California university leaders on Tuesday were warily watching a last-minute tuition freeze plan that would cost the schools -- and students -- dearly if voters reject November's state tax initiative.
Legislators were scheduled late Tuesday to debate giving $125 million each to the University of California and California State University systems in 2013 if they freeze tuition, which has risen sharply -- sometimes twice in one year -- since 2007. But the universities would lose that money if they raise tuition for the 2012-13 school year or if the tax initiative fails.
Wednesday is the deadline for signing the budget bills that include the tuition plan, which was part of a pact between legislators and Gov. Jerry Brown.
The schools have been complaining for years that they had to raise tuition because the Legislature was cutting their budgets. Now that the state is offering money, the schools have a new quandary: Do they freeze tuition and hope for voters to come through or raise tuition and say goodbye to the state money?
If voters reject the November tax initiative, the universities would lose the $125 million carrot the Legislature is dangling and each see their budgets cut by up to $250 million more. The cuts would likely lead to double-digit percentage tuition increases for the spring terms.
Passage is far from certain as a June 9 Field Poll showed 52 percent of those surveyed supporting the package, a state sales tax increase and a tax on the wealthy.
The 23-campus Cal State system has already raised fall term tuition more than 9 percent and has collected the money from thousands of students. The UC system is due to make a tuition decision in July.
The Legislature's plan would do little to help the Cal State system in any event. Its tuition hike would bring it $132 million next year, spokesman Mike Uhlenkamp said Tuesday, so the legislative proposal would not give the university enough to make up the difference. The tuition freeze would save Cal State students about $500 next year but could just delay new costs.
"We would have to find a way to come up with that money in the 2012-13 year," he said.
With Cal State officials already counting its tuition income for next year, the legislative proposal may be too much stick and too little carrot, said Steve Boilard, higher-education chief for the nonpartisan Legislative Analyst's Office.
"It seems to me CSU could say, 'You know what, we're not going to play,'" Boilard said. "In terms of the bottom line for CSU, there doesn't seem to be a benefit."
The governor is willing to work with Cal State to ease the university's concerns, said H.D. Palmer, a spokesman for Brown's Department of Finance, including how to return tuition already collected.
UC leaders will consider fee hikes of 6 percent or more at next month's Board of Regents meeting and they may be more amenable to the freeze deal.
The plan is identical to one UC proposed earlier this month. UC leaders are willing to borrow millions and cut their budget based on the promise of more funds next year, said Dianne Klein, a spokeswoman for the 10-campus UC system.
The tuition freeze "isn't a panacea," she said. "It's all a gamble."
"We're going to have to take some extraordinary steps to avoid raising tuition, but we're willing to take them," she said. "Raising tuition is the last thing we want to do."
Student leaders said they were tentatively optimistic about the freeze proposal. Prices have spiraled sharply upward at both universities the past five years.
The proposal puts the universities in "a weird situation," acknowledged Claudia Magana, president of the UC Student Association.
"We're well aware that this isn't a victory yet," she said. "But it seems like it's the only way to make it possible."
Matt Krupnick covers higher education. Contact him at 510-208-6488. Follow him at Twitter.com/MattKrupnick.
*UC has not yet approved tuition for 2012-13