UC financial future depends on passage of Proposition 30
Gov. Brown visited UCLA Tuesday to speak about Proposition 30 and its possible effects on higher education.
By Kristen Taketa
Oct. 18, 2012 12:59 a.m.
The original version of this article contained an error and has been changed. See the bottom of the article for additional information.
The University of California’s financial future hinges upon the passage of Proposition 30 ““ also known as Gov. Jerry Brown’s tax measure or the Schools and Safety Protection Act ““ in the upcoming state elections.
If approved by voters, the measure would raise an additional $6 billion in tax revenue annually for five years to help balance the state budget, which was last reported to have a $15.7 billion deficit.
But as recent surveys reveal a decline in support for the proposition, the UC is considering drastic measures ““ in particular, a roughly 20 percent tuition increase ““ if the tax measure does not make the cut come November. Still, in that event, the University lacks a definite plan of action.
There will likely be more staff layoffs, program cutbacks and hiring freezes, said Dianne Klein, UC spokeswoman. Essentially, the negative effects of budget cuts ““ roughly $875 million ““ that have already occurred over the past four years will continue, but at a more intense level, Klein said.
UC officials are in the process of developing a budget plan for each potential scenario ““ one if the tax measure passes and one if it fails, Klein said. A budget plan will likely not be finalized until the UC regents’ Nov. 13 meeting after the elections.
Under the measure, the state would raise revenue by temporarily increasing the tax on individuals with an income of more than $250,000 for seven years and the sales tax by a quarter cent for four years. About one percent of California taxpayers would have their personal income tax rate raised under the measure.
With the measure’s passage, the additional tax revenue would go toward K-12 education and community colleges, freeing up funds for other state programs, such as the UC.
If the proposition were to pass, Klein said tuition would remain at its current level for the rest of the 2012-2013 year, though the university would be unable to guarantee that there will be no tuition increases in the future.
“Clearly, that would be good news for the initiative to pass,” Klein said.
Support for Proposition 30, however, recently dropped in the polls. Recent surveys have shown that approval for the measure dropped from around 60 percent earlier this year to less than 50 percent this month.
Since the state budget for 2012-2013 assumes the measure will be approved, the proposition’s failure in November would result in $6 billion in automatic spending reductions ““ or “trigger” cuts.
Education would primarily take the hit ““ $5.4 billion would be cut from K-12 schools and community colleges, and the UC and the California State University system would each face a $250 million trigger cut. The UC would also miss out on $125 million in additional funds promised by the state in exchange for not raising tuition for 2012-2013, leaving the University with a budget gap of $375 million for this year.
“If (Proposition 30) doesn’t pass, basically all bets are off,” Klein said. “We would have to take extraordinary measures to bridge that gap.”
A 20.3 percent increase in tuition would likely occur to cover the gap, UC officials said.
The possibility of drastic cuts to the UC in the near future has some UCLA students concerned.
Laura Fracchia, a second-year neuroscience student, said she was worried that the worth of a university degree might fall for both the UC and the California State University systems.
“(The measure’s failure) would be terrible,” Fracchia said. “It would just decrease the value of our school and the quality (of the UC).”
Whether or not the proposition passes, the UC will need to continue to look for alternative sources of funding, particularly private support, Klein added.
“This is the new normal where we cannot depend on a single source of revenue, so we look under every rock,” she said.
After a six-week campaigning hiatus, Brown came to speak in Bruin Plaza Tuesday and encouraged students to vote for the measure.
Unable to garner enough support for raised tax rates in the state legislature, Brown is working for support from the people in this petition-initiated proposition.
“We’ve cut schools (for) too long,” Brown said. “Now it’s not time for a cut but for an investment.”
A couple hundred students filled less than half of Bruin Plaza, while many stopped by to watch but said they were unsure why the governor was speaking. Many UCLA students said they were unfamiliar with Proposition 30.
Critics of Proposition 30 say the measure gives the governor billions more to spend without first requiring him to implement reforms, such as placing caps on spending or adjusting pensions and healthcare, said Aaron McLear, spokesman for No on 30, a coalition of small businesses and taxpayer associations.
“It’s the largest budget in the history of the state,” McLear said. “And (the state) still cut(s) higher education. That’s ridiculous.”
Some students who are opposed to the proposition said they did not think the measure’s method of increasing taxes is the best way to solve the state’s budget problem.
Fourth-year electrical engineering student Cody Peterson said he would not want a $250 million cut to the university, but would prefer a measure that raises every resident’s income taxes by a marginal amount, like one percent.
“I’m not a huge fan of raising taxes on people just because they have higher incomes,” Peterson said. “Why not take it from all people?”
Regardless, it is important for students to vote on the proposition given its direct impact on the University, said UC student regent Jonathan Stein.
“There is very rarely an initiative on the ballot that directly affects students, their education and the price they pay for their education,” Stein said.
“This year, that choice is on the ballot.”
California voters will determine the passage of Proposition 30 at the state elections on Nov. 6.
Correction: With the measure’s passage, the additional tax revenue would go toward K-12 education and community colleges, freeing up funds for other state programs, such as the UC.
