As campus officials budgeted for the current 2012-13 academic year, they made sure everyone knew of a $56 million shortfall – even if the state’s voters approved Proposition 30.

Well, the election has come and gone, the voters approved Prop. 30 — boosting income tax rates for the state’s highest earners for seven years, and increasing the sales tax for four years — and, yes, that $56 million shortfall is still with us.

Chancellor Linda P.B. Katehi knows it, and she wants you to know it, too. “While we celebrate the passage of Prop. 30,” she said in a Nov. 7 letter to the campus community, “there is still work ahead as we continue to face financial challenges.”

Here’s why: Even without Prop. 30, UC Davis is still dealing with $25 million in cuts from 2011-12 (cuts that have not been addressed permanently), an additional cut of $5 million for 2012-13 and $26 million in increased costs for salaries and benefits.

Prop. 30 did not change any of this. The money from Proposition 30 goes to kindergarten through 12th-grade schools (89 percent) and community colleges (11 percent).

For UC, Prop. 30 prevented an additional cut of $250 million, of which UC Davis’ share was likely to have been around $40 million. 

Prop. 30 also spelled relief for UC students: no midyear tuition increase this year. Nor was there an increase to start the 2012-13 year, after the state agreed to “buy out” whatever the university could have raised itself.

UC Davis’ share of the buyout is $17 million, but, unfortunately, the state will not disperse the money until next year. So that $17 million is no help for this year’s budget shortfall.

Which still leaves us at $56 million. The campus is estimating that it can shave $3.5 million of that shortfall by increasing the enrollment of national and international undergraduates, and $4 million by continued efficiency efforts (the Shared Services Center, for example).

That leaves the campus with a $48 million hole to fill, not only for this year but every year thereafter — because that dollar amount represents ongoing expenses.

Reserves and other one-time actions will take care of all but $10 million of the problem this year.

So, what happens next year? That depends — once again — on the Legislature and the governor. If they don’t give UC anything extra, the Davis campus faces a shortfall in 2013-14 that could exceed $60 million.

UC President Mark G. Yudof, for one, sees Prop. 30 as “an opportunity to bring stability to the funding of public higher education in California.”

And certainly there is the hope, as the economy improves, to see the state begin to reinvest in public higher education.

“The task ahead of us now is to do everything possible to strengthen the capacity of the university to serve people in every part of the state through academic excellence and public service,” Yudof said in a Nov. 7 letter, in which all 10 chancellors joined him in signing.

Online

Budget news

Look in the “Facts and figures” box for PDF links to UC Davis budget overview and a fact sheet on 2012-13 student tuition and fees.

Budget and Institutional Analysis

President Yudof's Nov. 2 Web chat covers Prop. 30, the trigger cut, campus climate and raises for nonrepresented staff.