Talk about creative financing. The cash-strapped University of California plans to loan $200 million to the even more cash-strapped State of California so that—get this—the state can give the money back to UC.
Here's how we got to this crazy place: First, California's enormous budget deficit sent the state's credit rating into a death spiral and prompted massive cuts to a vast array of state-funded enterprises, including UC. The state cut UC's budget by $813 million, prompting the university to raise student fees, furlough faculty and enact a range of other painful cost-cutting measures. But as bad as things are for UC, the university has managed to maintain a better credit rating than the state. Which means it can borrow money at a low interest rate and loan it to the state at a somewhat higher rate.
The San Francisco Chronicle reports  that under a new agreement worked out between UC and the state treasurer, the state will give the money back to UC to fund infrastructure projects at eight UC campuses that have been on hold. These projects were approved by California voters and were supposed to be funded by the sale of state bonds—but they've been on hold because the state's poor credit rating has made state bonds all but impossible to sell.
The biggest beneficiary, the Chronicle reports, will be UC Santa Cruz, which will receive $64.4 million to construct a new biomedical sciences facility. UC campuses in San Francisco, Davis, Los Angeles, and San Diego will receive money to expand telemedicine services and medical training facilities. Campuses in Irvine and Riverside will get money for new science and engineering equipment.