UC faces operating, capital budget challenges

The governor’s May Revision to the state budget proposed restoring $98.5 million to UC, leaving state support for the university at roughly the same level as 2007-2008.

However, the university is still lacking up to $240 million in state funding needed to cover enrollment growth, faculty and staff salaries, benefits, utilities and other inflationary operating expenses. 

A 7.4 percent student fee increase UC Regents approved on May 15 will generate $70 million after student financial aid is set aside. UC expects to save another $68 million in administrative costs. Even with those actions and the improvements in the May Revision, campus budget cuts likely will lead to fewer class sections, larger class sizes and reduced student services, among other impacts.

Major capital challenge. Meanwhile, UC faces a new budget challenge relating to facilities: Budget subcommittees in both houses of the Legislature have eliminated funding for a total of 22 projects located on nine of the university’s 10 campuses. The projects include critical seismic and life safety upgrades, expansion of research and teaching facilities – including overcrowded and outdated science, engineering and biomedical centers – and upgrades to utility and drainage systems to comply with environmental and safety regulations.

Needed resources. Lack of funding for upgrading labs and teaching facilities will impair UC’s ability to provide a high-quality education, to recruit and retain faculty and to produce important research for California. Many of these facilities are important centers of work force training and industry innovating needed to support California’s economic growth and stability. In addition, eliminating the funding misses an opportunity to help jump-start the California economy through the new construction activity that would come from these projects.

Building safety. UC has seismic safety needs totaling $2 billion, with most retrofitting projects at UCLA and UC Berkeley. Progress on addressing those critical needs will be halted.

Costly delays. In addition, delaying funding of these projects for one year will increase the costs by an estimated $21 million. In some cases the university will lose private donor funds if the projects are not completed. For example, without state funding, $100 million in donor gifts for a 200,000-square-foot biomedical and health sciences building could be jeopardized at UC Berkeley. And the UC Davis School of Veterinary Medicine could lose significant private funding if construction of a replacement for antiquated facilities, with substantial environmental and life-safety problems, does not move forward as planned.