UC president describes stark consequences of proposed budget cuts

Testifying before the state’s Joint Legislative Conference Committee on Budget, UC President Mark Yudof today (June 1) described the devastating consequences of the proposed state budget cuts for the university, its students and the services it provides to the state.

Yudof said the reduction in the state’s General Fund commitment, which totals almost $800 million for the 2008-09 and 2009-10 fiscal years, would place in jeopardy its historic commitment to provide access to all eligible high school graduates and would force UC to rely more heavily on higher student fees.

“We recognize the need to be part of the solution to solve the state’s fiscal crisis,” Yudof said in remarks prepared in advance of his testimony. “But cuts of the magnitude proposed in Gov. Arnold Schwarzenegger’s budget proposal will require us to consider extremely painful options. These include the possibility of further reducing first-time freshman admissions for 2010-11, revisiting the fee increase levels for 2009-10 and implementing furloughs, more layoffs and salary reductions for our employees.”

Yudof said the proposal to eliminate the Cal Grant program would be particularly devastating to low- and middle-income students attending UC. Eliminating new awards in 2009-10 and failing to cover the 2009-10 fee increase for renewal awards would result in a loss of about $110 million in aid for UC undergraduates next year alone.

Given the severity of this proposal, and the reliance students already have placed on promises of student aid in accepting admission from UC, Yudof told the committee he believes this action requires more notice to students and their families and urged committee members to reject it for 2009-10.

Yudof stressed that both the campuses and the central office already have taken a series of actions to deal with the shortfall in state funding. The Office of the President has downsized by $67 million, or nearly 19 percent, and has reduced the number of employees by 628, or 30 percent of its work force. Meanwhile, the campuses have achieved a range of budget cuts, including reducing or freezing hiring, curtailing faculty recruitment, and, in some cases, laying off staff.

In addition, Yudof called the proposed elimination of $31.3 million in funding for UC’s academic preparation programs shortsighted. If a reduction of this magnitude is required, he said, it should be made as an unallocated cut rather than targeted at valuable programs that help educationally disadvantaged students across the state prepare for college.

Addressing the issue of student access, he warned that without funding for enrollment growth, and given the magnitude of the proposed cuts, UC would be unable to hire the faculty and offer the sections to meet the overwhelming demand for access by qualified applicants. He said the university and the Regents would have to consider further reductions in freshman enrollments for the entering class of 2010-11 to bring them more closely into alignment with UC’s resources.

Finally, the nearly $800 million reduction in state funding for UC for the 2008-09 and 2009-10 fiscal years would require the university to revisit the fee increases approved for the 2009-10 academic year, Yudof said.

“The long-term solution for our economy is to heighten investment in UC, the CSU and the Community Colleges,” Yudof said. “In the near term, unfortunately, the utter severity of the cuts proposed leaves us only difficult options to consider.

“But the Regents and I will have to act in order to ensure that UC can continue to offer the high-caliber education, research and patient care that Californians expect of us. Mediocrity is not an option.”

Colleagues:

I write to share with you the attached memorandum from President Yudof to Chancellors and Executive Vice Chancellors outlining a pay reduction they will be instituting for themselves and other UC senior managers.

Next week, we expect to have more information regarding other courses of action that may be taken to deal with the latest state budget cuts. You should know that your leaders at both the systemwide and campus level will work hard and thoughtfully to guide UC through these very difficult circumstances. As fellow UC employees, we want to be sure to share clear, real time information with you as soon as it is available. Additional information will be sent out as we work though these issues and develop solutions.

Sincerely,

Dwaine B. Duckett
Vice President
UC Systemwide Human Resources

the article linked does not say that costs went up by 400%, but rather tuition went up by 400%. At least at the state universities (or at least at the University of Washington where I work and have some idea what is going on) tuition has been going up simply because the state government has been pulling out support. This year has just been a very bad one in a long series of bad ones. Here at UW this year is the first year that money from the state is only our 4th largest source of income (number 1 is federal grants, number 2 endowment, number 3 is now tuition – used to be number 4). Rising tuition doesn’t have to mean that the costs are exploding. But the burden of paying for higher education seems to be no longer something the public is willing to pay for and instead asks students to pay for themselves.

Andreas

The way it works is that we propose a budget, with support for personnel, students, travel, equipment, etc, and then the university charges overhead on top of that. OVerhead rates vary a lot at different universities, but ours, since we do our research off campus, is a relatively modest 26%. I’ve seen overhead rates can as high as 52% elsewhere.

So take a grant for $1 million. The university takes 26% of that and splits it up into various funds, including sending it to the state as I say above, paying for power bills, capital projects, staff and faculty salaries, etc.

From the university perspective, the sources of funding are tuition and fees, overhead on research grants (federal, state, and private), “core” state funds, and private donations. The large “state” research universities tend to get only a small fraction of funding from the state, but I wouldn’t call it privatization exactly.

The University of California is a fantastic bargain for students, with annual tuition still less than $10k (for state residents). Compare that with private universities…

Krist: the wheels of government turn slowly, and stimulus funds are just now starting to flow in academia. For example ,just last week I spent a good deal of time preparing a proposal for renovation of our 40-year-old lab space and new electronics equipment. This was for the Department of Energy Office of Science, who made a call for such proposals last month, due at the end of this week. I am not sure when they’ll decide which ones to fund, or when the money will actually come.

In the mean time, we got a supplement to our grant for calendar year 2009 for supporting two more people (one postdoc, one grad student) and for travel. So these funds will make it into the economy rapidly, and yes, this is great for our scientific work!

Lastly I will mention that the state of California used $85 billion in federal stimulus funds on an array of things, includeing education, but mainly to backfill the revenue lost due to the sagging economy. As Arnold points out, he isn’t allowed to print money, only the Feds can do that…

If this is the case, then one of the following should hold:
1. Y’all have seen a 400% pay rise, so can take a 15% cut in stride.
2. You are only teaching a quarter of the number of students you used to teach.
3. The money is going somewhere else, and cuts can be made there.