The fiscal crisis in California, the world's eighth largest economy, seems destined to jeopardise the integrity - and future - of higher education in the state.

Events escalated at the beginning of the state's new fiscal year on 1 July when the optimistic budget package signed by Governor Arnold Schwarzenegger in February proved to be untenable.

Without anticipated income and tax revenues, California's $24 billion budget deficit now requires draconian measures. To wit, the state has voted to cut $16 billion from its programmes and beg, borrow or steal the remaining $8 billion from municipal and state coffers.

The two university networks - the University of California and the California State University - expect to have their budgets cut by 20%, from $3.61 billion to $2.79 billion in 2009-10.

Within the three-tiered system, only the state's 110 community colleges fare better, having their state funding reduced by only 6%.

In total, however, more than three million students will be affected when term begins again in a couple of weeks. In addition to facing reduced enrolments, increased fees, expanded class sizes, fewer subject choices and resources, students may also be faced with long-term institutional reorganisation.

The degree of cost-cutting in California, says Terry Hartle, Senior Vice-president of the American Council on Education, is unprecedented. Hartle adds: "In the 30 years I've been watching higher education policy, I've never seen a state implement budget cuts of this size and scope."

And yet it must. One of the most controversial - but necessary - strategies will see university administrators furloughing staff and academics. They must either accept the proposed package of furloughs or face layoffs.

Edict fashion, this was the alternative proposed by CSU Chancellor Charles Reed to the system's nearly 46,000 faculty and staff. While furloughs were reluctantly approved, so too was a non-confidence vote in Reed's leadership. Events as they unfurl at the country's largest university system promise to be messy.

By contrast, the situation at UC has proved to be more equanimous. System-wide furloughs, approved by the Board of Regents, are expected to save the 10-campus institution an estimated $813 million. The remaining shortfall of $335 million will be met through various measures including student fee increases, debt refinancing and administrative cuts in the Office of the President.

Referring to the cuts as a "short-term solution", UC President Mark G Yudof noted they were, "just one step toward finding the best ways to ensure long-term excellence and access for students and everyone we serve. We're doing all we can to minimise the impact of these cuts on the quality of all we do".

In another attempt at damage control, the recently minted Commission on the Future of UC will explore ways to implement fundamental, long-term cost-cutting measures, through curriculum changes and securing alternative sources of funding.

All this, explains Russell Gould, Chair of the Board of Regents, is necessary to avoid "limping along like this from budget cut to budget cut".

It is debatable whether the state's system of higher education will ever be able to bounce back from these cuts. As John Aubrey Douglass of the Center for Studies in Higher Education at UC Berkeley remarked: "It takes a long time to build these institutions, but they can be ripped apart very quickly and then it's really hard for them to recover."

While the national recession has had a huge impact on the situation in California, the state has itself to blame for its budgetary crisis. Apart from ambitious and unsustainable spending - while steadfastly refusing to raise taxes - the state has been struck hard by high unemployment and reduced personal income.

California's credit rating was recently ranked at the same level as that of Russia, which has an extremely low debt-to-GDP ratio.

Comment:
The information is interesting but I don't understand why your journalist feels the need to take sides with the authorities cutting into our education ("necessary", "must" etc). As we saw with the huge handouts to bankers, the money is there when the political will is present.

John Mullen

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