Thursday, January 10, 2002
University of California Office of the President
Governor's budget plan makes targeted cuts at UC but funds
keeps student fees level
Gov. Gray Davis released a 2002-03 state budget proposal today
(Jan. 10) that, while making targeted cuts at the University
of California to help address the state's budget shortfall,
would still fund an expected 7,100 new students, keep student
fees level, provide merit increases for faculty and staff,
and accelerate several facilities projects to spur economic
The budget plan expresses the governor's support for a series
of three education bond measures on the 2002, 2004 and 2006
ballots that would provide needed facilities funding for UC.
The budget proposal also would accelerate funding for the
UC-based California Institutes for Science and Innovation,
providing the final two years of funding in the current year
by using lease-revenue bonds.
The governor's budget was crafted amid an economic downturn
that has left the state with an estimated $12 billion budget
"We appreciate the governor's effort to maintain support
for higher education during such difficult economic times,"
said UC President Richard C. Atkinson. "This budget plan
would maintain access to UC for all qualified students, continue
the state's investment in university research as a catalyst
for economic growth, and allow us to provide a very modest
salary boost to our hard-working faculty and staff."
Under the governor's proposal, UC's state-funded budget would
total $3.4 billion in 2002-03, roughly the same as the original
budget for the 2001-02 fiscal year. The governor's plan would
make mid-year reductions totaling $41 million in the 2001-02
UC budget and then provide a $50 million increase for the
2002-03 fiscal year above the revised 2001-02 level.
While the budget proposal does not fully fund the Partnership
Agreement between UC and the Davis administration - an agreement
that sets out funding expectations for the state and performance
expectations for the university - the administration indicated
that it "expects to resume its commitment to the funding
elements of the Partnership once the state's fiscal situation
The governor proposed several mid-year cuts for 2001-02 that
would be made permanent, including $25 million of the $75
million the state provided to UC this year to cover increased
energy costs; $6 million of the $57 million provided for the
UC-led California Professional Development Institutes for
K-12 teachers; and $4.8 million of the $32 million provided
to UC to help expand K-12 schools' access to the next-generation
Internet2. In addition, the proposal calls for a reduction
of $5 million in one-time funds for clinical teaching support
for UC hospitals, neuropsychiatric institutes and dental clinics.
For the 2002-03 fiscal year that begins July 1, meanwhile,
the governor proposed funding for enrollment growth of 7,100
full-time-equivalent students, a 4.3 percent increase over
the budgeted amount for 2001-02. The budget also provides
funding to implement state-supported summer instruction at
UC Davis; the program is already in place at UC Berkeley,
UCLA and UC Santa Barbara as a means of accommodating student
The budget proposes that mandatory systemwide student fees
stay level, making 2002-03 the eighth consecutive year without
a systemwide fee increase at UC. However, unlike previous
budgets, the plan does not provide state funding to cover
the university's loss of the additional fee revenue it needs
to maintain support for existing programs.
The proposal would provide funding for an average merit increase
of approximately 1.5 percent for eligible faculty and staff;
final salary increases are subject to collective bargaining
requirements where applicable. UC did not, however, receive
funding it sought for an additional 2 percent increase for
faculty and staff and a further 2 percent increase for employees
in positions where compensation levels lag the market.
"Our faculty and staff are the heart of the university,
and competitive compensation for them remains a high priority
for UC," Atkinson said. "We will continue to seek
additional salary funds as the state's finances allow."
The governor's budget provides funds to cover a 6.7 percent
increase in the university's costs of providing health insurance
to its employees; UC had estimated that a 10 percent increase
would be necessary. The budget also provides $4 million for
faculty start-up funds at UC Merced, the new campus planned
for the San Joaquin Valley.
Budget cuts the governor proposed in 2002-03 to help balance
the state's budget include a $4 million reduction for the
California Subject Matter Projects, which provide professional
development for K-12 teachers; a $4.2 million reduction for
the university's outreach programs to K-12 schools; and a
$17 million elimination of "bonus" funding for financial
aid that the state had allowed UC to keep when student fees
were reduced in the late 1990s. (UC students still would receive
more than $500 million per year in scholarships, grants and
fellowships from all sources, however.)
The plan also does not provide increases the university had
sought, consistent with the Partnership, for improvements
in undergraduate education, building maintenance, instructional
technology and library materials.
The governor's budget does, however, contain good news for
the university's capital program. First, it proposes to accelerate
seven construction projects at UC as part of the governor's
statewide economic stimulus package. The projects, totaling
$279 million, are for programs in engineering, the sciences
and veterinary medicine at UC Davis, UC Irvine, UC Riverside,
UC San Diego, UC Santa Barbara and UC Santa Cruz; the package
also includes infrastructure development at UC Merced. The
projects have been approved by the Legislature and were expected
to be funded for construction in 2002-03; the governor's proposal
moves them up to the current 2001-02 year using lease-revenue
In addition, the governor's capital budget accelerates funding
for the four California Institutes for Science and Innovation,
which will be located at UC campuses and will pursue cutting-edge
scientific research in fields that are important to the future
of the California economy. The final increment of $218.5 million
in funding for the institutes was to be provided over the
next two years, but the governor proposes to provide it in
the current year - a move that would help address the state's
General Fund shortfall by shifting the financing for the institutes
from state General Funds to lease-revenue bonds that would
be paid off over time.
Also, the governor is proposing $82.6 million for UC's regular
capital improvement program, contingent on legislative and
voter passage of a new general-obligation bond measure, along
with $26.7 million in lease-revenue financing for construction
of a classroom and office building at the new UC Merced campus.
The governor's budget proposal next will be considered by
the Legislature. Final action on the state budget generally
occurs by early summer.
The budget documents are available on the Web at http://www.dof.ca.gov/.
Additional information on the UC budget can be found at http://www.ucop.edu/news/budget/.
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