The California State University Board of Trustees approved a 5 percent tuition hike Wednesday that would only be implemented if Gov. Jerry Brown's tax initiative is rejected by voters in November.
The board approved a "contingency" plan aimed at covering an anticipated $250 million hit to the 23-campus system's budget if Proposition 30 is defeated on Election day. (Click here to read the full text of Proposition 30.)
The plan includes a 5 percent increase in CSU tuition, which equates to another $150 per semester for in-state students for a total of $3,135. The increase would take effect in January.
Nonresident students would see a 7 percent increase in the tuition supplement fee they pay on top of regular tuition, effective in the fall of 2013. That equates to a roughly $810 per year increase, according to CSU.
The increases would only be implemented if Proposition 30 fails on the November ballot. The initiative would increase the state sales tax by a quarter- cent on the dollar for four years and raise the income tax by 1 percent for seven years for single-filers whose annual earnings are between $250,000-$300,000 and joint filers whose annual earnings are between $500,000-$600,000. Income tax would increase by up to 3 percent for the wealthiest Californians who exceed annual earnings of $500,000 as single filers or $1 million as joint filers.
The bulk of the tax increase would be earmarked for education, including public K-8 schools and community colleges.
If the initiative fails, it would trigger more state budget cuts, including $250 million for the CSU system.
The CSU tuition hike would raise about $58 million per semester, with the balance of the loss being covered by planned increases in employees' healthcare contributions, a series of system-wide cost-cutting measures and specific cuts at each of the campuses.
CSU Chancellor Charles Reed had also proposed three additional student fees, but the Board of Trustees' Finance Committee delayed any decision on them until November. Those fees were a $372 per unit fee for seniors who have already earned 150 semester units; a $100 per unit fee for students who are repeating a course; and a $200 per unit fee for any course load of 17 or more units. The fees were projected to raise $35 million a year.
Board member Bernadette Cheyne tried unsuccessfully to eliminate the planned increase in employee health-care contributions, saying the move could be devastating for some workers.
"Before we take a vote I believe we need to know what all of those implications are," she said.
Reed said immediate board action was essential on the issue, because it still needs to be negotiated with employee unions -- potentially a yearlong process.
"We can't continue to kick the can down the road," he said.
The board rejected Cheyne's effort and approved the healthcare proposal.
If Proposition 30 passes, CSU will not impose the 5 percent increase, and it will rescind a roughly 9 percent tuition hike that took effect this fall, although it would create a funding shortfall during the current year -- since the university wouldn't see any additional state funds until the 2013-14 academic year. --Toni McAllister contributed to this report.
