California Colleges Plow Ahead With Construction

Monday, March 19, 2012

California has slashed public university budgets, yet construction is booming at campuses statewide. The University of California system has $8.9 billion in building projects under way at its 10 campuses and five medical centers, including about $200 million at UC Merced.

With less money to operate the new buildings once they're finished, universities are straining maintenance and energy budgets. At least one new UC campus building is sitting empty because the university can't afford to run it.

University officials say all this construction was in the pipeline before the 2008 economic downturn squeezed state spending for higher education. Some is being paid for by part of a $10.4 billion bond voters approved in 2006, from which more than $3 billion went to public higher education.

Some is being underwritten by private donations, government research grants and student fees. About $1 billion came from bonds issued in 2009 under the federal stimulus program — which the universities will have to repay — and $325 million in bonds the UC system issued that year on its own.

More importantly, these officials say, the money for construction is kept in strictly separate capital, not operating, accounts. It can't be used for expenses such as salaries or enrollment.

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