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The UC Board of Regents on May 7 approved student fee increases for 2009-10 and began laying the groundwork for employee furloughs and-or pay cuts.

Furloughs and pay cuts have not been approved. “But President (Mark G.) Yudof believes it is important for the university to be in a position to act if additional reductions are necessary,” Executive Vice President Katherine N. Lapp said in a May 6 memo to employees.

The student fee increases, which take effect with this summer’s academic programs, join a number of other actions that the UC system and the campuses are taking to deal with a $437 million shortfall in state funding. (Dateline went to press, with this article, before Gov. Schwarzenegger released his revised budget scenarios for 2008-09 and 2009-10 — taking into account the possible failure of budget-related ballot propositions on May 19; read UC's analysis of those scenarios, and their impact on the UC budget, with updated figures.)

The educational fee is going up 10 percent and the registration fee 4.2 percent; the average of both is 9.3 percent for undergraduates, graduate students and professional school students.

The fee hikes amount to $662 for undergraduates who are California residents, bringing their total systemwide fees to $7,788. With campus-specific fees, average total fees in the UC system will be approximately $8,720 for resident undergraduates (or $10,405 at �ٺ���Ƶ, with campus fees and health insurance added).

The fee hikes amount to $750 for resident graduate academic students, bringing their total systemwide fees to $8,736 (or $11,521 at �ٺ���Ƶ).

Nonresident tuition for undergraduates will climb 10 percent, to $22,021, and stay the same at $14,694 for graduate academic students and $12,245 for graduate professional students.

The board voted 17-4 to approve the fee package, with Lt. Gov. John Garamendi, Eddie Island, Odessa Johnson and D’Artagnan Scorza dissenting.

Financial aid enhanced

UC officials said the educational and registration fee increases will generate about $152 million for the system. (Nonresident tuition stays with the campuses.)

Of the added fee revenue, $54.2 million will bolster financial aid for undergraduate and graduate students — enhancing an aid program that the university already describes as robust, even more so with previous actions to help mitigate the impact of higher fees for most UC undergraduates and their families.

For example, the new Blue and Gold Opportunity Plan covers systemwide fees for California residents whose families earn less than $60,000 a year and who qualify for financial aid.

Further, “Substantial increases in federal, state and university student aid and tax credits will ensure that 81 percent of UC undergraduates with incomes below $180,000 will have access to enough new resources to fully offset the fee increase,” Yudof said.

The university will use the remainder of the added fee revenue, almost $100 million, to address state budget reductions, mandatory cost increases and other pressing needs, including student support and mental health services.

Good news, bad news on total shortfall

In February, when Gov. Schwarzenegger and the Legislature approved the 2009-10 state budget, UC calculated a $450 million shortfall: $115 million in new cuts, $122 million in underfunded enrollment, and $213 million to cover the rising costs of doing business, say, for utilities and employee health benefits.

Since then, UC received $268 million in federal stimulus money, of which $255 million had already been figured into the budget. The extra $13 million, therefore, cut UC’s shortfall to $437 million.

Now, with an additional $100 million in student fee revenue, the shortfall is down to about $337 million, to be shared by the Office of the President and the 10 campuses. (Dateline went to press, with this article, before the governor released his revised budget scenarios for 2008-09 and 2009-10 — taking into account the possible failure of budget-related ballot propositions on May 19; read UC's analysis of those scenarios, and their impact on the UC budget. In the worst-case scenario, UC estimates a shortfall of $531 million.)

Budget-cutting actions to date include freezing senior managers’ salaries, restructuring and downsizing the Office of the President, curtailing faculty recruitment and implementing hiring freezes at the campuses.

At the same time, Yudof is asking the regents for clear authority to impose furloughs and-or pay cuts, should he deem them necessary. A prerequisite would be a regents’ declaration of a financial emergency.

All of this is spelled out in a proposed amendment to the board’s standing order that lists the president’s official duties. Yudof’s office also has prepared draft guidelines for furloughs and-or salary reductions.

The regents reviewed the policies on May 7 but took no action. Faculty and staff input is now being sought, and, after that, Yudof will ask the regents to approve the standing order on financial emergencies; he already has the authority to implement the accompanying guidelines.