University Students Could Face 10 Percent Fee Hike

California State University's board of trustees will meet Friday to consider a fee hike of up to 10 percent as part of an effort to overcome budget shortfalls.

Gov. Arnold Schwarzenegger has insisted he would not sign a budget without increases to higher education spending following funding cuts that began in 2007.

The governor's plan includes adding $366 million for the CSU system. However, that plan assumes a 10 percent increase in fees, said CSU spokesperson Mike Uhlenkamp.

The State Assembly's budget calls for $416 million, $50 million more than the governor's plan, to go to CSU campuses, said Uhlenkamp. Such an increase could help log-jammed schools.
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"The idea would be that if the funds do come through, funding will go to a variety of things--opening access to classes, reduction of furlough days and opening up classes probably in the spring--basically trying to get back on the level before the crisis," Uhlenkamp said.

The staff of the board of trustees recommended at least a five percent fee increase, which would raise the basic price to attend CSU next fall by $204 to $4230 per year. It would also add an additional $50 million to the school system's budget.

H.D. Palmer, spokesman for the California Department of Finance, said part of that money was meant to cover a larger base enrollment. He estimated that an additional 8300 CSU students and 5100 University of California students would be able to enroll in classes if the funding increase is approved.

With overcrowded classrooms and schools suspending classes, the remainder of the funds will be "up to the management of the university systems to decide how to best spend," said Palmer.
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The budget for higher education has taken a beating during the current recession. The general funds allotted to higher education, which make up a significant portion of both the UC and CSU budget, fell $839 million and $815 million respectively from the 2007-08 to 2008-09 academic years.

With little wiggle room in their budgets, both university systems have increased student fees in order to balance their budgets. Fees at CSU have already increased 30 percent after two separate hikes, while UC has raised fees 32 percent. The increases have sparked rallies and anger from university students.

Some students view the fee hikes as placing the load of higher education on low- and middle-income students, who will be burdened with higher costs and potentially with student loans. However, with the lack of alternatives given the diminished funding from the state government, both university systems have few alternatives when seeking ways to generate immediate revenues.

Looking solely at the UC budget, the struggle to find alternative revenue becomes evident.

Seventy-four percent of the UC's budget is fixed. Government grants or private donations for specific department or research projects and like revenues can't be used to defray costs or pay teachers.
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Of the other 26 percent of the revenue, only half comes from the state's general fund. This portion has to cover staff salaries, academic salaries, benefits, equipment, financial aid and senior management salaries (which account for only one percent). Thus when the general fund is cut 25 percent, (prior to American Recovery & Reinvestment Act funding) the only options are to increase fees or make cuts.

"We are becoming the masters of the art of cutting on the fly unfortunately," said Peter King, director of media relations for the UC office of the president. "We have to come up with a balanced budget. We aren't the federal government; we can't print money."

The increases in revenue from the proposed versions of the 2010-2011 budget are a step toward getting UC back to its 2007 funding levels, said King, but "it certainly doesn't get us back to whole. We asked for $900 [million]."

King said the potential state funding will go toward hiring teachers and unfreezing positions, allowing classes to open and enrollment to increase. He said UC has put in motion plans to strengthen systematic efficiencies to lower administrative costs, such as central purchasing of certain items and better information technology coordination, but those benefits will only be seen in the long term.

In the short-term, UC will continue to see increased enrollment demands, a challenge the state has continued to struggle with.

As overall state funding to higher education has increased over time, per-student spending has dropped. Over the past decade, average per-student state support has fallen nearly 50 percent to $7570, while student tuition costs have risen almost $2500 during the same period.

Either the governor's or the assembly's budget proposal, if enacted, could help to put the state's higher education system on a path to recovery, but it's still a long way to restore funding to its level a decade ago.

"Without the funds," said King, "I'd hate to think what that would require to bring us to balance the budget."

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