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Proposed Constitutional Amendment Would Guarantee Funds for UC

January 6, 2009
Governor Schwarzenegger proposes funding shift for higher education, starting in 2011-12 fiscal year and fully realized in 2014-15.

MERCED, CA— Vowing to protect higher education funding, Gov. Arnold Schwarzenegger revealed a bold proposal Wednesday (Jan. 6) to amend the state constitution to shift money from prisons to higher education.

The amendment he introduced in his State of the State address would limit the state correctional budget to no more than 7 percent of state general fund revenue and guarantee that the University of California and California State University together would receive no less than 10 percent. The funding shift would begin in the 2011-12 fiscal year and be fully realized in 2014-15.

“Spending 45 percent more on prisons than universities is no way to proceed into the future,” Schwarzenegger said. “What does it say about a state that focuses more on prison uniforms than caps and gowns? It simply is not healthy. I will submit to you a constitutional amendment so that never again do we spend a greater percentage of our money on prisons than on higher education.”

California needs to find ways to run its prisons more cost-effectively, he said, by allowing private prisons to compete with public prisons. California spends about $50,000 a year per in'while other states spend $32,000, he said.

“That's billions of dollars that could go back to higher education where it belongs and where it will serve our future,” he said. His proposal prohibits cost-savings being achieved through early release of prisoners.

Schwarzenegger's proposal addresses a long-standing warning from higher education leaders about the dire consequences of the state growing its prison budget while funding for public universities declined proportionately.

“This is a bold and visionary plan that represents a fundamental restoration of the values and priorities that have made California great,” said UC President Mark Yudof. “I am extremely pleased that the governor understands how vital it is to return the University of California and the California State University system to solid financial footing.”

If such a funding formula were in place for fiscal year 2009-10, based on the state budget approved last summer, UC would have received up to an additional $1.7 billion in state funds — enough to significantly address the university's looming budget gap.

Under the same formula, prisons would have received roughly $2.3 billion less. The proposal would allow the state to outsource prison administration to private companies to save money but would not allow the cost savings to come from early release of prisoners.

CPEC Fiscal Profiles, 2008Sources: CPEC Fiscal Profiles, 2008; Dept. of Finance budget documents

The slice of the state general fund that goes to the two public higher education systems has shrunk dramatically over the last 40 years while the prison budget has mushroomed.

In the 1967-68 fiscal year, UC and CSU received 13.4 percent of the state's general fund. In 2009-10 the proportion had dropped to 5.9 percent. At the same time, the prison's share of the budget has more than doubled from 3.9 percent to 9.7 percent.

The governor's plan would need a two-thirds vote from the Legislature to make it onto the ballot this fall. A simple majority vote from the public is needed for the amendment to pass.

“I look forward to exploring the details of the governor's idea with my colleagues and to working with the governor and the Legislature to advance the cause of adequate higher education funding,” said UC Board of Regents Chairman Russell Gould. “The road to a stronger economy and a brighter future for California runs straight through its great public universities.”

In the long term, if voters approved this proposal, Yudof said, it would provide California's public universities with much-needed financial stability and the ability to maintain affordability, access and excellence.

“In the short term, however, there are still critical budget shortfalls that will require the attention of the governor and the Legislature,” Yudof said.

Friday the governor will release his proposed 2010-2011 budget. UC has requested an additional $913 million to restore funds the state cut over the last two fiscal years, to fund employer contributions to the UC Retirement Plan and to support the roughly 14,000 UC students for whom the state has provided no funding.