The UC is going to borrow $200 million for the state after the state took away $100 million dollars from the UC over winter break.  The state still owes the UC $1.7 billion dollars from previous loans. 
The California government is fiscally self-destructive: it is designed to be unable to fund itself. Proposition 13 requires a two-thirds vote to raise taxes, but allows a simple 50 percent majority to lower taxes and introduce loopholes.  Proposition 13 caps the tax-rate on corporate property at 1%, the revenues from which are allocated by the state government rather than local municipal governing bodies. 
UC spokesperson Dianne Klein: “The university is in a better position (than the state) to do that [borrow money], frankly because we have a better credit rating. The university is able to secure a better interest rate for that money”  In 2011, Fitch rating agency cited “Continued tuition and fee setting flexibility” as a key factor for the UC’s strong AA+ credit rating. 
THE UC IS NOW BORROWING MONEY, IN PART BECAUSE IT IS BETTER ABLE TO TAX STUDENTS THAN THE STATE CAN TAX CITIZENS AND CORPORATIONS.
WE SHOULD NOT PAY FOR A DISFUNCTIONAL STATE. WE SHOULD DEMAND AN END TO PROP 13s VOTING REQUIREMENTS.
 Shrag, Peter. Paradise Lost: California’s Experience, America’s Future. London: University of California Press, 1999. p. 156