Anticipated shortfalls in state funding, requiring cuts of perhaps 3 percent this year and up to 15 percent in 2002-03, will be accommodated by strategic - not across-the-board - reductions determined through broad consultation and communicated widely, say Chancellor Larry Vanderhoef and Provost and Executive Vice Chancellor Virginia Hinshaw.

Vanderhoef, who oversaw the campus's Phase 1, 2 and 3 budget-cutting process of the early 1990s, said lessons have been learned from that earlier experience, particularly:

• The need to act swiftly ("UC was initially in denial.");
• A need to make strategic cuts ("Freezes, for example, were hardly a plan, just a convenience.");
• The importance of avoiding cuts that so disproportionately affect staff ("The staff-per-faculty ratio decreased, hurting both constituencies, and we've never quite gotten back to where we should be."); and
• The need to only accept additional students with increased funding ("The regents have declared we will not make the mistake again of growing without funding, but admittedly that will be a real challenge because of our obligations under the Master Plan.").

Both Vanderhoef and Hinshaw say they will try to buffer campus units from pending mid-year cuts, but that some reductions will still be necessary in preparation for bigger cuts expected in 2002-03. The magnitude of those larger cuts, perhaps up to 15 percent, likely won't be known "with any certainty" until next May, Hinshaw said.

The UC regents are considering several options for accommodating that funding shortfall, including constraining enrollments, increasing student fees, limiting faculty and staff salary increases, deferring state-supported summer instruction and implementing targeted cuts for programs that have received substantial funding increases in recent years.

A voluntary early retirement incentive program, however, has not been proposed by the Office of the President, Vanderhoef said.

Budget-cut principles

Several principles will guide the campus's budget reduction process, said Hinshaw:

• Reduce budgets strategically, not across the board.
• Prioritize programs; fulfilling the campus's academic mission is the highest priority and requires both faculty and staff.
• Communicate openly, honestly and frequently.
• Consult broadly.
• Streamline current processes and procedures.
• Seek new resources (for example, through fundraising, new research programs and public-private partnerships).
• Increase student access through alternative approaches (for example, expanding summer instruction over time).

Balanced approach

Hinshaw emphasized that "we have to make strategic investments and cuts" while fulfilling the campus's mission.

"And that mission involves both faculty and staff," she said. "If we don't preserve adequate staff and other academic support, faculty members cannot do their jobs. So our decision-making must accommodate limiting faculty and staff growth together."

As for academic initiatives, some must go forward and some "will have to pause," she said.

And the biennial budget review process that affords units the opportunity to compete for additional resources will be delayed until the budget picture improves.

"Taking the time and effort to prepare budget proposals now makes no sense when no new resources will be available," Hinshaw said.

Time recovery

While the campus can't keep doing more, she added, it can do things differently and recover time to respond to new needs.

"We must all seriously and thoroughly consider ways to recover time by making our processes and practices more efficient and productive," she said.

New research and fund-raising initiatives would also provide a significant return on investment, Hinshaw said.

"We have every ability to generate innovative research initiatives that bring new resources to the campus, and we must generate and support those activities," she said. "Even in the absence of budget reductions, we must enhance our fund-raising efforts because our private support will play an increasing role in our ability to excel as a university."

Keeping perspective

Both the chancellor and the provost advised perspective and cautious optimism as the campus again enters into another budget-cutting process.

"Last time (in the early 1990s), we cut 25 percent over a three-year period," Vanderhoef said. "Fifteen percent here is the worst-case scenario. And there are good reasons to think this will be short-lived this time."

Added Hinshaw: "We have a noble enterprise that adds value to society, and we work around a lot of bright people in a clean and safe environment, so we are very fortunate in many ways. Sure, it's negative right now, but life will go on and UC Davis will continue to be strong. However, if people carry trunks of memories around with them as we try to board a plane for a new destination, we'll never get the plane off the ground," she said.

"I like to say you can only have a small carry-on; in that way, UC Davis will get to the destination we all want."