San Francisco’s ominous fog has been replaced by a cloud of financial woe this week, as the University of California Regents tackle the fiscal problems facing the institution at their annual meeting on the UCSF Mission Bay campus.

The three-day meeting, which concludes tomorrow, is scheduled to address a number of grim issues, chief among them: student fee increases and the unstable status of the 2009-10 budget. Although the regents will not vote on the proposed tuition hike until next year, the $662 per student fee increase for resident undergraduates is already proving to be controversial with student advocate groups.

“We’re definitely worried about proposed increases,” UC Student Association President Lucero Chavez said. “The regents have been raising our fees ever year, but we haven’t seen increases in student mental health [counseling] or other services.”

The UC Office of the President says it needs to raise student fees to deal with the ever-growing number of enrolled students. Next year, the UC expects a 2.5 percent growth in enrollment, and already plans to accept 10,000 students that it has no funds for, according to figures provided by UCOP.

To provide for the new enrollees, the UC’s budget proposal for 2009-10 includes a 9.4 percent fee increase to student fees. The fee increase is just under the maximum 10 percent allowable under a 2004 agreement signed between Gov. Arnold Schwarzenegger and the UC-system.

The last two school years saw fee increases of roughly 7 percent, making the proposed raise for 2009-10 the highest since the California Legislature temporarily halted the fee hikes during the 2006-07 school year.

To protect against large fee hikes, the UC sets aside one-third of all revenue from any fee increase for financial aid programs, including Cal Grants and other forms of assistance, according to the Office of the President. Without additional state funds, UC spokesman Ricardo Vázquez said the system may not be able to admit students into their preferred campuses.

“If the state is unable to support our request, we’ll take steps to bring enrollment levels to match state funds,” Vázquez said. “Fewer students will be admitted to campus of their choice and more would sent to other campuses. This isn’t a major departure from our master plan, but its possible that [some] students will look for education elsewhere.”

According to estimates by the Office of the Legislative Analyst, a state budget deficit that could reach $28 billion by 2010 would make full funding for the UC-system extremely difficult. To make matters worse, on Nov. 6, Schwarzenegger introduced mid-year budget cuts that removed $65.5 million of state funding from the UC.

The UC is not the only public school system in the state that is affected by the budget deficit. On Monday, California State University Chancellor Charles B. Reed announced plans to cut enrollment by 10,000 students, citing funding deficits for both incoming students and current enrollees.