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    Ass'y Budget Chair Oropeza's Higher-Ed Bombshell: Legislature's Deficit Merits Review Of UC/CSU Funding To Consider Alternatives Including Requiring Students To Repay State Over Their Working Lifetime

    We post transcript of Assemblymember Oropeza's floor statement; "Informational Hearings" begin in August

    (July 17, 2003) -- Raising the possibility of a drastic change in CA's decades-long policy of making the University of CA and CA State University accessible at reduced cost by using state general fund money, Assemblymember Jenny Oropeza (D, LB-Carson), chair of the Assembly Budget Committee, is urging consideration of alternatives that could include making UC and CSU students repay the state for their education over their working lifetime.

    Using the closing moments of today's Assembly floor session reserved for mundane announcements, Assemblywoman Oropeza delivered a short speech to praise and introduce plans by Assemblywoman Carol Liu (D., Pasadena) to hold informational hearings in August on restructuring higher education funding.

    Speaking from notes on cards -- unusual for the articulate former LB Councilmember known for her extemporaneous abilities -- Assemblymember Oropeza called a review of ways to get UC and CSU out of the state general fund an "out of the box approach." She said reexamination is needed now to help solve a long-term structural deficit of roughly $10 billion.Assemblywoman Oropeza, July 17/03
    Screen capture courtesy The California Channel

    CA is currently operating on borrowed money without a budget and faces a roughly $38 billion deficit reflecting state spending exceeding revenue. A budget bill carried by Oropeza and backed by majority Democrats includes raising taxes...which Republicans have blocked; Repubs have floated their own budget plan which Dems say cuts too deep; a 2/3 vote is required for passage.

    In the public interest, provides below a transcript of Assemblymember Oropeza's statement and salient portions of remarks by Assemblymember Liu on the Assembly floor.

    As described in a written release from her office, Assemblymember Oropeza indicates the changes could include higher-education vouchers, a "learn, earn and reimburse" approach and other means.

    For decades, UC and CSU students have paid tuition (recently raised) that is lower than private institutions through the use of state general fund money that effectively subsidizes the cost. For decades, leaders of both parties, as well as business leaders, have called CA's higher education system as an engine of the state's competitiveness, job creation and upward mobility.

    Assemblymembers Oropeza and Liu noted that restructuring of CA higher education funding had been considered in the past.

    [ comment: Proposals in the '60's and '90's weren't driven by a $30+ billion gap between state spending and revenue. The enormity of that deficit, incurred by the legislature, is unprecedented. Dealing with it by making UC and CSU graduates repay the costs of their higher education over their working lifetime is something nearly unimaginable only a few years ago.]

    Transcript below follows. It is unofficial, prepared by us.

    Assemblymember Oropeza: ...One idea worth considering would revamp the way that California pays for higher education in the UC and the CSU. It's an idea that was seriously considered in the '60's and then again in the '90's.

    It would provide that students pay for the full cost of college over their working lifetime, and would create universal accessibility. The impact on the state's budget would remove $6 billion from our state's budget permanently, from our general fund commitments.

    Frankly, I have no idea whether this is a workable idea, a workable solution, but I think we owe it to ourselves to fully vet the idea, to ask the right questions, consult with higher education and other experts and determine whether this is a structural reform worth considering for adoption.

    Colleagues, we know that the challenge, that we often challenge ourselves to take risks and that is essential to leadership. It's what brought us all here today. We know that protecting the future of our state and building its potential begins with ideas.

    I hope that this initiative that we announce today will spark ideas in other policy areas about what we deliver to Californians and how we pay for it.

    Out of the box thinking on structural reform is both our challenge and our duty, and I truly believe that we are up to this and I am excited about the possibilities...

    Assemblymember Liu: ...The budget proposals we are now considering for the current budget year, and probably for the next few years, will have a drastic and negative effect on our higher education institutions. These budget cuts significantly reduce our ability to educate a growing number of college students. We're facing a structural budget deficit as large as $10 billion for the foreseeable future.

    We all need to think about to close that deficit. It's time to begin examining alternatives -- perhaps drastic alternatives -- for restructuring California higher ed funding mechanism. Among the options we need to consider...are higher education vouchers...Learn, earn and reimburse is what Ms. Oropeza just talked about. In previous years, the California legislature has considered a learn, earn and reimburse approach to funding higher ed...Funding for degrees in Great Britain at universities are funded based on degree completions and higher tuition, higher financial aid models that east coast universities have is also part of the consideration.

    ...The Assembly Higher Education Committee, working with our colleagues in the Budget, will initiate informational hearings beginning the first week of August. Our objective is to examine our options for restructuring the funding mechanism for higher education, to reduce the dependence on general fund support.

    While our preference is to consider the existing shared funding approach, with taxpayers and students sharing the responsibility for funding our higher education, the current budget situation makes it clear that we must consider other options which drastically reduces the state support for our education system...

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