UC and State Budget
July 1, 2003
MEMBERS
OF THE UNIVERSITY OF CALIFORNIA COMMUNITY
As you surely know, the new fiscal
year began today without a State budget in place. Because
there has been a significant amount of news coverage
regarding the effects on State agencies of not having
a budget, I want to provide you with a quick summary
of where the University of California stands.
The lack of a State budget is a serious
concern to us, and the longer the State goes this summer
without a budget, the more of a problem it becomes for
the University. We certainly share the hope that a budget
resolution can be reached as quickly as possible. Let
me summarize the impact of the budget impasse on the
University, as best we can now tell, in two principal
areas:
Salaries: State Controller
Steve Westly has issued a letter indicating that State
employees, including UC employees, will continue to
be paid their regular salaries for the first part of
the summer. As a result, we currently expect our July
1 and August 1 payrolls to be processed normally. However,
the controller indicated that in August or September,
if the State still does not have a budget, his office
will begin implementing a recent court decision that
said State employees may only be paid the minimum wage
while there is no budget. This change is not being implemented
immediately because it requires a large number of State
computer programming changes, the controller said. While
it is unclear at the moment whether or how the University
would be impacted by this court ruling, UC employees
should be aware that they may potentially be subject
to it. This means that, later this summer, salary payments
for UC employees could be temporarily reduced until
there is a state budget (at which time full salaries
would be paid retroactively). Please be assured that
the University will do everything it can to prevent
this outcome and that we will share more information
as it becomes available.
Payments to vendors:
Controller Westly also indicated that he is not providing
UC and other State agencies with funding for non-payroll
expenses in the new fiscal year. During the first part
of the new fiscal year, the University typically is
paying bills incurred during the last part of the previous
fiscal year. As a result, vendors should not worry about
an immediate cut-off of payments. However, if the budget
impasse lasts until the end of the summer, the lack
of State funding for non-payroll expenses could become
a serious issue. The Office of the President will monitor
this issue closely and will be in touch with campuses
as decisions in this area need to be made.
The University's State-funded budget
for 2003-04 remains in a precarious position. In addition
to the deep cuts that already have been approved, members
of the Legislature are discussing even deeper cuts across
State government, including at the University of California.
Already, both houses of the Legislature have agreed
on $80 million in additional cuts to UC, and there are
Republican proposals to cut several hundred million
dollars more from the University. We are continuing
to make an aggressive case in Sacramento for the University's
needs, but it is increasingly apparent that the next
few years could be very difficult ones and that much
more significant budget cutting may lie ahead. We will
provide more updates about this year’s likely
budget outcome as information becomes available.
Thank you for your patience, your understanding,
and your good work for the people of California.
Sincerely,
Richard C. Atkinson
President
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