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SAN FRANCISCO — The budget outlook for the University of California is bleak, with cuts likely this year and next that may force officials to cap enrollment and increase student fees. 

Regents approved a 2002-3 state-funded operating budget of $3.65 billion Thursday, an 8.7 percent increase from last year, on the understanding that they could get less when Gov. Gray Davis brings out his proposed state budget in January. 

Davis already has proposed $86 million in cuts for the current fiscal year at UC. 

UC officials have identified a number of areas for making cuts, including: 

• Capping student enrollment growth. 

• Raising student fees. 

• Limiting faculty and staff raises. 

• Cutting programs that have had substantial increases. 

Most of those measures would prove controversial. 

UC historically has promised to find a place on one of its eight undergraduate campuses for all students who meet minimum eligibility requirements. Funding for an additional 7,100 students is needed to keep that promise in 2002, UC officials say. 

Student fees, meanwhile, have been level for the past seven years after jumping sharply during the recession-plagued early ’90s. After California’s economy picked up, the state began funding yearly increases. The increase for next year, on annual fees of about $3,800, would be between 8 percent and 10 percent. 

Regents also are proposing increasing nonresident tuition by 4 percent. 

Regents also approved raises of about 2 percent for about 145 senior managers, the same increase as previously given staff. The board also approved potential salary increases of up to 25 percent for some top managers, but put those raises on hold “considering economic conditions and budgetary constraints.” 

UC officials had defended the big raises as necessary to attract and keep top talent.