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California Business Schools Somewhat Buffered from State Budget Cuts

The University of California system is grappling with a $800 million budget cut, but its business schools have been less seriously impacted than some other areas because less of their funding comes from state coffers, the Financial Times reports.

Professional schools like UCLA’s Anderson School of Management and Berkeley’s Haas School of Business, because they cater to executives as well as students, draw a much smaller proportion of their funding from the state than do undergraduate schools, the FT reports. They also raise more through philanthropic donations and other revenue streams, the FT added.

“We are on a sound financial footing,” Haas Dean Richard Lyons told the FT, adding that the school’s range of MBA programs and its masters in financial engineering have helped cushion the effect of the budget cuts. “They have become very helpful revenue streams in a downturn,” he said.

Haas also has worked to increase philanthropic giving, though it still falls short of levels enjoyed by private universities, Lyons added.

UCLA Anderson, too, has worked to encourage greater philanthropic giving in an effort to reduce reliance on public funds, the FT reports. “We get about 20 per cent of our budget from the state. As long as the other 80 per cent is fairly robust, we will be less affected [by cuts],” Anderson Dean Judy Olian told the FT. Even so, Anderson was forced to raise tuition fees by 10 to 12 percent and cut some staff salaries in order to absorb the state budget cuts.

Though business schools, with their alternate revenue streams, are less impacted by the current budget crisis, Olian stresses that legislators can’t let education’s share of state revenue continue to shrink. “I think that is short-sighted. Higher education is the future of a knowledge-based economy,” she told the FT.

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