State budget and UC

The Legislature and Governor are apparently getting close to a budget agreement, with the respective proposals now only about $4 billion apart. The centerpiece of the Democrat's proposal, approved by the budget conference committee, is a tax swap increasing income taxes but reducing sales taxes. While it's not clear what the net result of the swap would be, whether it will result in lower or higher revenue for the State, it does seem to go in the right direction by replacing a regressive tax with a progressive one (but revenue from income taxes tends to be more volatile than that from sales taxes). We will see. In the meanwhile, the Governor has put State employees back on 3-days-a-month furloughs until a budget agreement is reached (the fact that employee unions that play nice with the Governor were exempted shows that this was dictated more by politics than fiscal emergency).

As far as the University of California is concerned, the proposal approved in committee maintains the $305 million in restored funding for UC, supplemented by $355 million for capital construction, and $51.3 million  to support (past) enrollment growth.

It's clear that the news could have been much worse, and the fact that both the Governor and the Legislature have proposed no further cuts is certainly welcome. But it should also be clear that this is  a drop in the bucket, which does nothing to address years of decline. The $305 million are just about the amount that was being saved last year through furloughs, so we should — God willing — see an end to furlough program. But one of the reason the furlough program was so unpopular was that it hurt a lot of people for a relatively small amount of savings (about 1% of the University's $20 billion budget).

Needless to say, UCOP's was quick to release a statement by Patrick Lenz (UC's vice president for budget) praising the Legislature for going along with the Governor's proposal. The statement says nothing about general fund money lost in the last twenty years, and makes it look like everything would just fine at UC if the State restores those $305 million. Except, of course, that UC reserves the right to further increase fees:

The proposed budget recommendations... reduce the potential for significant additional increases in student fee.

I am not sure students and their families will find the nuanced statement very reassuring.