Tuesday, April 19, 2011

The Business of UC: Higher Paying Clientele

The California Master Plan for Education guarantees that every academically-eligible California student will gain admittance to the prestigious University of California. At least it did. Due to existing cuts of $500 million, and with further cuts expected, UC has announced it will no longer admit every qualified California student.

In order to make more money, the UC regents have decided to turn away local students to make room for out-of-state and international students who are required to pay $23,000 more in tuition each year than state residents, the Los Angeles Times reported today. Last year, many state residents who were turned away from the UC campus of their choice were referred to the relatively new Merced campus, which is seen by many students as the least desirable of UC’s many campuses. Over 12,000 students were referred to Merced last year, according to the Bay Citizen. However, even Merced is now starting to fill up, which means that many eligible state residents will be denied entry into any of the UC’s campuses.

UC Berkeley, which is the second most desirable campus in the UC system after UCLA, saw its admissions of non-state residents increase from 13.6% in 2009, to 31.2% in 2011, wrote the Bay Citizen. The Los Angeles Times said that non-resident admissions at UCLA went up to 29.9% last year. However, state residents have additional problems, even if they are lucky enough to be admitted. In-state tuition is projected to double for undergraduates to $20,000 for the 2012-2013 school year, if taxes aren’t raised to close the state’s remaining $13 billion budget deficit.

There was a time when a quality higher education was both affordable and attainable in California. As recently as the 1980s, fees to attend UC Berkeley were as low as $500-600 per semester, while a student could find a room in a communal flat for less than $100 per month. In those days, it was entirely feasible for students to work their way through college and not depend on their parents or have to saddle themselves with tens of thousands of dollars of debt. What has changed is that tuition and fees for both the UC and CSU systems have increased much faster than tuition due mostly to cut backs by the state. These cutbacks have been justified as necessary to close the yearly budget deficit, a problem that seems to get worse each year.

State budget problems are typically portrayed as “natural” or unavoidable. However, they are almost always due to declining tax revenues that have resulted from changes in tax law. Consider the following statistics published yesterday in the OB Rag:

  • California’s richest residents currently only pay 7.8% of their incomes on state and local taxes.
  • In 1997, only 579 wealthy residents got away without paying any taxes. Today there are 2,431wealthy residents who are paying absolutely no state taxes.
  • Corporate taxes provided 12.4% of the General fund last year, down from 14.6% in 1980-1981.
  • Corporate tax cuts implemented in 2008 and again in 2009 are estimated to cost the state $2 billion in revenues.
  • The corporate tax rate is officially 8.84%, but is effectively only 4.7% due to loopholes.

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