Gov. Arnold Schwarzenegger signed the 2006-07 state budget last Friday that funds enrollment growth at the University of California, provides state funding to "buy out" student fee increases, and allows the university to offer salary increases to faculty and staff.

The budget also preserves funding for UC's academic preparation programs for K-12 students, and includes new funding for UC efforts to encourage and assist community college students in transferring to a UC campuses to achieve a four-year degrees.

For the Davis campus, the governor's budget includes spending authority for two significant construction projects: a $22 million expansion and renovation of King Hall, which houses the School of Law, and $3 million to start the planning process for a new veterinary medicine building.

The state's share of costs — $18 million for the King Hall project and the full amount for the vet med planning work — is not guaranteed, however. The money is included in a $10.4 billion bond measure due to go before voters in November.

"The budget the governor signed is good for students, their families and campus employees," said Kelly Ratliff, assistant vice chancellor of budget resource management. "We deeply appreciate that next year's budget includes salary increases for faculty and staff and also protects funding for UC's academic preparation programs."

The final budget provides state funding above the minimum outlined in the governor's 2004 "compact" with UC. The university's state-funded budget in the fiscal year beginning July 1 will total $3.077 billion, an increase of $234 million or 8.2 percent, above the 2005-06 level.

The budget includes the following for the UC system:

• Enrollment growth — Funding for enrollment growth of 2.5 percent in 2006-07, at a level of $9,900 per student. This increase allows UC to continue meeting its obligations under the Master Plan for Higher Education to offer a place to all eligible California undergraduate applicants and to continue increasing graduate enrollments, including in the health sciences.
• Academic preparation, transfer programs — The budget preserves $17.3 million in state funding for UC's academic preparation programs, which work to improve the academic performance and college preparation of educationally disadvantaged students in K-12 schools across the state.

UC officials credit Assembly Speaker Fabian Nunez (D-Los Angeles) for his efforts in securing an additional $2 million in new funding to expand community college transfer programs to UC. This funding will be used to provide advising and academic support to students preparing for transfer to UC. The focus of the effort will be on community colleges with high numbers of educationally disadvantaged students but historically low transfer rates to UC.

• Faculty and staff compensation — The state budget and other university revenue sources will fund an average 4 percent increase in employee compensation in 2006-07, subject to collective bargaining requirements where applicable.

"The salaries of UC faculty and staff continue to lag those at institutions we compete with, putting us at a serious disadvantage in recruitment and retention," UC President Robert Dynes said. "This funding increase is very welcome because it allows us to reward our hard-working employees and prevent the further widening of the salary gap."

• Research — Funding of $6 million is provided for UC labor research, restoring state support for this program to its 2000-01 level. In addition, the budget provides an augmentation of $4 million for the Gallo Substance Abuse Program at UCSF.
• Student fees — The budget provides $75 million in state funding to avoid a student fee increase for 2006-07. "This is very good news for students and their families," Dynes said. "The governor and the Legislature recognized the university's need for additional resources to maintain the quality of our programs, and they also recognized the value in allocating state resources to give families a break from the fee hikes of recent years."

Mandatory systemwide fees for resident undergraduates in 2006-07 will remain at $6,141 per year, or an estimated average $6,802 with the inclusion of campus-based fees. Resident graduate academic students will pay $6,897 in mandatory systemwide fees, or an estimated average $8,708 with the inclusion of campus-based fees.

The state buyout of student fees does not apply to a 5 percent nonresident tuition hike already approved by the Board of Regents for undergraduates only. Nonresident students will pay an estimated average total of $25,486 at the undergraduate level and $23,669 at the graduate level to attend UC in 2006-07.

The state buyout eliminates the need for a 5 percent increase in professional school fees in 2006-07, but it does not eliminate a one-year, temporary $350 increase for professional students approved by the regents last year to help cover lost revenue associated with a lawsuit regarding professional fees.

The regents last year also approved increases in selected professional school fees for 2005-06 but deferred a portion of those increases to 2006-07; students will still see those increases as well. Total fees for professional students in 2006-07 will range from about $12,000 for nursing to about $25,000 for law.

• Science and math initiative — The budget includes $375,000 in addition to the $750,000 in the 2005-06 budget for UC's California Teach program to expand the training of science and mathematics teachers for California's schools.
• Capital improvements — The budget calls for $340 million in general obligation bond funding for construction and renovation of UC facilities to address enrollment growth, life safety and infrastructure renewal needs. These funds are dependent upon Proposition 1D, an education facilities bond on the November ballot.
• UC Merced — The budget continues $14 million in one-time funding, in addition to $10 million in base funding plus funding for enrollment growth.