Paying for an Education: the University of California, Berkeley

The Campaign for Berkeley sent us alumni a marketing package in hope of obtaining donations.

Yearly tuition and expenses for in-state students living in campus housing is $32,634 (As opposed to the University of California schools, the average annual student budget is $19,700 for a California State University resident undergraduate [Source: Legislative Analyst's Office]).

About 70 percent of students receive financial aid. How could it be any other way, when the average family in California per capita income is around $43,000?

Compare this state of affairs to the cost of a University of California education for me, 1978 to 1982: around $4,000 including campus housing. I paid for my four-year Berkeley undergraduate education easily through savings, summer work, and $5,000 of loans. Why are finances so much more difficult today?

When I was an undergraduate, the state paid 52 percent of UC Berkeley's funding. Today the state pays 10 percent.  The Great Recession, starting in 2008, has crushed the California budget, especially a budget increasingly dependent on capital gains from the very rich. See below.

The Composition of Revenues Has Changed Over Time

• Over the past four decades, personal income tax revenues to the General Fund have increased dramatically—rising from 27 percent to 51 percent of General Fund revenues.
• This growth is due to growth in real incomes, the state’s progressive tax structure, and increased capital gains.
• The reduced share for the sales tax reflects in part the increase in spending on services, which generally are not taxed. Source: Legislative Analyst's Office (link here)

What to do? See my post (here) on whether California can continue on the same path, taxing itself out of austerity and, perhaps, into prosperity.