Regents said they were reluctant to constrain access to the university but that state elected leaders should understand the impact of continuing budget cuts to the university. UC currently enrolls 10,000 more students than it receives state funding for, at a cost to the campuses of $120 million. And the state's per-student spending for education at UC, adjusted for inflation and enrollment growth, has fallen nearly 40 percent since 1990 -- from $15,860 in 1990 to $9,560 today in current, inflation-adjusted dollars.
The full board will take action on the proposal, including the statement about enrollments, on Thursday. Further details about fall 2009 enrollments will be discussed at a future meeting.
"The situation we face is serious, and some very tough choices are ahead of us," UC President Mark G. Yudof told the Regents in San Francisco. "We need to preserve access and affordability to the greatest extent possible. We also need to ensure that we're providing students access to an education of the high quality they expect of UC. And we can't leave the state with the impression that we can continue doing more and more with fewer and fewer resources."
The committee also heard a report from several UC chancellors about the effect of budget cuts on their campuses and heard an update on the continuing downsizing of the UC Office of the President in Oakland, where spending has been reduced by $60 million and 500 employees.
The board is not taking action on student fees at this meeting, though the budget proposal includes preliminary assumptions of fee revenue. The Regents will be able to set 2009-10 student fee levels only after receiving the governor's January state budget proposal and evaluating the multiple needs and priorities in the university's budget.
For the current 2008-09 fiscal year, the state reduced its operating support for UC by $48 million, and the governor has proposed another $65.5 million in mid-year cuts. In addition, UC must achieve $100 million in savings in 2008-09 to cover student enrollment growth and inflationary increases in fixed costs that the state budget did not fund. Furthermore, the state is still confronting a major budget gap to address in the 2009-10 state budget.
To begin the meeting, several UC chancellors described reductions occurring at the UC campuses which may intensify as a result of state budget cuts, including delayed and reduced academic programs, slowing recruitment of faculty, more limited student services, and reduced class offerings that could impede students' progress to timely graduation. Campuses across the system also are working to achieve administrative and business efficiencies wherever possible.
The committee then took up adoption of a 2009-10 budget proposal for UC, a document that serves as a budget request to the state of California and kicks off the annual state budget process.
UC officials told the Regents that the university recognizes the state's significant fiscal difficulties and intends to work constructively with elected officials on solutions. However, they said, it also is important at the beginning of the process for UC to lay out a plan reflecting the university's true budget needs if it is to continue delivering on its mission for California.
"We need to forcefully articulate what it takes to keep the University of California great," Yudof said. "This is an honest statement of what it takes to sustain quality."
Core operating funds for the university, consisting of state general funds, student fee revenue and other UC operating funds, currently total $5.4 billion and would increase $815 million, or 15 percent, under the 2009-10 proposal. State general funds alone currently total just over $3 billion and would increase $530 million, or 17 percent, under the plan.
The budget proposal includes funding for enrollment growth, core academic needs, compensation for faculty and staff, and resumed contributions to the UC Retirement Plan. It also includes funding for recommended initiatives including improving graduate student support, restoring instructional program funding cut in earlier budgets, restoring funding for labor research, providing start-up funding for a UC Riverside medical school, and providing operating funds for the California Institutes for Science and Innovation. More background on the budget proposal is at www.universityofcalifornia.edu/regents/regmeet/nov08/f6summary.pdf.
For planning purposes, the budget plan includes a preliminary assumption of revenue associated with a 9.4 percent increase in mandatory systemwide student fees (a 10 percent increase in the Educational Fee and a 4.2 percent increase in the Registration Fee). However, the board is not acting to set student fees at this meeting and the preliminary assumptions are subject to change.
With any fee increase ultimately approved, UC's intention would be to continue providing financial aid to mitigate the impact on families in need. UC sets aside one-third of the revenue from fee increases to provide grants for eligible students to offset the increase, and Cal Grants and federal grants provide assistance as well.
Separately today, the Regents were presented with a revised 2008-09 operating budget for the UC Office of the President in Oakland. The UCOP budget includes both central administrative activities for the UC system and academic programs that are not part of central administration but historically have been counted as part of the UCOP organization.
The revised budget reflects further savings of $8.7 million and 97 employees just since the 2008-09 budget was adopted by the Regents in May. In total, the UCOP budget has now fallen $60 million, from $290 million in 2007-08 to $230 million in 2008-09 (a 21 percent reduction), and the work force has dropped by 500 employees, from 1,873 to 1,373 (a 27 percent reduction). More than half of these reductions (54 percent) represent true savings for the university; the balance (46 percent) represent transfers of programs from UCOP to campuses and other locations more appropriate for administering these programs.
The UCOP budget adopted by the Regents in May reflected a 10 percent budget-cutting effort across all UCOP departments. Since then, the additional savings noted above have been achieved through a voluntary separation program for employees and an effort to consolidate a number of functions previously scattered across UCOP departments, from computer support to business processing.
The Office of the President also has implemented vacancy controls and new pre-approval requirements for purchasing and travel in order to further contain costs at the central office.
The Regents' finance committee also approved today a capital improvements budget requesting $801.8 million in state lease-revenue bond funding and $40.6 million in existing general obligation bond funding for facilities projects addressing enrollment growth, seismic safety, infrastructure renewal, and telemedicine and medical education.
A summary of the operating budget proposal approved by the Regents' finance committee is at www.universityofcalifornia.edu/regents/regmeet/nov08/f6summary.pdf. Detail is available at www.universityofcalifornia.edu/regents/regmeet/nov08/f6current.pdf. The capital improvements budget is at www.universityofcalifornia.edu/regents/regmeet/nov08/f6state.pdf.