Sunday, July 20, 2003

California’s premier university system is considering charging rich students more tuition to offset deep funding cuts resulting from the state’s $38 billion budget deficit.

The Board of Regents of the University of California examined a proposal for a surcharge on wealthy students at a meeting Thursday. The university would be the first in the country to target wealthy students with a surcharge.

The proposed fee would force undergraduate students with family incomes exceeding $90,000 to pay as much as $3,000 more to attend one of the university’s nine campuses. It is expected to affect 58,194 of the university’s 160,000 undergraduate students.

“I think that is outrageous,” said Republican state Sen. Dick Ackerman, a graduate of the University of California at Berkeley. “There is already a significant program of financial aid and scholarships for people who can’t afford to go there. You shouldn’t be charging rich people more just because you can.”

The UC regents were forced last week to raise tuition 25 percent across the board to compensate for a budget shortfall that had already caused the university to cut spending by $360 million. The tuition increases were preceded by a 10 percent increase in December and might be followed by a 5 percent increase.

Universities across the country are grappling with shrinking budgets as state support and endowments dry up. Last year, tuition at public universities climbed an average of 10 percent, according to the Chronicle of Higher Education. This year, 30 states are facing serious budget shortfalls forcing tax increases or spending cuts.

The surcharge was proposed by Regent Tom Sayles who did not return calls for comment Friday. The university administration has drawn up a plan that would raise $60 million by charging the rich students an additional $1,000. But the university’s vice president in charge of the budget has said a $3,000 surcharge might be needed to make the program worthwhile.

Regent Matt Murray, the lone student on the 25-person governing board, said he supports a surcharge and lashed out at the state’s Republican legislators who have resisted tax increases intended to offset the budget deficit.

“Given the ridiculous nature of the budget situation and the limited options the university has, I think it is wise to pursue the idea,” he said. “The goal is to make sure the university is accessible to all kinds of students of all kinds of backgrounds.”

The university study of the proposal states that a surcharge might be more acceptable to the public than across-the-board cuts because it would affect fewer people, but it also acknowledges that it would be contentious.

“The university needs to develop justifications for the proposed income-threshold level. Any income cutoff is arbitrary,” the study states.

The study also considers setting the cutoff at $150,000. It stated that students who qualify for financial aid would be exempt from the fee, regardless of their parents’ income.

Regent Velma Montoya called the surcharge proposal “offensive” and said the parents in the wealthy bracket whom she has spoken with feel “put upon.”

“They already pay more into the system in terms of taxes,” she said. “And most people don’t consider a $90,000 income to be rich in California.”

Mrs. Montoya said the university should look to make cuts at the administrative level.

Mr. Ackerman proposed cuts to outreach and diversity efforts, saying, “There are more students trying to get in than can as it is.”

The state will continue to subsidize the bulk of the $16,900 it costs the university to educate each student per year. The university hadn’t raised fees in seven years.

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