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After two years of severe budget cuts for UC, Gov. Schwarzenegger today (Jan. 8) unveiled a 2010-11 spending plan that includes $371 million in additional money for UC plus funding for Cal Grants.

This is just the beginning of the budget process, which typically takes months. But, if the Legislature and the governor come to agreement on the extra money, UC Davis can expect to shave up to $40 million off its estimated shortfall of $77 million in 2010-11, according to Associate Vice Chancellor Kelly Ratliff, the campus's chief budget officer.

This good news comes on top of the governor's proposal earlier this week for a to guarantee that UC and the California State University system would receive a set percentage of the state general fund, by shifting money from prisons.

UC President Mark G. Yudof responded with a and a .

He said the governor's proposals "are clear evidence that he understands the vital role public higher education plays in California."

“While we deeply appreciate the governor's actions, notwithstanding the crisis in the state budget, there is still a significant gapas we seek to repair a budget that has been severely cut."

UC had asked the governor for an additional $913 million for 2010-11. Now that Schwarzenegger’s budget draft is on the table, Yudof said, UC will go to legislators to ask them to approve the governor’s plan and to look for opportunities to give UC everything it asked for.

“This money is vital if UC is to avoid declining educational quality, access and research,” Yudof said.

UC has racked up a budget shortfall of nearly $1 billion over the last two years, necessitating higher fees as well as cutbacks in academic and student services; layoffs and furloughs; and a severe slowdown in faculty recruitment.

Schwarzenegger sent his budget draft to the Legislature for its review and possible revisions, and, amid this process the governor usually delivers his own revision—typically in May—based on more up-to-date financial data.

Here are some specifics from the governor’s first draft, as it relates to UC:

• Restored funding—$305 million that the state held back from UC in 2009-10. The money is needed to restore instructional offerings and student services, like class sections and library hours.

• ���԰��DZ�������Գ�—UC had made asked for an additional $155.8 million for unfunded enrollment growth. The governor's budget includes $51.3 million to fund enrollment. That amount would serve 5,121 full-time equivalent students.

This allocation is tied to California’s request for $8 billion in economic stimulus money from the federal government—so, no stimulus money from the feds will mean no enrollment money for UC.

• Retiree benefits—$14.1 million for retiree health benefits. The governor did not allocate the $95.7 million that UC sought for employer contributions to the UC Retirement Plan.

• Capital projects—No funding is proposed for a November bond measure that would have filled UC’s request for $631.5 million for facilities projects. However, the governor's spending document indicates that his May revision may include an alternative funding proposal.

• Cal Grants—Under the governor’s proposal, eligible low-income students would receive enough money to cover UC’s 2009-10 midyear and 2010-11 fee increases, as approved by the Board of Regents in November.

Schwarzenegger last year put Cal Grants on the chopping block, and the Legislature saved them. The grants help stabilize UC’s Blue and Gold Opportunity Plan, which ensures that aid is available to pay the systemwide fees of all needy California resident undergraduates with family incomes of less than $70,000 a year.

Dateline Associate Editor Dave Jones and UCOP Managing Editor Donna Hemmila contributed to this report.

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