Schwarzenegger, Colleges Reach Budget Compromise

Gov. Arnold Schwarzenegger would scale back a proposed hike in graduate school tuition and abandon strict limits on future college enrollment as part of a multiyear budget deal quietly forged with higher education leaders that will be announced today.

In turn, school officials would accept a steep one-time spending cut in the fiscal year starting July 1.

“This is how we move forward,” Schwarzenegger said Monday night. “Everyone chips in a little bit, but does it happily rather than having anger and protests afterward.”

The behind-the-scenes agreement, hammered out in weeks of negotiations with the state’s universities, is the latest deal the governor has reached in a sweeping effort to win approval of an on-time budget with no new taxes.

Among other changes negotiated, the governor would restore some of the $33 million used to recruit students from disadvantaged backgrounds -- retreating from plans to do away with such outreach programs. Graduate school fees would rise 20% -- not 40% as the governor initially proposed. Other student fees would climb an average of 10% a year over three years.

Schwarzenegger is to announce the deal today in the Capitol along with leaders from the University of California and California State University systems. Officials at the two systems declined to comment Monday night.

The pact would become part of the governor’s proposed budget that must be approved by the Democrat-controlled Legislature.

Democrats responded angrily Monday to the development. They had seen the education cuts as an issue on which the Republican governor was vulnerable. Criticizing him may be tougher now that higher education officials have signed on to the governor’s plan.

“It’s hard to wage a battle when the people you are supposedly fighting for have already signed the peace agreement,” said Jack Pitney, a professor of government at Claremont McKenna College. “The Democrats need some traction against Schwarzenegger. So far he has only greased the skids for them.”

“We were taken aback” by the university officials’ agreement, said Assemblyman Dario Frommer (D-Los Feliz). “I’m surprised they would go along with such a deal. I think the university officials need to take a class in civics. This is a government where the Legislature proposes a budget and the governor ratifies it. They may have made a deal with the governor, but they haven’t made it with us.”

In the budget proposal he released in January, Schwarzenegger called for 10% reductions in enrollment of new freshmen, saving the state nearly $25 million. Students turned away from UC and CSU campuses are being given the option of attending community college and transferring in after two years.

Under the deal reached between the state and higher education leaders, the enrollment curbs would remain intact this year. But beginning in 2005-06, the state would provide enough money to cover anticipated annual enrollment increases of about 2.5%.

For the 23-campus California State University, the deal calls for 2.5% enrollment growth, 3% increases in the base budget and moderate fee increases every year for the next few years, according to a source familiar with the deal.

For the UC, the deal provides for a level of predictable annual growth in all fundamental areas of the university, including research, faculty salaries, enrollment and student fees.

“In every area, they’re trying for a level of predictability,” a higher education source said.

As part of the deal, the administration is insisting that the universities take steps to use taxpayer dollars more efficiently. Among them is restructuring some of their course offerings so that more undergraduate students can earn degrees within four years. The university system would also make it easier for community college students to determine upfront which classes they take will be transferable for credit in its schools.

“It’s a huge win for higher education and it’s a huge win for the state and it’s a huge win to make sure that we continue our tradition of producing the brightest young people,” Schwarzenegger said.

The agreement would restore the “compact” between the governor’s office and the state’s two public university systems that was crafted in the mid-1990s with then-Gov. Pete Wilson. It was later recast as a “partnership” by then-Gov. Gray Davis.

The agreement provided a measure of protection for the university systems, pledging certain minimum levels of state financial support for enrollment growth and other operational needs. Amid recurrent budget crises, such promises were not always kept.

Democrats were angered by the deal. They accused the university officials of selling out their students for assurances of only minimal growth.

“This is a severe blow to both UC and CSU. The only cut I am ready to make is in the salaries of the administrators who agreed to this,” said Jackie Goldberg (D-Los Angeles), chairwoman of the Assembly Education Committee. “If we agree to these cuts and then 3% growth in the future, it will take these institutions 10 years to get back to where they are now.”

Said Assemblyman Joseph Simitian (D-Palo Alto): “The administration’s January budget does irreparable harm to the UC and CSU system. Suggesting that somehow that will be remedied by modest guarantees for growth and cost of living ... is quite wide of the mark.”

Goldberg and other Assembly Democrats have yet to be briefed on the scope of the deal, but they are already planning a news conference to announce plans to fight it. They are likely to be joined in that campaign by Senate Democrats, who have been holding town hall meetings on university campuses about the harm any cuts would do to California’s economy.

Among Democrats, the thinking is that this is one issue on which they can trump the administration. They believe the public will support resistance to the university cuts proposed by the governor. And they are angry that university officials have undercut them by striking a separate deal with the administration.

Lawmakers were especially frustrated that the deal does not restore admission to the thousands of applicants who were qualified to attend UC or CSU schools this year -- but directed to community colleges instead.

“Those students in the class of 2004 are told, ‘Take a hike. Next year we’ll look at getting everybody in, but too bad for you guys,’ ” Goldberg said.

Times staff writers Rebecca Trounson and Stuart Silverstein contributed to this story from Los Angeles.