Your second reference also points out UCSC's operating budget for 2016 is $722 million. Revenue and expenditures have likely increased 4 years later, but the $13 mil represents a 1.8% increase in operational cost. The UCSC administration would have to cut other programs' budgets in order to make the difference.
I'm an UCSC alumnus, and I served as a student rep on UCSC's Academic Senate's Committee on Planning and Budget (CPB). I've sided with the graduate students in this case. If you follow the subreddit r/UCSC, you will see the student body is largely divided on the issue. Now, subreddit posts are a small sample of the student body, it does affect the perception as well as the notoriety of UCSC being a liberal school full of hippies that always fight for worker's rights. It is harder to rebuild that kind of reputation in the school's brand. And it also negatively affects alumni fundraising.
It puts the UCSC administration between a rock and a hard place. I've worked with the administration in the past. They are intelligent and caring faculty members trying to walk a tight rope every year with UCOP/Regents increasingly demanding in delivering in business objectives (increase enrollment/revenue) on one side and their academic mission on the other. I do not envy them.
UCOP miscalculated this entire affair. UCSC grads going on strike has also encouraged UC Berkeley's and Davis's grads to strike in solidarity. The administration has never been able to handle student protests with the best optics, and unfortunately, student protests historically do not succeed in getting their demands met. It is.. a teachable moment, well steeped in irony.