Nov 07, 2009 | 10:56
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Jun 08, 2009
Campus leaders cut budget by 5 % as more potential reductions loom
Vice chancellors and deans, following the planning process put in place by UCLA's senior leaders, are now taking steps to cut 5 percent from their general fund budgets, knowing that there is a likelihood of more cuts to come as state leaders grapple with the prospect of running out of cash by the end of July.
The state's budget crisis has already triggered belt-tightening. Since January, approximately 180 UCLA employees have been laid off. The Office of the President (OP) has cut spending by more than $60 million. Salaries for senior managers systemwide have been frozen. And administrators at the highest level, including UC President Mark G. Yudof and Chancellor Gene Block, are taking a 5 percent pay cut.
Photo by Stephanie Diani.
A Town Hall meeting for faculty on the budget situation is planned for June 16 from noon to 1:30 p.m. in the Charles E. Young Grand Salon in Kerckhoff Hall.
Campus leaders said the state's budget crisis is unprecedented. “I’ve never seen anything like this,” Olsen said at a Town Hall meeting with students June 3 in Kerckhoff Hall. “It’s clear that this is by far the worst financial crisis this state has faced since the Great Depression.” The state's shortfall is approaching $24 billion, equal to around 30 percent of all the revenue the state takes in.
The exact size of the cuts the campus will face will not be known until the Legislature agrees on a plan and OP decides what action to take systemwide, Waugh said. But campus leaders are not waiting for that before making preparations. "We can make an educated guess and look at what the campus is going to have to do." Working within a short timeframe of 90 to 120 days, task forces made up of Senate members and administrators will be formed to look at changes that can be made to the academic program, which relies heavily on the state general fund.
Waugh said the cuts being proposed "are of such magnitude that we are going to have to undertake great changes in academic programs. … This will have a major impact — there's no doubt about it. It's an impact that will be felt in every corner of the campus and in every program."
Meanwhile, campus administrators “are working very closely with OP to explore a range of possible responses,” Olsen said. “Many of these options are ones that have to be addressed by the UC system."
Among the difficult decisions under study are further increases in student fees; salary reductions for employees and/or furloughs; reduced funding of state-earmarked research and public service programs, and reductions in student enrollment as well as employee/retiree health benefits.
Campus leaders said the state's budget crisis is unprecedented. “I’ve never seen anything like this,” Olsen said at a Town Hall meeting with students June 3 in Kerckhoff Hall. “It’s clear that this is by far the worst financial crisis this state has faced since the Great Depression.” The state's shortfall is approaching $24 billion, equal to around 30 percent of all the revenue the state takes in.
The exact size of the cuts the campus will face will not be known until the Legislature agrees on a plan and OP decides what action to take systemwide, Waugh said. But campus leaders are not waiting for that before making preparations. "We can make an educated guess and look at what the campus is going to have to do." Working within a short timeframe of 90 to 120 days, task forces made up of Senate members and administrators will be formed to look at changes that can be made to the academic program, which relies heavily on the state general fund.
Waugh said the cuts being proposed "are of such magnitude that we are going to have to undertake great changes in academic programs. … This will have a major impact — there's no doubt about it. It's an impact that will be felt in every corner of the campus and in every program."
Meanwhile, campus administrators “are working very closely with OP to explore a range of possible responses,” Olsen said. “Many of these options are ones that have to be addressed by the UC system."
Among the difficult decisions under study are further increases in student fees; salary reductions for employees and/or furloughs; reduced funding of state-earmarked research and public service programs, and reductions in student enrollment as well as employee/retiree health benefits.
“We have begun to take the 5 percent general fund reductions now,” Olsen said. “We have told the deans and vice chancellors that this is the best outcome we can hope for. … As soon as we get a better indication of what the systemwide response will be, we will get back to them and reengage the planning process.”
Three campus task forces that have been meeting since January under the Budget Toolbox Project have reported on their recommendations to reduce administrative costs, improve operational efficiency, increase non-state revenue, reduce the cost of the academic program and reallocate resources within that program. Recommendations range from seeking approval for a faculty compensation plan that would allow more flexibility than the existing pay structure to developing revenue-generating courses.
The reports are currently under review by faculty, students, staff, alumni and other UCLA constituents. Comments should be sent to Waugh at evc@conet.ucla.edu. An implementation committee that will include administrative and Senate leaders will be meeting shortly to establish priorities for follow-up, devise an action plan for high-priority recommendations and develop a framework for assessment for the implementation phase.
The governor's proposed budget cuts
Following the May 19 failure of five ballot measures and the state's inability to borrow $5.5 billion because it cannot obtain federal loan guarantees, Gov. Arnold Schwarzenegger proposed massive new budget cuts. To take effect, they would need to be approved by the State Legislature.
Under the governor's proposal:
- UC would lose $176 million for 2008-09. This includes the cuts that were announced last February. UCLA's share of this reduction for 2008-09 is $32 million. The campus is already cutting $18 million from its general fund budget this year. "We still have to come up with another $14 million in cuts," which will probably be carried over to 2009-10, said Olsen.
- For 2009-10, UC would lose $619 million. UCLA's share of this drastic reduction would be $109 million. The campus had been planning for a $33 million cut. "So what we could be facing will be is essentially three times the amount of the cut we had planned for," Olsen said. This amounts to about 15 percent of UCLA's general fund. "There's no doubt that, if this is approved by the State Legislature, UCLA will experience very deep cuts to a broad range of programs, including academic programs."
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The state would phase out the Cal Grant program, starting with the elimination of new Cal Grants already promised to 14,000 incoming UC freshmen and transfer students. For continuing students who already get Cal Grants, there would be no increase in their award to cover the 2009-10 fee increase. In addition, tens of thousands of UC grant recipients would be affected — as many as 60,000 in total. UCLA and other UC campuses would be forced to reallocate all state financial assistance received by students who receive need-based aid to equalize the impact on all. These would include students who don't qualify for Cal Grants.
Currently, 7,000 UCLA students, almost one-third of the student body, receive $46 million in Cal Grant assistance. Eventually, said campus officials, student debt would nearly double from $8,500 currently to $16,000 and affect a broad range of students from low to medium-income families. "To say we are deeply concerned is a huge understatement," said Olsen. "I personally am outraged about this."
On Friday, June 5, the Budget Conference Committee rejected the governor's proposal and restored funding to the Cal Grant Program, but the issue is still in flux and the committee's action is not considered the final word.
- All funding for K-12 academic preparation programs would be eliminated. Funding to UC’s academic medical centers would be reduced. The state would eliminate funding to the UC pension system and cancel lease-revenue funding that had been proposed for high-priority facilities projects.
While recognizing that the budget challenge facing the state is so enormous that UC has to be part of the solution, UC and the campuses are issuing a call to action, asking students, faculty, staff, friends and supporters to contact their legislators and stress that the proposed cuts will have dire consequences.
In an e-mail that went out June 5 to all advocates, Yudof said: “I urge you to take this opportunity to tell legislators that you support the least damaging cuts possible for public higher education and the UC campuses.”
In a call to "stand with UCLA," staff with UCLA’s Office of Government and Community Relations are mobilizing advocates to tell their legislative representatives about the extremely detrimental impact if Cal Grants is phased out, to remind them of the huge economic and intellectual returns for California with investment in UC and to urge them to allow UC the flexibility to administer cuts in the smartest way possible.
"We understand that UC has to take cuts, but unallocated cuts rather than cuts determined by Sacramento," said Keith Parker, assistant vice chancellor of government and community relations at UCLA. "UC needs to make these critical decisions about where to take these reductions."
Legislators seek to end UC autonomy
In another move, a group of legislators, including State Sens. Leland Yee, D-San Francisco, and Gloria Romero, D-Los Angeles, are attempting to strip power away from UC by introducing a constitutional amendment to give legislators the ability to set policy for the UC system. To be enacted, the proposal would have to be passed by two-thirds of the Legislature and then by voters as a statewide ballot measure.
“Given the current $25 billion hole in the state budget and the political paralysis that chronically plagues Sacramento, tossing a 10-campus public research university that is the pride of California and the envy of the world into the Sacramento mix should be a non-starter,” according to UC officials in a statement.
“Let's be clear: UC is working. At a time when it has become popular to mock California, the university survives as one of the state's great success stories. It has thrived under the system of autonomous governance, led by the Regents, that was so wisely written into the Constitution by our pioneers.
“California might have trouble marketing its bonds in the current fiscal crisis, but UC has an AA1/AA rating,” the statement continued. “The state budget may have fallen over a cliff, but UC has managed its resources prudently in a tough environment. It has been able to preserve its world-class status — a thrumming engine of educational opportunity, scientific advance and economic stimulus — even as it has absorbed a steady onslaught of cuts dictated from Sacramento.”
UCLA students have made a video appeal to keep the Cal Grant program. See it here.
In an e-mail that went out June 5 to all advocates, Yudof said: “I urge you to take this opportunity to tell legislators that you support the least damaging cuts possible for public higher education and the UC campuses.”
In a call to "stand with UCLA," staff with UCLA’s Office of Government and Community Relations are mobilizing advocates to tell their legislative representatives about the extremely detrimental impact if Cal Grants is phased out, to remind them of the huge economic and intellectual returns for California with investment in UC and to urge them to allow UC the flexibility to administer cuts in the smartest way possible.
"We understand that UC has to take cuts, but unallocated cuts rather than cuts determined by Sacramento," said Keith Parker, assistant vice chancellor of government and community relations at UCLA. "UC needs to make these critical decisions about where to take these reductions."
Legislators seek to end UC autonomy
In another move, a group of legislators, including State Sens. Leland Yee, D-San Francisco, and Gloria Romero, D-Los Angeles, are attempting to strip power away from UC by introducing a constitutional amendment to give legislators the ability to set policy for the UC system. To be enacted, the proposal would have to be passed by two-thirds of the Legislature and then by voters as a statewide ballot measure.
“Given the current $25 billion hole in the state budget and the political paralysis that chronically plagues Sacramento, tossing a 10-campus public research university that is the pride of California and the envy of the world into the Sacramento mix should be a non-starter,” according to UC officials in a statement.
“Let's be clear: UC is working. At a time when it has become popular to mock California, the university survives as one of the state's great success stories. It has thrived under the system of autonomous governance, led by the Regents, that was so wisely written into the Constitution by our pioneers.
“California might have trouble marketing its bonds in the current fiscal crisis, but UC has an AA1/AA rating,” the statement continued. “The state budget may have fallen over a cliff, but UC has managed its resources prudently in a tough environment. It has been able to preserve its world-class status — a thrumming engine of educational opportunity, scientific advance and economic stimulus — even as it has absorbed a steady onslaught of cuts dictated from Sacramento.”
UCLA students have made a video appeal to keep the Cal Grant program. See it here.
