Local governments and California's public colleges and universities may have been resigned to the impending cuts after the state Legislature late Tuesday approved an $86 billion budget. By Wednesday morning, however, the reductions seemed increasingly hard to swallow.

UC and CSU officials warned of possible tuition hikes, layoffs and fewer admissions. They also said they must now prepare for more slashing halfway through the academic year. The additional cuts would be "triggered" if revenues don't meet optimistic projections -- a possibility that left educators feeling anxious.

Likewise, supporters of the state's nearly 400 active redevelopment agencies -- who for months had fought to mend rather than end the 66-year-old urban revitalization program -- said their likely elimination will harm the state's economy.

Advocates for the agencies again vowed to take their case to the state Supreme Court, arguing that the Legislature's decision to grab $1.7 billion of the agencies' funds is unconstitutional because voters in November passed Proposition 22, which was designed to prevent Sacramento's raid of local tax revenue.

"I think our chances are pretty good," San Jose Mayor Chuck Reed said of pending litigation that may involve the city's struggling agency. "But it doesn't matter what I think. It's what some judge thinks."

The UC and CSU systems will each absorb a $150 million cut, in addition to $500 million in reductions made to each system in March. On top of that, both face up to $100 million in cuts in early 2012.


"I'm disappointed," UC Santa Cruz Chancellor George Blumenthal said. His campus has already trimmed $31 million from next year's budget. And after five years of decreased funding, he said, "the last cuts are the hardest."

Redevelopment agencies could continue to survive if they "pay to play'' and agree to divert a certain amount of their property tax revenue to schools, fire protection districts and transit districts.

For fiscal year 2011-12, which starts Friday, each agency would have to pay its portion of the $1.7 billion and, starting in 2012-13, its part of $400 million annually.

By Wednesday, the California Redevelopment Association said about 50 agencies so far -- including San Jose's -- have indicated they cannot make those payments.

The San Jose Redevelopment Agency would have to pony up from $47 million to $52 million next year -- and about $11 million to $13 million each year after that.

"We don't have that much money laying around," Reed said.

The 23-campus CSU system will lose nearly a quarter of state support for its operating budget. To cope with the reductions made Tuesday, the universities could be looking at tuition increases, furloughs, layoffs and other system-wide remedies, said San Jose State spokeswoman Pat Lopes Harris.

Community college budgets will decline $400 million and also could face more cuts early next year. For the San Jose-Evergreen Community College District, that translates to $5.6 million out of a $78 million operating budget, Chancellor Rita Cepeda said.

The uncertainty about the possible mid-fiscal-year cuts, she said, "is frustrating. And it's irresponsible."
The Legislature's budget largely spared K-12 education by keeping funding flat. But if more cuts are triggered early next year, schools could be left on the hook for $1.7 billion, or $283 per student.

If that's the case, the state could give districts permission to lop off up to seven days of instruction. Still in question is whether each of California's approximately 1,000 school districts would have to negotiate those cuts with employee unions.

On top of the five-day reduction that the state already permits, trimming even seven days could give California the shortest school year in the nation.

In addition, the state is balancing its budget by issuing nearly $3 billion in IOUs in lieu of payments to school districts. California has already put off more than $7 billion owed to the districts.

"It just means we will have to borrow more money," said Superintendent John Porter of San Jose's Franklin-McKinley School District. Its board already has authorized borrowing up to $15 million because of late state payments, costing the district thousands of dollars in interest, Deputy Superintendent Tim McClary said.

San Jose Unified has already anticipated the mid-year cut in its 2011-12 budget, CBO Ann Jones said. If the "trigger" cuts happen, the district most likely would reduce teaching days in the 2012-13 year.

The possible end of many redevelopment agencies will also greatly impact affordable housing programs, which have depended on 20 percent of the property taxes each agency collects.

San Jose Housing Director Leslye Corsiglia said despite the bad news, her department will do its best to carry on with other federal, state and local funds.

Even before Brown proposed in January to abolish the agencies, the San Jose Redevelopment Agency was already fighting for its life because of the steep drop in property values and tax revenues, as well as its massive debt.

The agency this month laid off all but eight of its remaining 31 employees.

At its zenith in fiscal year 2002-03, the agency employed 134 people. And as recently as the summer of 2009, that number was 119.