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UC Merced Receives Full Funding in Final 2005-06 State Budget

July 11, 2005

The 2005-06 state budget signed by Gov. Arnold Schwarzenegger
today (July

11) fulfills his “compact” with the University of California,
ending four years of budget cuts with increases for student
enrollment growth, faculty and staff compensation, the opening of
UC Merced, and an initiative to expand the training of K-12 science
and math teachers, among other things.

The budget as signed by the governor also preserves funding on a
one-time basis for the university’s student academic preparation
programs, which work to improve academic achievement and college
preparation for students in disadvantaged K-12 schools.

“We are grateful to both the governor and the Legislature for
adopting a budget that halts the cuts of the last few years and
invests in higher education’s contributions to California,” said UC
President Robert C. Dynes. “This is a budget that allows us to meet
our commitments to the incoming class of students, reward our
faculty and staff, continue our work in the K-12 schools, and
continue expanding our contributions to California’s economy,
health, and quality of life.”

Over the last four years, UC has lost 15 percent of its state
operating funds while seeing a 19 percent increase in student
enrollments. The compact, an agreement reached last year by the
governor and UC, offers the university new budget stability
starting in 2005-06 by establishing funding and performance
expectations over a multi-year period.

Consistent with the compact, the final state budget for 2005-06
provides a $134 million increase in state general funds for UC
operations, or 5 percent, over the 2004-05 fiscal year. UC’s
state-funded operating budget for the fiscal year that began July 1
will total $2.843 billion.

The budget includes the following for the UC system:

- Enrollments: Funding for enrollment growth of 5,000
full-time-equivalent students in 2005-06, a 2.5 percent increase,
consistent with the compact.

-
UC Merced:Continuation of $10 million in ongoing
operating funds plus

$14 million in one-time money for the new campus opening in
fall 2005, along with enrollment funding (part of the above
5,000-student allocation) to enroll its entering class in 2005-06.

- Science and math initiative: A $750,000 allocation for UC to
begin the “California Teach: One Thousand Teachers, One Million
Minds” program. In this program, UC will work with corporate
partners and the CSU system to dramatically expand the training of
high-quality science and mathematics teachers for California’s
schools in order to bolster the state’s long-term economic and
technological competitiveness.

- Academic preparation: Continuation of $17.3 million in state
funding for UC’s academic preparation programs, which work to help
improve academic achievement and college preparation among students
in disadvantaged public schools in California. The governor’s
budget message indicated that this funding will be sustained “on a
one-time basis, with the understanding that the university will
work with the administration to fully evaluate the
cost-effectiveness of each program and eliminate those that cannot
demonstrate an adequate return on investment.”

- Faculty and staff compensation: A 3 percent funding increase
for salary increases, including merit-based increases, and
additional funds to help contribute to employee health benefit
costs and to address market-based and equity issues. (Specific
compensation levels are subject to local programs and collective
bargaining agreements where applicable.)

- Labor institute: The governor vetoed $3.8 million from the
budget passed by the Legislature for the Institute for Labor and
Employment. The governor’s veto message said the funding “was
provided on a one-time basis in the 2004 Budget Act, and these
reductions are needed to help bring ongoing expenditures in line
with existing resources.”

- Student fees and financial aid: The Board of Regents last
November approved undergraduate and graduate student fees for
2005-06, consistent with the levels outlined in the compact and
consistent with the final state budget outcome. The action included
increases of 8 percent ($457) for resident undergraduates and 10
percent ($628) for resident graduate academic students. Details
about 2005-06 student fees are available at:



www.universityofcalifornia.edu/news/budget/fee_fact_sheet05.pdf
.
UC financial aid, in conjunction with Cal Grants, will be
sufficient to cover the fee increase and some other increases in
costs of attendance for undergraduates eligible for UC grant aid.
(The regents are scheduled to consider additional proposed fee
increases for professional school students at the board’s July 20-21meeting.)

- Capital improvements: Funding of $352.5 million from a
voter-approved general obligation bond measure to expand and
upgrade academic facilities to support enrollment growth and to
maintain progress on seismic and other life-safety improvements
while also addressing essential infrastructure and building renewal needs.

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