UC Regents See a Bleak Budget Year

University of California regents were warned this week that the state’s continuing financial crisis means they are likely to face bleak budget choices in the coming year, ranging from another round of student fee hikes to turning away thousands of eligible applicants.

“None of the budget options presented today is attractive,” UC President Richard C. Atkinson told the regents on Wednesday as he launched discussion of the university’s 2004-05 budget. “We don’t want to pursue any of these.”

The university, which took a $484-million cut in state funding for the current school year, already has raised fees by 40% since December to help offset reductions in its educational program. Along with the California State University system, UC has been warned that legislators do not intend to provide money for enrollment growth in 2004-05, even as growing numbers of additional students reach college age.

The university had planned to admit about 47,000 new students in 2004-05. But officials said Wednesday that without funding for enrollment growth, it might have to reduce that number by at least 5,000 students.

Larry Hershman, the university’s vice president for budget, said the discussion was speculative until the governor -- whether Gray Davis or someone else -- presented his or her preliminary budget in January. But Hershman told the regents that with the Legislature unwilling to raise taxes this year and the state’s economy unlikely to improve significantly in coming months, the university was not likely to find itself in a better situation.

Describing some of the options as ludicrous, Hershman laid out the choices for cuts, including faculty salary reductions and further reductions in student services, libraries, outreach programs and research.

Other possibilities include freezing freshman enrollment or asking a number of UC-eligible students to attend community colleges for their first two years, then guaranteeing them a place at the UC campus of their choice, Hershman said.

But Atkinson, who was presiding over his final regents’ meeting before his retirement Oct. 1, later proposed another option to help fill the expected budget shortfall. Saying that he was “just throwing this out,” the UC president suggested that the university consider dramatically increasing both the number and the fees for out-of-state students, who now represent about 5% of the university’s student population.

The University of Michigan and University of Virginia already have similar programs, Atkinson said. “I know this may sound bizarre.”

But several regents, and Hershman, immediately expressed interest.

“It doesn’t sound bizarre,” said regent Monica Lozano, who asked university officials to look into the idea.

Hershman estimated after the meeting that increasing out-of-state student fees by about $6,000 per student annually -- a 31% rise -- could raise enough money to help pay the cost of accommodating 5,000 additional California residents at current fee levels.

The regents are expected to hear more about the proposal at their meeting in November, when they will continue the budget discussions.