Newsom’s Revised Budget Keeps $40 Billion Promised to California Colleges

Despite a state deficit, the governor's latest budget revision maintains promised funds for higher ed, but requires the UC and CSU systems to issue bonds to pay for campus and housing projects.
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  • California Gov. Gavin Newsom's revised state budget proposal includes $40.4 billion in funding for higher education.
  • The state faces a state deficit of over $30 billion.
  • The proposal directs UC and CSU to borrow money for campus infrastructure and housing projects to save state money.

California Gov. Gavin Newsom is not decreasing spending on higher education in his latest budget proposal, despite a state deficit that has grown to a reported $32 billion.

Newsom's May revision of the state budget includes some $40 billion in funds for the University of California (UC), California State University (CSU), and California Community Colleges (CCC) systems.

The latest version will include the 5% base increase in funding for UC and CSU. That's consistent with the governor's promise to include such raises annually over five years for those university systems, given they work toward certain shared goals, including making college more affordable, increasing enrollment of California residents, and improving graduation rates.

Higher education leaders commended Newsom for continuing his promise to fund education, despite the current budget situation.

"I am grateful that Gov. Newsom's revised budget proposal maintains critical funding for the University of California," UC President Michael Drake said in a statement. "... This level of funding is particularly extraordinary given the many competing priorities the Governor must balance this year."

California State University interim Chancellor Jolene Koester said in a statement that the system was "very grateful for the ongoing support of the CSU" despite "the state's worsening fiscal challenge."

Adjustments to UC and CSU Funding

One cost-saving measure Newsom proposes is shifting financing for several projects to UC- and CSU-issued bonds. Under the revised budget, the university systems would borrow the money needed, and the state would pay it back over time.

Funding for Berkeley's clean energy campus project and UC Merced and UC Riverside campus expansion projects, which had $498 million in current and planned finances, and infrastructure projects at California Polytechnic University, Humboldt, which was allotted $201 million in funding in the 2021 state budget, would both come from university-issued bonds. The state would send $33.3 million to UC and $16 million to CSU ongoing for the debt from the bonds.

The new budget also includes additional one-time General Fund financing for projects including $5 million to support the Ralph J. Bunche Center for African American Studies at the University of California, Los Angeles, $2 million toward the UC Riverside School of Medicine, and $2 million for a pilot UC entrepreneur-in-residence project.

The CSU system would also see a one-time, $75 million investment to fund improvements for the university's farming operations.

Student Housing Impacted

Student housing grants would also be impacted by the new budget, with nearly $1.1 billion in current and planned support for UC and CSU affordable student housing grants transferring to university-issued bonds.

The new budget would allocate $30 million and $45 million to be sent ongoing to UC and CSU, respectively, for the debt from the bonds.

For California Community Colleges, the budget revision proposes $450 million from the General Fund in 2023-2024 and $95.4 million in 2024-2025 for CCC affordable student housing projects.

Community Colleges Get Less Money

California Community Colleges would receive less funding under the revised budget. But, the system would receive an additional $25.4 million, on top of the $652.6 million proposed in January, in ongoing funding to reflect a change in the cost-of-living adjustment from 8.13% to 8.22%.

However, funding given to sustain enrollment growth would decrease by $2.4 million, to $26.4 million.

Funding for California Community Colleges is tied to Proposition 98, which calculates how much funding K-12 schools and community colleges should get from public dollars.

The revised budget also included $100 million to helpincrease enrollment and retention ratesacross the community college system, down from $200 million in the initial budget proposal, and $10 million a year for three years to support the Los Angeles Community College District LGBTQ+ Pilot Project.

California Community Colleges Interim Chancellor Dr. Daisy Gonzales said in a statement that the governor's budget "continues to recognize the critical value of community colleges."

"We will continue to analyze the impacts to community colleges and explore solutions with the governor and Legislature to achieve a final budget agreement that continues our forward economic and social momentum," she said.