While Washington begins it’s 2008 legislative session with a large budget surplus that the Governor and many legislative leaders have sworn to protect, the fiscal outlook in our large neighbor to the south is quite grim.
Governor Schwarzenegger’s proposed 2008-09 budget was released a week ago and it calls for 10% across-the-board reductions in virtually every state funded program or service. For higher education in California, the consequences, particularly for students, could be disastrous.
A story last week in the Los Angeles Times indicates that the University of California and California State University systems could face student fee increases, caps on enrollment, reduced class offerings and layoffs of part-time instructors if the Governor’s budget recommendations are adopted.
California faces a $14.5 billion budget gap, the result of declining revenues as a result of well-publicized problems in the housing markets as well as long-term structural budget issues which date back several years and for which only one-time fixes have been employed over the years to correct. The Governor is also calling for immediate reductions in the current fiscal year budget and at least one major bond rating agency has intimated it might downgrade the state’s rating if the budget gap is not permanently corrected.
The Governor’s budget would reduce higher education funding in California by $1.1 billion, although his office contends that his budget proposal is consistent with the “compacts” negotiated in 2004 which were intended to provide a guarantee of funding for higher education in exchange for specified levels of performance from the institutions.