University of California

Mark Yudof, UC President

University of California President Mark Yudof on Monday proposed an 8 percent tuition fee increase to take effect next year.

“None of these decisions are easy,” Yudof said during a telephone conference with media. “The times for deferring hard decisions about the budget are long past.”

With a $1 billion budget hole, the university will recommend that the Board of Regents consider the $822-a-year fee hike as part of a budget package for the 2011-12 school year when they meet Nov. 16-18.

A month later, the regents will also be asked to approve pension reforms among other initiatives that would affect new employees hired after July 1, 2013. The package is intended to generate an additional $600 million to fund health and sciences initiatives, pension and retiree health care costs and escalating energy bills.

UC faces a $21 billion unfunded pension liability, exacerbated by the fact that faculty have not been required to contribute to the plan for roughly 20 years.

Employees hired after July 1, 2013 would receive less generous pensions. The retirement age would be raised from age 50 to 65. Current employees will see no change in their retirement benefits, but they will have to pay more.

“If this ship is going to sail straight," Yudof said, "we can’t defer tough decisions.”

More layoffs, enrollment reductions and other unsavory measures will be required if university regents reject the proposed fee increases, Yudof said.

Yudof said the UC system is among a slew of public universities raising tuition fees around the country. California State University, he said, plans to impose a 10 percent fee increase next year.

Families earning $80,000 or less a year won’t have to pay tuition for the 2011-12 school year, Yudof said.

“Despite the rising fees, two-thirds of all California families won’t have to pay a penny if their sons and daughters are accepted to the University of California,” Yudof said.

The fee increases will not apply in the 2011-12 school year to families earning $80,000 to $120,000 annually, Yudof said.

All told, the fee increases would apply to roughly 45 percent of students, Yudof said.