The Continued Economic Woes of Colleges in California

By Rachel Higgins / San Diego Politico / Nov. 2, 2012

Intro from SD Politico: Education reform issues are something many San Diego Politico readers are passionate about, and the feature that follows builds on this topic by looking at the soaring tuition rates throughout the UC and CSU systems. Writer Rachel Higgins takes a by-the-numbers look at what is happening in California higher ed, and examines what politicians are aiming to do about it. Rachel writes full-time for an educational website that markets itself as a place to search for accredited degrees online and a general resource for anyone interested in learning more about college options.

While college students nationwide have contended with skyrocketing tuition prices in recent years, the growth of these costs has been particularly substantial in California. The increases have been primarily attributed to the state budget, and in response, many California congressmen have enacted various prescriptions intended to control costs more effectively.

In January 2010, California Gov. Jerry Brown proposed an annual state budget that made significant cuts to various state services, including $500 million slashed from the University of California. This reduction – 16.4 percent from the previous year – led to a dubious historical watermark: for the first time ever, student tuition contributions ($2.7 billion) were higher than state fund support ($2.5 billion). The cuts also dropped the state’s per-student funding even further. Between 1990 and 2011, this rate fell 57 percent, though the largest decline occurred in 2008-09 when the higher education budget was slashed 20 percent. In addition, Gov. Brown cut funding to both the California State University system by $500 million and the state’s community college programs by $400 million.

Higher education was not the only area targeted by Gov. Brown’s budget cuts. The 2011-12 plan implemented a rainy day fund of $1 billion, put measures in place to eliminate a budget gap of $25.4 billion, and cut spending by $12.5 billion. To offset these costs, state employees saw their wages decline by 8 to 10 percent, while Medi-Cal, welfare-to-work and programs benefiting children and low-income families were dramatically reduced. Brown was apologetic, but steadfast in his resolve when he unveiled the 2011-12 budget. “For 10 years, we’ve had budget gimmicks and tricks that pushed us deep into debt,” he said. “We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth.”

For the following year’s budgetary proposal, Gov. Brown included several prescriptions aimed at reducing the burden on California’s college students. Most notable was his “free online textbook library,” included in SB 1052, which would provide complementary course materials for the most popular lower-level courses in the state’s collegiate system. The library will be overseen by the California Open Education Resources Council, a group comprised of faculty from all three of the state’s academic divisions. He also implemented SB 1053, a “companion bill” that created a digital library of open source textbooks and course materials. Both libraries are licensed for creative commons, allowing students free access to materials while enabling instructors to create customized, web-based curricula. In addition, Brown signed SB 1028, which allocates $5 million for the library measures from the ScholarShare Trust. The absent funds will be matched by private donors and philanthropic organizations.

The 2012-13 budget also targeted students’ tuition woes. For both the UC and CSU systems, the General Fund will increase by $125 million provided that the schools retain annual tuition fees from the previous academic year (of $12,192 and $5,472, respectively); however, this measure depends on voter approval of Gov. Brown’s tax initiative in the November 2012 election. The budget also increased community college apportionment funding by $159.9 million (thereby retiring apportionment referrals) and added $23.8 million to the Proposition 98 General Fund, which will provide $28 to participating schools for each enrolled student. In order to access the General Fund, participating institutions must record graduation rates of at least 30 percent and lower the student loan cohort default rate (the number of students who default on their loan payments within three years of graduation) to 15.5 percent.

However, student tuition still stands to rise in the coming year. College costs are likely to rise by 6 percent pending passage of Gov. Brown’s Proposition 30, which increases California sales tax by 0.25 percent for the next four years and increases income tax rates for those who earn more than $250,000. If the proposition does not pass, then tuition will rise by as much as 20 percent – and the UC system will lose as much as $250 million in state funding.

Convincing the public to approve a measure that raises taxes is always a tricky sell for politicians, but the measures created by Gov. Brown that will appear on the ballot next month could enable California to effectively control tuition costs in the long term. Though Gov. Brown and other state politicos ultimately control how much money is allocated to different programs, California voters have the power to influence tuition costs in the upcoming election.