The 2004-05 state budget adopted by the Legislature and signed over the weekend by Gov. Arnold Schwarzenegger reduces state funding for UC by 6 percent but restores funding for student enrollments, which could bring a few more students than previously expected to UC Davis this fall.

And while salary increases will have to wait a year, the 2004-05 budget does restore funding for K-12 academic development programs previously proposed for reductions and restores $20 million in funding to UC Merced.

"This is the fourth year of cuts … but it appears we are at last turning a corner," said UC President Robert Dynes. "The Legislature and governor made clear in this budget that student access to a UC education is critical to the future of California."

UC's state-funded operating budget will fall from $2.9 billion last year to $2.72 billion. This reduction will be made up through program cuts and student fee increases.

No state funding is provided for employee cost-of-living increases, though the compact signed by the governor in May offers funding for faculty and staff salary increases beginning in 2005-06. Compact details are online at http://www.universityofcalifornia.edu/news/compact/.

The original state budget proposal for 2004-05 cut UC freshman enrollments by 10 percent and redirected those students to a program in which they could transfer to UC as juniors after attending community college. The final budget, however, provides the funding for UC to offer freshman admission to students who were offered the Guaranteed Transfer Option. As of last week, there were about 5,800 UC-eligible freshman applicants in the GTO pool.

Dar Hunter, associate director of Undergrad-uate Admissions and Outreach Services, said UC Davis will offer fall freshman status to an additional 500 students. This will include about 150 students who were admitted to UC Davis through the Guaranteed Transfer Option and filed a statement of intent to participate in the program. Also, from the pool of students who are UC-eligible but had not been admitted to a UC campus, Davis will offer freshman admission to some 350 students.

Systemwide, roughly 1,300 students in the GTO pool accepted UC's original GTO offer. They will still be able to keep it if they choose, but also will be offered freshman admission.

With respect to funding for capital outlay, the budget provides $339.4 million in general obligation funds and $55 million in lease revenue bonds, fully funding the university's request for 2004-05. Projects funded address seismic safety issues, enrollment growth, modernization and infrastructure needs.

Other aspects of the 2004-05 budget include:

• K-12 academic development: The final budget preserves $29 million in previously threatened state funding for UC's academic development (or outreach) programs in California's K-12 schools. However, $4 million in internal UC funding that previously supported these programs will now be used to fund the enrollment restoration described above. As a result, these academic development programs will see a net $4 million reduction from last year's funding levels.
• Unallocated reductions: The final budget includes several further, unallocated reductions totaling approximately $50 million. Campuses and the Office of the President will be asked to find ways of achieving savings to accommodate this cut.
• Administration and libraries: The budget includes a 7.5 percent, or $45.4 million, cut to academic and administrative support, including libraries.
• Research: The budget includes a 5 percent, or $11.6 million, reduction in state-funded research, on top of the 20 percent cut these programs have taken over the previous two years. However, the final budget preserves all but $200,000 in funding for one research program, the Institute for Labor and Employment, that previously had been threatened with elimination of its $4 million in state funding.
• Student fees/financial aid: The Board of Regents set 2004-05 student fees in May. The additional fee revenue will replace state funding being cut from the university. Resident undergraduate fees will increase by 14 percent, resident graduate academic fees by 20 percent, nonresident tuition by 20 percent, and most professional school fees by higher, varying amounts.

UC will be able to devote 20 percent of new fee revenue to financial aid, instead of the usual 33 percent, but will regain flexibility in this area in 2005-06 under the compact. In addition, the final budget funds Cal Grants at a level that will cover the fee increase for eligible undergraduates.

• UC Merced: The final budget preserves the level of funding offered in the governor's original budget proposal ($10 million in one-time funding plus $10 million in permanent funding), which had been removed from a legislative version of the budget. The funding will allow UC's 10th campus to open to 1,000 students in fall 2005.

The budget also restores $80.5 million in state funding that had been cut from UC's budget on a one-time basis in 2003-04.