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Vol.7, No 7, September 9, 1999 
[news]

CSU, UC budget sparks debate

By Shreya Bhakta
Daily Forty-Niner

The heads of California State University and University of California systems are waiting for a vote that may significantly impact how the systems spend money in the future. 
 
If Gov. Gray Davis signs the four-year budget compact, the systems will be guaranteed a 4 percent increase in funding. 
 
And a "no" vote may result in the two systems’ using a yearly budget.
 
Both systems agree that the budget compact has many benefits. However, the new compact proposal has been the subject of criticism by other state offices.
 
"There should be a better process of how to budget in a fair, effective way," said Craig Breedlove, spokesman for the Department of Education. 
 
For the 1999-2000 fiscal year, an estimated $2.3 billion will be coming from the state and $618 million from student fees.

"For every $1 a student puts in, the state taxpayer will put in $3.65," Breedlove said.

Unlike the CSU and UC systems, the Legislative Analyst Office wants funding on a yearly basis, like most state departments, Breedlove said. 

The office serves as a watchdog for the state Legislature to ensure the executive branch implements legislative policy in a cost-efficient and effective manner. 

The state should allocate money based on performance, he said.

"They should compete for the scarce resources provided by taxpayers money," Breedlove said.  

However, President Robert Maxson said the new compact proposal has many benefits. 

"The whole concept of the compact is a good idea because if you sign a contract for up to four years, you can do long-range planning," Maxson said. 

He supports the unification of the state and the CSU and UC systems working together on creating a new agreement. 

"It's different to do long-term planning between the government and UC and CSU - it’s a good thing," Maxson said.

The concept of a four-year compact is not a new thing.

Under former Gov. Pete Wilson, the CSU and UC systems were guaranteed a four-year funding agreement known as Compact I, which ensured the UC and CSU systems would receive minimum annual support budget increases and other funding increases.

After Wilson left office, negotiations began between the Davis administration and the two college systems for a new compact.
Both Compact I and II were four-year budget compacts, but the second asks for a 4 percent increase in the guaranteed minimum budget. Maxson said the new budget compact also translates into a 4 percent increase in enrollment. 

But a report released Aug. 26 by the Legislative Analyst states that the new compact is unlikely to offer additional or better accountability measures than the old compact.

The report also states that the guaranteed minimum budget increases would decrease incentives for the CSU and UC systems to improve program quality and cost-effectiveness. 

The secretary of education and director of finance are trying to negotiate a new funding agreement. 
 
No agreement has been reached on the compact proposal.

 
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