The University of California received its first state funding increase in four years when Gov. Arnold Schwarzenegger signed a new budget July 11 that includes a 5 percent increase in total support for the 10-campus system.

The 2005-06 budget falls in line with the higher education compact reached last year between the governor and university officials that ensures a gradual increase in funding over the next five years in return for increased accountability.

The agreement calls for funding increases for student enrollment growth, faculty and staff compensation, the opening of UC Merced, and an initiative to expand the training of K-12 science and math teachers, among other things.

"For the UC system and the Davis campus, the new budget is good news after a long period of budget cuts," said Kelly Ratliff, assistant vice chancellor for budget resource management. "It is an opportunity, for example, to provide some long-awaited faculty and staff salary increases."

For the campus, Ratliff said, the budget supports funding priorities for 2005-06 in the areas of graduate student support, and operations and maintenance for some new facilities. In addition, the campus will invest funds to address ongoing purchased utilities shortfalls and deferred maintenance.

However, Ratliff noted, the budget does not "restore" the cuts UC has endured in the past few years. "We are pleased the compact was honored and that the overall reductions are no longer occurring," she said. "But keep in mind that the UC budget is less than it was four years ago."

'Halts the cuts'

The budget as signed by the governor also preserves funding on a one-time basis for the university's student academic preparation programs, which work to improve academic achievement and college preparation for disadvantaged students.

"We are grateful to both the governor and the Legislature for adopting a budget that halts the cuts of the last few years and invests in higher education's contributions to California," UC President Robert Dynes said in a statement released on July 11. "This is a budget that allows us to meet our commitments to the incoming class of students, reward our faculty and staff, continue our work in the K-12 schools, and continue expanding our contributions to California's economy, health, and quality of life."

Over the last four years, UC has lost 15 percent of its state operating funds while seeing a 19 percent increase in student enrollments. The compact, an agreement reached last year by the governor and the UC and California State University systems, offers the university new budget stability starting in 2005-06 by establishing funding and performance expectations over a multi-year period.

Consistent with the compact, the final state budget for 2005-06 provides a $134 million increase in state general funds for UC operations, or 5 percent, over the 2004-05 fiscal year. UC's state-funded operating budget for the fiscal year that began July 1 will total $2.843 billion.

The budget includes the following for UC:

Faculty and staff compensation: A 3 percent funding increase for salary increases to be effective Oct. 1, including merit-based increases, and additional funds to help contribute to employee health benefit costs and to address market-based and equity issues. (Specific compensation levels are subject to local programs and collective bargaining agreements.)

Enrollments: Funding for enrollment growth of 5,000 full-time-equivalent students in 2005-06, a 2.5 percent increase, consistent with the compact. UC Davis anticipates enrollment growth of about 250 full-time equivalent students, which is a less than 1 percent increase over last year.

Student fees and financial aid: The Board of Regents last November approved undergraduate and graduate student fees for 2005-06, consistent with the levels outlined in the compact and consistent with the final state budget outcome. The action included increases of 8 percent ($457) for resident undergraduates and 10 percent ($628) for resident graduate academic students. Details about 2005-06 student fees are available at: http://www.universityofcalifornia.edu/news/budget/fee_fact_sheet05.pdf. UC financial aid, in conjunction with Cal Grants, will cover the fee increase for undergraduates eligible for UC grant aid. (The regents were scheduled to consider additional proposed fee increases for professional school students at their July 20-21 meeting.)

Science and math initiative: A $750,000 allocation for UC to begin the "California Teach: One Thousand Teachers, One Million Minds" program. In this program, UC will work with corporate partners and the CSU system to expand the training of high-quality science and mathematics teachers for California's schools in order to bolster the state's long-term economic and technological competitiveness.

Academic preparation: Continuation of $17.3 million in state funding for UC's academic preparation programs, which work to help improve academic achievement and college preparation among students in disadvantaged public schools in California. As was the case last year, the governor's budget message again indicated that this funding will be sustained "on a one-time basis, with the understanding that the university will work with the administration to fully evaluate the cost-effectiveness of each program and eliminate those that cannot demonstrate an adequate return on investment."

Capital improvements: Funding of $352.5 million from a voter-approved general obligation bond measure to expand and upgrade academic facilities to support enrollment growth and to maintain progress on seismic and other life-safety improvements while also addressing essential infrastructure and building renewal needs. At UC Davis, for example, this will include a physical sciences expansion project and two utility projects.

UC Merced: Continuation of $10 million in ongoing operating funds plus $14 million in one-time money for the new campus opening in September, along with enrollment funding (part of the above 5,000-student allocation) to enroll its entering class for 2005-06.

In other budget-related news, the UC system is facing a lawsuit over tuition increases from a group of professional school students who say they should be exempt from new increases.

— Clifton B. Parker contributed to this story.