UC General Fund Budget Sliced by an Eighth Absent Federal Funds

The governor and Dept. of Finance like to distinguish between ongoing state general fund financing of UC versus one-time. As blog readers will know, yours truly thinks the distinction is arbitrary. In his January budget, the governor proposed to give UC just under $4 billion next year, compared to a little over $3.9 billion this year, a 1.5% nominal increase year-over-year. In the May Revision just announced, UC loses all increments to its budget that were proposed in January and is proposed to receive only about $3.4 billion, a cut of 12.6%, unless federal funding as currently being proposed by Democrats in Congress is enacted.*

If federal funding currently proposed by the Democrats were to be enacted, $376.4 million of the cut would be restored. (The budget proposal has a "trigger" that would automatically add federal funding to the proposed amounts.) The overall nominal cut would then be reduced to 3.1%, year-over-year. It is certainly not impossible that Congress will ultimately enact something, although possibly less than the current proposal. If such an enactment were to occur before the deadline for the legislature to pass a budget in mid-June, presumably whatever federal funds there were would be added and the net cut would fall somewhere between 3.1% and 12.6%.

Note finally that the tuition part of the UC core educational budget - not included in the figures just cited - will depend on enrollment next year including the out-of-state and international enrollment levels which provide extra revenue. There is obviously uncertainty about enrollment, particularly of the out-of-state and international students, given current circumstances about what will be provided in the fall in terms of online vs. in-person instruction.

In response to the governor's May Revise, UC president Napolitano has released the following statement:

UC President Napolitano statement on May revision to Gov. Newsom’s budget

May 14, 2020

The University of California recognizes the unprecedented challenges California is facing in the wake of COVID-19 and regrets that Gov. Newsom was put into a position to steeply reduce the University’s budget in response to the State’s dramatically diminished revenues. Regardless, UC stands with the governor and the legislature to help lift the State out of this economic crisis.

Source: https://www.universityofcalifornia.edu/news
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*Total funding this year was estimated in January to be $3,938.2 million. For next year, its budget was to be $3,998.0 million, a 1.5% increment. The May Revise removes all increments and subtracts a total of $376 million, leaving $3,440.5 million, a 12.6% reduction. Sources: http://www.ebudget.ca.gov/2020-21/pdf/BudgetSummary/HigherEducation.pdf (p. 88) and http://www.ebudget.ca.gov/FullBudgetSummary.pdf (pp.50-51).

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UPDATE: The posting above was made based on the information in the sources listed above which were the only budget documents initially released after the governor spoke. Since that time, the Dept. of Finance has released still more detailed budget information on UC: 
http://www.ebudget.ca.gov/budget/2020-21MR/#/Department/6440. According to that document, the cut in the UC budget was in fact more severe than what was listed in the descriptive analysis in the initial release. It puts the cut at 15.7% relative to what was proposed in January for 2020-21 and 14.4% relative to the current year. (Total now = $3,369.5 million.) So, the nominal cut relative to the current year is about one seventh rather than one eighth.