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Issue 7 — April 2003

November: Regents adopt UC budget request for the coming year and send it to the state for consideration

December: Special legislative session on the budget begins

January: Governor introduces state budget proposal for 2003-04

Spring: Legislature holds hearings on the budget; each house develops a budget proposal of its own

May: State revenues are updated and governor issues the "May Revision" to his original budget proposal

Mid-June: Legislature sends final budget to governor for action

Late June: Governor signs budget

July 1: New fiscal year begins

Mid-July: Regents update original UC budget request to conform to final budget adopted by the state

Dear UC Colleague:
This is another of our periodic updates on the California State budget. As I have reported in my previous messages to you, the State is continuing to seek ways to close a budget gap estimated as high as $35 billion, and substantial cuts have been proposed in most areas of State spending.

Legislative hearings on the 2003-04 budget proposed last January by Governor Davis are now occurring in Sacramento. The next milestone in the process is the May Revision, in which the Governor updates revenue estimates and expenditure proposals for the coming year. A final budget is not expected until this summer.

We are making a strong case in Sacramento for the University’s needs, highlighting the tremendous impact our faculty, staff, students, and alumni have on the State of California. We continue to emphasize the importance of quality in the University’s instructional program and access to ensure that UC-eligible students are not turned away. We also continue to stress the importance of competitive compensation for UC faculty and staff, and you will read below about some of the ongoing challenges we are facing in this area.

In addition, we are exploring various options for saving money across the UC system. In that context, we are considering a new program – Staff and Academic Reduction in Time, or START – that would allow employees to reduce their working hours on a voluntary basis. This program would help the University achieve temporary salary savings during the budget crunch, and it would provide some flexibility in working hours for many employees seeking it. Further details about the proposal are provided below.

I will continue to be in touch as budget developments occur. In the meantime, thank you again for your service to the University and to the people of California.

  Fiat Lux,

 Richard C. Atkinson

Work continues on 2003-04 state budget

Legislative hearings are underway on the Governor’s 2003-04 budget proposal, which contains a variety of cuts to programs at the University of California. Details about the Governor’s proposal can be found here.

UC Regents heard an update on the state budget on April 3, and they will continue to discuss the budget at their May meeting. More information will become available in mid-May, when the Governor will issue the “May Revision” updating revenue forecasts and expenditure proposals.

State funding for UC salaries: While maintaining competitive compensation for faculty and staff remains a high budget priority for UC, our ability to achieve this goal has been significantly hampered by the current state budget deficit. As has been previously announced, the Governor’s current budget proposal provides no state funds for UC salary increases.

At this month’s Board of Regents meeting, Vice President for Budget Larry Hershman said the University still hopes to find ways of addressing this issue in 2003-04. He said the University believes it needs to continue funding faculty merit increases, as well as to identify some way to financially recognize staff employees, particularly lower-paid staff.

Hershman said systemwide faculty salaries are expected to lag UC’s comparison institutions by approximately 9 percent next year, and that this continued erosion of competitive faculty compensation is putting real pressure on the University’s recruitment and retention efforts. He also noted that faculty undergo extensive peer reviews every three years to determine merit and promotion status, and that a serious inequity would occur for the one-third of the faculty scheduled for review in a given year if faculty merit increases were not paid in that year. On the staff side, Hershman indicated that several employee groups also lag the market. He stated that one way the University could help staff employees – especially UC’s lower-paid employees – would be to again help defray for employees a portion of the rising cost of health insurance. More information about these issues will become available as the budget process progresses.

Hershman reassured the Board that University leaders will continue to emphasize with legislators the critical importance of adequate state funding for UC salaries in order to maintain institutional quality.

Student fees: At their May meeting, the UC Regents are expected to set student fee levels for fall 2003. The Governor’s budget assumes that mandatory systemwide fees will rise $795 per year for resident undergraduates, in addition to the $405 annual increase taking effect in the spring 2003 term. There would be similar increases for graduate and professional students. These increases would replace state funding being cut from the student instructional program at UC. Financial aid would increase to protect low-income students from the fee hike, and UC is looking at options for increasing financial aid to some middle-income families, too. More information on student fees is available here.

Mid-year budget cuts: Meanwhile, most of the 2002-03 mid-year budget cuts proposed by Gov. Davis for the UC system have been approved by the Legislature. All $74 million in proposed cuts, described here, were approved, with one exception: a $3.3 million proposed reduction to educational outreach.

Voluntary reduction-in-time program proposed

In an effort to relieve some of the financial pressure the current state budget deficit is exerting on the University, UC is considering for implementation this June a temporary, voluntary reduction-in-time program called the Staff and Academic Reduction in Time (START) program.

Since individual campuses and departments are being impacted differently by the current budget challenges, participation in START will be determined at the departmental level according to budgetary and operational needs.

With supervisor approval, the proposed program would allow employees the opportunity to reduce the amount of time they work between 10 and 50 percent of their full time.* Employees would be able to enroll in the program beginning May 1, and actual time reductions could begin as early as June 1. At the conclusion of any period of reduced time under START, participants will return to the percentage of time they were working prior to the program. Departmental participation may begin at any time after May 1, and the program will continue through June 30, 2005.

In return for a voluntary reduction in time, program participants will:

  • Accrue, on a month by month basis, vacation and sick leave credits at the rate accrued prior to the commencement of START;
  • Accrue, on a month by month basis, UCRP service credit at the rate accrued prior to commencement of the program (provided that the employee is on pay status for at least 50 percent of full time during each month of participation);
  • Earn UCRP pension, death, and/or disability income based on their pre-START salary; and
  • Be protected from any mandatory salary reduction plan during their participation in START, should such a plan become necessary.

As is UC custom, the START proposal is currently undergoing formal institutional review. Complete details and information on how you may comment on the proposed program are available through your local Human Resources office.

*The University is working with unions regarding represented employees' participation in START.

Questions and Answers

Q&A archive: Browse recent questions and answers on UC employee issues.

Q. How can the University continue to advertise for job openings in the midst of a hiring freeze, not to mention layoffs in certain areas?
Consistent with Executive Orders from the Governor, the University has instituted systemwide hiring restrictions. While the University expects to achieve budget savings by not filling vacant positions and from other actions such as the START program, layoffs in some specific program areas are unavoidable given the depth of budget cuts targeted for those areas.

In keeping with the Governor’s intent for hiring restrictions, the University has excluded positions that are needed to meet the University’s educational mission and to provide certain specialized skills. Accordingly, campuses have the discretion to recruit for select individual positions as they deem necessary and as their personnel budgets allow.

Q. What kinds of raises are top administrators receiving this year?
For the current 2002-03 year, all senior administrators, including the president and chancellors, received the same 1.5 percent general salary increase that other staff employees received. At present, the Governor’s 2003-04 budget provides no funding for salary increases for administrative employees, including top administrators.

Q. I understand that some employees get paid from state funds while others get paid from other types of funds, such as research grants. Even though there may not be state funds for salary increases, will employees not paid out of state funds still get a salary increase?
Historically, and as a general rule, UC does not differentiate among fund sources in setting staff salaries. This helps promote fairness across the UC system by ensuring that employees doing the same work receive the same general salary increase regardless of fund source.

Q. What can I do to help?
Currently, the state Legislature is evaluating the Governor’s proposed 2003-04 state-funded budget for the University. One of the things you can do is to write your legislator, stressing the importance of continued strong state investment in UC by sharing your personal experience of how specific programs or services to students or the public are being or may be impacted by budget cuts. You may obtain the mailing or email address of your legislator from the following web site:

Got a budget question? Use this form to submit it. Due to the volume of submissions, we can't provide an individual answer to every question — but the feedback is important, and we will do our best to answer some frequently asked questions in our next edition.