How the budget works

The University of California’s projected operating revenue for 2011-12 is $22.5 billion to support its teaching, research and public service missions.

That includes not just academic programs but also UC’s teaching hospitals where future doctors and health professionals are trained, the Lawrence Berkeley National Laboratory where critical energy and national defense research is conducted and University Extension where thousands of Californians enroll in career development and enrichment courses.

A number of funding sources contribute to the annual budget; 73 percent of UC’s revenue is restricted by the funding source. UC cannot legally transfer funds from restricted sources, such as federal research grants, and use the money to make up for cuts in state funding.

73 percent of UC’s annual total budget is restricted by the revenue source and can’t be used for any other purposes. The restricted revenue includes:

2011-12 medical centers: $5.987 billion, 27 percent

2011-12 sales, services and auxiliaries funds*: $4.312 billion, 19 percent

2011-12  government contracts & grants: $3.972 billion, 18 percent

2011-12 private support: $1.675 billion, 7 percent

2011-12 other sources: $409 million, 2 percent

* Sales, services and auxiliaries funds include revenue from clinics, museums, theaters, UC Extension and other activities.

27 percent of UC’s total annual budget, $6.1 billion, is unrestricted and supports core operations. Those funds include:

2011-12 State General Funds: $2.374 billion, 11 percent of total budget, 39 percent of core operation funds

2011-12 Student Fees: $2.965 billion, 13 percent of total budget, 48 percent of core operation funds

2011-12 UC General Funds: $792 million, 4 percent of total revenue, 13 percent of core operation funds

*UC general funds include revenue from nonresident tuition, portions of the overhead on federal and state contracts and grants, Department of Energy lab management fees and overhead, a portion of the patent royalties earned on UC inventions, application and other fees and interest earnings.

This is how UC spends the core funds:

Each year UC presents the state with a funding request. The governor presents a state budget in January that includes funding for UC, California State University and California Community Colleges.

The state budget typically undergoes revisions for several months before the Legislature approves it and the governor signs it. The budget is supposed to be finalized by the end of the fiscal year in June, but it is often delayed as lawmakers debate the level of allocations for various programs and agencies.

State funding for UC fluctuates from year to year and is closely tied to the ups and downs of the state’s economy.

UC’s share of the state budget has declined dramatically over the last decades. In 1980-81, UC received 5.09 percent of the state’s general funds.  In 2011-12, UC’s share dropped to 2.76 percent.

As state support has declined, the student share of their education costs has grown. Since 1990, the state’s contribution to educating each UC student has dropped more than 50 percent.

In 1990, the state funded 78 percent of the total cost of education per student. Today, the state funds 39 percent. As state support has declined, the students’ share of their education costs, net of financial aid, has more than tripled, from 13 percent to 49 percent.

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