In the final days before adjournment, the California Legislature addressed the shortfall in state higher education funding by restoring $100 million earmarked for the University of California and the California State University systems. Gov. Jerry Brown can ensure the higher education system gets this funding by signing Assembly Bill 1476.
An additional $50 million for both the University of California and state university systems were included in the 2014-15 state budget enacted in June. This allocation was tied to a target level of property tax receipts. While overall state general fund revenues have exceeded projections by $500 million, property taxes did not reach the level required to trigger the higher education funding.
These funds are badly needed by both systems. State general fund support per student at CSU and UC remain near the lowest point in 30 years. State spending per student has been virtually cut in half since the 1970s. Brown and the Legislature did increase general fund dollars for higher education by 5 percent, but that was offset by a freeze on tuition and fees that effectively cut the increase in half.
The future is troubling. California’s higher education system – once the envy of the world – can’t meet the state’s need for a highly skilled workforce. By 2025, California will need 2.3 million more graduates with degrees, certificates and diplomas than it is on track to produce today. California’s public colleges and universities need to produce 40 percent more graduates than they do today – an impossible goal without adequate funding.
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Providing adequate funding is crucial because higher education is the backbone of California’s economy. The UC system alone contributes more than $14 billion in economic activity, and every dollar invested by the state in CSU campuses produces $5.43 for the California economy.
While the budget called for a certain level of property taxes to provide the additional funds to higher education, it should be noted there was no nexus between property taxes and funding. The property tax trigger was simply a mechanism to make sure the $100 million would be there.
When the property tax shortfall occurred, Assembly Speaker Toni Atkins, D-San Diego, spearheaded the effort to restore the funds based on the overall revenue picture that assured the availability of adequate dollars. The result was AB 1476, a measure that passed both houses of the Legislature in late August. Now, the bill goes to Brown for his signature.
The state Department of Finance opposes AB 1476. The rationale was that it is too risky to designate more money for higher education when tax revenues can fluctuate from year to year. That same argument could be made regarding virtually every item in the state budget. Higher education needs predictable revenue streams, not crumbs that may fall off the table in a good year.
Brown has made a strong case for the need to invest in California’s future. No investment is more important to California than higher education. Health care, technology, finance, entertainment and other knowledge-based sectors have achieved critical mass here in no small part because our higher education system has produced the people, research and lifestyle that make these sectors of the economy grow and thrive.
In considering AB 1476, the governor should recognize that this is a $100 million investment we can’t afford not to make. The two best things going for the state are its weather and its higher education system. We may not be able to do much about the weather, but we can make sure our public higher education system is the best in the nation and the world.