California legislators may soon have to discuss the possibility of further cuts to state-funded programs, including the University of California, based on the state’s failure to meet revenue projections for the past three months.
Since July, the state has fallen short of its revenue estimates by $654 million, said H.D. Palmer, the deputy director of external affairs at the California Department of Finance.
California law permits the governor to make cuts to certain state institutions if the money brought in falls short of estimates by more than $1 billion, Palmer said.
It is still too early, however, to determine if cuts will happen or what measures the UC would take, said Steve Montiel, a spokesman for the UC Office of the President.
He made clear that no proposals are on the table for a midyear tuition increase.
This form of funding reduction being considered is known as “trigger cut.” According to California law, a trigger cut could amount to $100 million each from the UC and California State University systems’ budgets. For the UC, this represents 2 percent of the system’s total funding, said Steve Boilard, director of higher education at the legislative analyst’s office.
These cuts will be enacted if California’s revenue falls below the projected $1 billion of its annual revenue, Palmer said.
But Boilard said he cautions people against making the assumption that Gov. Jerry Brown is close to “pulling the trigger.”
“We warn people against drawing an annual projection based on just a few months of data because a lot of factors change from one month to another,” he said.
Personal income tax revenues for the state have actually come in at $400 million over the projections, Palmer said.
However, corporate tax revenues have fallen short by $200 million, he added.
Brown has until Dec. 15 to make a decision.
If trigger cuts were to be enacted, up to $600 million of pre-approved cuts will affect the entire state.
If annual revenue falls $2 billion short of projections, an additional $1.9 billion will be cut ““ which will mean reducing the K-12 school year by seven school days, Palmer said.