if the tax measure fails.

If Brown's tax increase fails, the 10-campus UC system would lose $375 million in state revenue, school officials said, adding that the system has already lost $900 million, or 27 percent, of its state appropriation over the past four years.

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 before the vote.

Although Brown presides over a Democratic majority in both legislative houses, tax increases in California require a two-thirds vote in the legislature or a voter initiative, and Brown failed to persuade any Republican legislators to support his tax plan.

(Editing by Cynthia Johnston and Mohammad Zargham)