2 May 2002
Regents adopt UC budget request for the coming year and send
it to the state for consideration
Governor introduces state budget proposal
Legislature holds hearings on the budget; each house develops
a budget proposal of its own
State revenues are updated and governor issues the "May
Revision" to his original budget proposal
Legislature sends final budget to governor for action
June: Governor signs budget
1: New fiscal year begins
Regents update original UC budget request to conform to final
budget adopted by the state
1: Traditional date for most salary increases to take effect
second issue of our systemwide budget update for faculty and
staff is devoted to the May Revision, the annual event in
which the governor proposes a revised State budget for the
coming year based on new revenue estimates.
the story this year is not a very happy one. Facing a major
State budget shortfall, the governor has proposed cuts to
a wide range of State programs, including programs at the
University of California. The proposed cuts at UC are distressing
because they affect valuable programs that provide important
services to the people of California. In many cases, UC faculty
and staff have spent the last several years building these
the same time, we recognize that the State is facing an extremely
difficult situation trying to fill a budget gap representing
more than one-fourth of the entire State budget. We know that
the University must participate in the solution in some way.
And in that context, we must acknowledge that the governor
has avoided across-the-board cuts, protected our core instructional
program, funded our basic student enrollments, and preserved
funds for a modest salary increase for faculty and staff.
discussions have now moved to the Legislature, where we expect
much continuing debate over the issues raised in the governor's
May Revision. We will be participating in those discussions
to make the best possible case for the University's needs.
While there are no easy choices for anyone participating in
the budget process, we will continue to emphasize the many
benefits the state realizes from a strong investment in the
hope you find the following update useful and informative.
Revised Budget Proposes Targeted Cuts at UC
Davis' May Revision to his 2002-03 budget proposal calls for broad reductions
in state spending to address a shortfall of almost $24 billion in the
state of California's nearly $80 billion General Fund budget.
office attributed the shortfall to "a combination of the national
economic recession, a sluggish stock market, the economic aftershocks
of the September 11 terrorist attack, and the collapse of the dot-com
economy in California." Much of the drop in state revenue is specifically
the result of a fall-off in capital gains and stock options, the governor's
Revision proposed a variety of solutions for closing the gap, including
$7.5 billion in spending reductions affecting numerous state programs.
budget proposes substantial cuts at the University of California. However:
- It avoids
across-the-board cuts and reductions in the core instructional program.
- And it
maintains the governor's original proposal of funding for an average
merit increase of approximately 1.5 percent for eligible faculty and
staff, subject to applicable collective bargaining requirements.
Assembly and Senate are now reviewing the May Revision and making their
own proposals for budget adjustments. Further changes to the university's
budget are possible and even likely. A final budget traditionally is approved
by both houses and signed by the governor by early summer.
Revision includes the following changes to the governor's January budget
- A $5.4
million augmentation allowing UC to enroll 600 more students than assumed
in the governor's January budget, resulting in total enrollment growth
of 7,700 students next year. UC, seeking to maintain its commitments
under the Master Plan for Higher Education, requested the additional
funding after seeing high application volumes for fall 2002.
- A $2.8
million augmentation for the rising cost of annuitant health benefits.
- A $32
million, or 10 percent, cut in state funding for UC research programs.
The governor's proposal would give the university the authority to reduce
spending on individual state-funded research initiatives by between
6 percent and 30 percent.
- A $28.4
million cut in state funding for K-12 outreach. This reduction, when
coupled with a $4.2 million outreach cut proposed in January, would
result in a 40 percent reduction in state funding for UC outreach programs
in 2002-03. The May proposal includes:
Elimination of state funding for the School-University Partnerships
program ($12 million);
of state funding for the UC College Prep Initiative, which offers
online access to Advanced Placement courses ($8.4 million);
$4.7 million cut to graduate and professional school outreach, in
addition to a $500,000 cut proposed in January;
of state funding for the ArtsBridge outreach program ($750,000 in
addition to a $750,000 cut proposed in January);
of state funding for UC ACCORD, an outreach-related research program
($500,000 in addition to a $300,000 cut proposed in January); and
of $1.9 million in special augmentation funding for outreach efforts
specifically targeted at the Central Valley, though other outreach
programs in the region would continue.
- An $11.3
million reduction for the California Subject Matter Projects, which
provide professional development for K-12 teachers. The reduction is
in addition to a $4 million reduction proposed in January and would
leave the program with $20 million in funding. On a related matter,
the governor proposes to remove $50.9 million in state funding for the
California Professional Development Institutes for K-12 teachers, believing
that an equivalent or greater amount of federal and state funding in
the K-12 budget is available for teacher professional development activities.
- A one-time
cut of $29 million from the university's $150 million budget for equipment,
library materials, deferred maintenance, and instructional technology.
The governor's proposal indicated that this funding would be restored
in the 2003-04 fiscal year.
- A $5.2
million reduction in funding provided to UC to help expand K-12 schools'
access to the next-generation Internet2. The reduction, on top of a
$4.8 million reduction earlier this year, would leave $22 million for
some other technical changes, the May Revision proposes a net reduction
of $162 million in the University of California's budget. The university's
state-funded operating budget would total $3.2 billion in 2002-03.
a series of proposed cuts in the state's Medi-Cal program
co-payment increases, provider rate reductions, and cuts in reimbursements
to hospitals serving a disproportionate share of low-income patients,
among other things
expected to have a significant fiscal effect on UC medical centers.
May Revision is available online at www.dof.ca.gov.
of Other News
benefits extended: The UC Board of Regents has approved retirement
benefits for UC employees with domestic partners, mirroring the retirement
benefits currently offered to married UC employees. Qualified domestic
partners of UC employees who are members of the UC Retirement Plan (UCRP)
will now be able to receive pre-retirement or post-retirement survivor
income if the UCRP member dies. For more information, see http://www.ucop.edu/news/archives/2002/may16art2.htm.
approved for facilities: Gov. Davis and the Legislature have placed
bond measures for education facilities on the ballot in both 2002 and
2004. If approved, the bonds would provide UC with funding for a range
of building projects at all campuses
seismic-retrofit projects; new construction to accommodate growing numbers
of UC students, faculty and staff; and improvements to aging infrastructure.
The governor and Legislature also have approved the final increment
of state capital funding for the four UC-based California Institutes
for Science and Innovation, which are pursuing scientific research in
fields critical to the future of the California economy. For more on
the bonds, visit http://www.ucop.edu/news/archives/2002/may16art3.htm.
And for more on the Institutes, see http://www.ucop.edu/news/archives/2002/may7art1.html.
Q. Will the new state budget result in
layoffs at UC?
A. It does not appear there
will be layoffs on an across-the-board basis. Because certain programs
have been targeted for fairly deep cuts in the May Revision, however,
it is possible that layoffs will occur in some of those individual
programs. The university will make every effort to achieve budget
reductions without layoffs, but they cannot be ruled out in those
programs identified for major budget reductions. At this point,
nothing is final
budget-cutting proposals that have been made are still under discussion
Why isn't a student fee increase being considered?
A. Gov. Davis has consistently opposed a student fee
increase for next year. For its part, UC is urging the state's leaders
in government and higher education to develop a new, long-term policy
that would guide the setting of student fees. Such a policy would
bring more predictability to the process and allow students, parents,
the university, and the state to budget their resources with less
uncertainty from year to year. Discussions of such a policy are
in their very early stages.
Why isn't UC making better use of facilities in the summer to help
close the budget gap?
A. Actually, we are. With state support, UC campuses
have expanded their summer instructional offerings, and summer student
fees have now been reduced to the equivalent of the rest of the
year as a means of encouraging more students to attend. Many UC
buildings also are used in the summer for conferences, camps, and
other revenue-generating activities.
a question? Send it to email@example.com.
Your submissions will be the source of the questions and answers
appearing in the next edition of this newsletter.
MORE INFORMATION ON:
UC AND THE ENRON SITUATION
UPDATES ON UNION NEGOTIATIONS
NEWS ON OTHER UC SYSTEMWIDE ISSUES