UCI, OCC feeling budget crunch

Without expected state money, OCC and UCI are deep in uncharted financial territory, and they have had to resort to funding schemes that may end up costing them in order to ride out the state’s budget delay.

Because of the record budget stalemate, both schools are operating without tens of millions of dollars in government funds, but they still need to pay their workers and give financial assistance to their students.

The Coast Community College District, which operates OCC and two other area schools, is quickly burning through money it has in its reserve, and soon it may have to resort to drawing cash from a $25-million line of credit it has negotiated with the county treasurer. This is the first time the district has had to resort to such measures as far as Administrative Director of Fiscal Affairs Kim Allen remembers.

“We still don’t have operating money. We had to take a large loan from the treasurer to keep afloat,” said Trustee Jim Moreno.

Taking money from the reserve means that the college district is not earning interest on that money. District financial officers have not crunched the exact numbers yet, but their roughly $20-million reserve, which they would ordinarily earn 3 to 4% interest on, will probably be depleted by the beginning of October when paychecks have to go out.

Some student financial aid has also been withheld by OCC. The college has not given out Cal Grants, which are state-funded financial aid awards given to low-income students. Financial Aid Supervisor Kathie Tran said most students haven’t felt a crunch yet because the majority also qualifies for federal aid that has already been distributed.

Overall, Allen said, the budget stalemate will definitely take money away from the school, but not a crippling amount.

“It will just hurt our budget a little more. It probably won’t be enough to materially affect our overall operation, but it’s another thing we have to deal with,” Allen said.

UCI is having similar problems, only amplified, according to Associate Vice Chancellor Rich Lynch. Instead of letting students go without Cal Grant funding, the university has fronted about $10 million out of its own pocket to pay for the grants.

Campus research labs, which constitute a big portion of the university’s budget, have been stopped in their tracks, and employees working on state-funded research have been shuffled around to other positions so the university can avoid laying them off.

Also, 50 to 60 new faculty members that the university hoped to hire for the semester were not given job offers just yet.

For UCI, it’s not just the delay that hurts, though. Even when a budget is in place, funding is slated to be cut across the board, meaning larger class sizes and less course offerings.

“We need to understand how the state is going to right the course here. I mean, we still have money, but going forward, there’s a lot of uncertainty,” Lynch said.

The university’s enrollment will probably grow by about 1,200 students this year, he added, and the state doesn’t plan to give the school any extra money to pay for their education. For this reason, UCI will most likely limit its growth next year, making it harder for students to get into the school.

ALAN BLANK may be reached at (714) 966-4623 or at [email protected].