|Yudof Q&A with reporters
|Replay first video
|Read President Yudof's letter
to legislative budget committee
The governor's proposed cuts for UC mean that over the two year period, consisting of fiscal years 2008-09 and 2009-10, our state-funded budget will have fallen by $619 million, or 19 percent from the 2007-08 level. UC faces an additional gap of $335 million over the same period for increasing costs that have not been funded by the state.The student fee increases over those two years will fill only an estimated $211 million of the funding gap. On June 1, President Yudof joined California State University Chancellor Charles Reed and California Community Colleges Chancellor Jack Scott in testifying before the Joint Legislative Conference Committee on Budget. The three detailed the consequences of the proposed cuts to the state's higher education systems.
While the budget situation is quickly changing, UC is moving forward in its efforts to deal with these funding challenges and to pursue further cost-saving strategies. Our University asked Vice President of Budget Patrick Lenz to talk about some of the key budget issues we're all facing.
What steps is UC taking to deal with the latest round of proposed state budget cuts?
"We're going to have to end up considering some pretty draconian budget reductions on top of cost-cutting measures that are already going on. All of the campuses have cut back on faculty hiring, some by more than 50 percent. Low-demand programs are being eliminated and class size will increase. Campuses are having hiring freezes, layoffs and voluntary separation programs. UC San Diego has cut its work force by more than 800 positions. UC Riverside recently eliminated its vice chancellor for administration office and put its plans to open a School of Public Policy on hold. Those are just a few examples. Everyone is going to feel the pain of the state's budget crisis.
"There's also $575 million in capital facilities projects that has been taken out of our budget. We think it's smart to restore it. This is for construction of campus facilities, deferred maintenance, upgrades to buildings. This is a very competitive bid environment. Projects can be constructed for 25 to 40 percent less than what they were. These projects create jobs. Every construction project we do is it's own economic stimulus."
What's UC's biggest challenge?
"I think the challenge for UC is trying to serve all our students with a 10 percent or 20 percent cut. We have an over-enrollment of 11,000 students. That amounts to a $121.8 million funding need on top of the actual budget cuts. We're doing our best to maintain the high quality of our academic programs, and preserving undergraduate and graduate education has to be our highest priority."
What do budget cuts mean for UC employees?
"Well, 80 percent of budget is spent on human capital. As President Yudof has said, given the magnitude of the proposed cuts everything must be on the table. For employees this could mean furloughs, salary reductions and layoffs. We've just imposed a 5 percent pay cut on senior managers."
How much can UC save with furloughs?
"It's hard to estimate the savings since we don't know which employees would be affected or how many. For every one day of furlough a month for every employee, we could save $10 million in general funds. That's $120 million in general fund savings in a year."
What are some other cost-cutting measures?
"More administrative savings, reducing travel, minimizing overtime, deferring equipment purchases. Restructuring at the campus level comparable to what we've done at OP to take advantage of administrative efficiencies. Given the magnitude of the problem, it's going to be a big challenge for the campuses."
Will there be more cuts to the Office of the President?
"The OP budget has been reduced by $67 million and its work force by 30 percent. We're getting to a point where we would not have the ability to meet the needs of the system or the governor or the legislators if we don't have a fully functioning Office of the President."
Are there any other sources of revenue UC can tap?
"We may have to look at short-term borrowing. Our credit rating is better than the state's. Student fee increases are an option. UC did benefit from federal stimulus money, but the economic stimulus money is short-term and one-time in nature. And the problem is that the state's proposal to eliminate the Cal Grant program, which benefits the lowest-income students, undercuts severely the positive impacts of the economic stimulus for financial aid. At this point, everything is on the table. But with the proposed cut to Cal Grants, we would approach a fee increase very carefully.
"I think UC is a necessity for the economic vitality of the state and its future welfare. There are both short and extremely long-term benefits from supporting UC. The state has to do more. I'll very shortly have four children in higher education in California. I hope there is room for them. I'm immensely worried that we're on the verge of denying our young people an education. We're doing the state a disservice for the future by denying access. I'm worried about the future of California if we can't provide educational opportunities to well-qualified students."