Let us not squander our greatest resource

As I've traveled around to our campuses, I am continually impressed by the ingenuity and energy of our students and by the talents and passions of our faculty. I am reminded that California's most valuable raw material is human intellect. The university is an economic engine producing skilled workers and whole new industries. Yet at precisely the time that we need to invest in human capital in order to drive our state out of recession, we find ourselves on a course of radical disinvestment.

I understand that the magnitude of our state's budget situation means that no institution is immune from sacrifice. At the University of California, we know this well. The university is being asked to absorb $813 million in state funding reductions over two years. That amounts to a cut of about 20 percent.

We intend to rise to the challenge as best we can, to re-imagine the future of our university and to develop ways of delivering the same excellent education in a more efficient manner.

So far, we've been able to distribute that sacrifice across the system, in order to preserve our core mission of world-class teaching and research. Student fee increases already approved will cover about $200 million of the shortfall. We have dramatically cut expenses at the Office of the President and will continue to do so. We have circulated three proposals to the faculty and staff for furloughs and/or salary reductions.

Campus leaders are holding meetings to discuss the pros and cons of the different approaches. UC is a complex institution, with many sources of funding and many different enterprises, and the choices will be difficult. But the goal remains to reduce personnel costs by roughly the same amount that fees have been increased, about $200 million. Unfortunately, this will require significant personal sacrifice by employees and their family members. Our expectation is that a plan will be put before the Board of Regents at its July meeting.

The remainder of the projected cuts will fall to the campuses, and here is where we have the most to lose. The cuts will likely affect course availability, class size, student services and other aspects of the educational program. In spite of the considerable sacrifices that have already been made, the viability of our core mission is at stake. If these cuts continue at their current rate – or if they deepen – there is a real chance that we will be unable to preserve the excellence Californians expect.

I say this not to be an alarmist, but to be a realist – and to remind you of what is at stake. Over the years, we have developed some impressive markers of student success: 80 percent of our entering freshmen graduate in six years – the most common measure of graduation rates – compared with 74 percent for students at comparable public universities belonging to the Association of American Universities. More importantly, our four-year graduation rates are rising significantly, from 36 percent of freshmen who entered in 1992 to 59 percent who entered in 2004. In addition, the university's undergraduates are more diverse, ethnically, racially and economically, than those at peer public and private AAU institutions.

California's economic future depends on the talents of our people. Developing that potential and turning ideas into marketplace solutions, is what makes UC an economic engine for the state of California. Invest and UC will help power this state out of recession. Fail to invest and a great resource will be squandered. Not only that, we will fail to develop our state's most valuable resource, the intellectual potential of our young people. It's not too late to change course.

Contact me at president@ucop.edu.