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Report 89-14: Analysis of the Governor's Proposed 1989-90 Budget: A Staff Report to the California Postsecondary Education Commission

Published by The California Postsecondary Education Commission

March 1989

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This staff report by Kevin Woolfork analyzes the 1989-90 budget for the State of California proposed by Governor Deukmejian and describes its provisions for postsecondary education. Pages 1 through 3 describe the budget in general and the many factors constraining its proposed rate of growth for the 1989-90 fiscal year. Pages 3 through 8 describes the budgets for the University of California, the California State University, the California Community Colleges, and other institutions. An appendix on pages 13-18 contains legislative testimony regarding the 1989-90 budget by Kenneth B. O'Brien, the executive director of the Commission.

On pages 10-11, the report concludes:

The Governor's Budget proposes for the University of California, the California State University, the California Community Colleges and the Student Aid Commission, an increase in General Fund support of 4.0 percent, 8.6 percent, 8.3 percent, and 0.8 percent, respectively. Enrollment growth at the University and State University is funded, but apparently at the expense of other base-budget programs. The budget provides $6.5 million for the changes specified in AB 1725, parity in University and State University faculty salaries in maintained, and no increase in the level or number of awards are proposed for the Cal Grant program.

There appear to be basic structural flaws in the way the State generates funds to pay for the programs and services it provides. The combination of Proposition 13, Proposition 4, Proposition 98, and other laws that control State revenues is on a collision course with the many laws on the books that guarantee funds for certain entitlement programs, workload-generating State operations, and automatic cost-of-living increases. While higher education has fared better than other State-funded programs in the proposed budget, this structural problem is beginning to touch higher education. In some cases, the segments made gains in proposed funds for new programs, only to find proposed cuts in their base operating budgets.

Because the State has only one short-term option, cutting programs for balancing the budget, the debate over funding priorities will be particularly intense this year. Unless the State changes its revenue and expenditure structure, higher education and other labor-intensive programs funded by the State will decrease significantly from current levels of service as early as the 1990-91 budget.

The Administration and Liaison Committee of the Commission discussed this report at its meeting on March 6, 1989.

Related Topics: Budgeting and Financing of Higher Education

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