Fee hike still in budget

On the heels of a $1.4 billion deficit, Gov. Arnold Schwarzenegger proposed Monday in the May Budget Revision a fiscally conservative budget that explores different avenues to increase the state revenue in the future without imposing tax increases.

And while the revise calls for the expansion of funding for education overall, the University of California budget remains in line with the governor’s original budget released in January, meaning that students will still see a fee increase of 7 to 10 percent for the 2007-2008 academic year.

In March, the UC Board of Regents voted to increase student fees to deal with state budget constraints, a move which has prompted student leaders to lobby the governor and legislators in the past few months to buy out fee increases.

In response to the May Revision, Bill Shiebler, president of the UC Students Association, expressed disappointment, maintaining that the governor has “turned his back” on low- and middle-income families.

“Thousands of students, teachers and families have voiced the need to stop these increases altogether through a fee buyout that many legislators support. But instead, the governor called for an increase, a tax on the middle and working class of our state,” Shiebler said.

The fee hike, which is set to be implemented starting with the upcoming summer session, remains within the boundaries of a compact initiated in 2004 between the university and Schwarzenegger, which put a 10 percent ceiling on fee increases for six years.

“We are very pleased that, with the state’s resources still highly constrained, the governor has reaffirmed his support for the work the University of California is doing for California,” UC President Robert Dynes said in a statement.

And while the UC will not be receiving any additional funds, the overall education budget will be expanding because of a 1996 ballot measure, which developed a complex formula in setting the floor for annual funding for K-12 schools and community colleges.

“While others have called for us to reduce funding for education, kindergarten through 12th, my budget fully funds Proposition 98 to the tune of $57.6 billion, up from $55.4 billion in the current year,” Schwarzenegger said in a speech proposing the revise.

Budget increases for education and some other areas led Schwarzenegger to cut state social welfare programs in an attempt to close the deficit, drawing criticism from California democratic legislators.

Pointing to the decreasing state deficit in the past few years, Schwarzenegger emphasized that in order to balance the budget, California should continue to exercise spending restraint as it has in the past.

Turning to another avenue of balancing the budget, Schwarzenegger and his advisers proposed the privatization of EdFund, the state’s student loan guarantee agency.

Though students would not be directly affected by the transaction, Schwarzenegger said he hopes that if the agency is sold, it could bring in revenue for the state.

“We are confident enough about its value in the open market to include nearly $1 billion in our general fund,” Schwarzenegger said.

For future means of increasing revenue, the governor also proposed privatizing the California Lottery by leasing it to the private sector but still keeping ownership of it.

After the May revise, the budget still needs to be approved by the state Assembly and Senate, with the final deadline on June 15.

With about a month left, student leaders said they will continue to lobby state legislators in hopes that a student fee buyout can still happen.

“UCSA is pushing to pressure the legislature where the governor has failed to include students,” Shiebler said.

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