Federal, State Funding Ease Campus Strain

Budget reduction options under discussion since last month are off the table, Chancellor Gary S. May and Provost and Executive Vice Chancellor Mary S. Croughan said Monday (Jan. 11), attributing the decision in part to new federal stimulus money and the proposed state budget.

The campus drew up the options, including pay reductions, furloughs or reductions in time, in response to UC President Michael V. Drake’s Nov. 23 guidance related to the university system’s pandemic-related financial challenge.


Factors cited by the chancellor and provost in deciding against additional budget reduction actions at this time:

  • New federal stimulus funding — UC Davis expects to receive $50.9 million. About $17 million will be directed to financial aid, with the rest available to mitigate other pandemic-related financial impacts.
  • State budget proposal — It includes partial restoration of the base budget reductions assigned for 2020-21. “Of course, the balance of the base budget reduction, at least $30 million, remains, and the governor’s proposed budget does not include any net-new funding for cost increases in 2021-22.”
  • Budget mitigation plans — Campus funits demonstrated more than $50 million in one-time savings that has already been achieved or is planned to occur this year. These savings far exceed the $18.8 million target assigned by President Drake. Budget and Institutional Analysis will issue a request for updated plans through June as part of the budget planning process. “We expect savings to grow due to ongoing actions such as continued vacancy management and reduced travel.”

The chancellor and provost had asked other campus leaders to review the options for possible implementation after the first of the year.

Monday, May and Croughan sent a letter to the Council of Deans and Vice Chancellors, saying: “We will not take additional budget actions at this time.”

Factors behind the decision include two that emerged after the budget reduction options went out for review: Federal stimulus money approved in late December includes nearly $51 million for UC Davis, and Gov. Gavin Newsom’s proposed state budget, released Friday (Jan. 8), includes the partial restoration of base budget cuts for 2020-21.

May and Croughan also credited campus units that have come up with more than $50 million in one-time savings, already achieved or planned, far in excess of the $18.8 million target that President Drake assigned for UC Davis.

May and Croughan cautioned their decision to forego additional budget actions at this time “should not trigger a sigh of relief.”

“Budget challenges remain, and we continue to face difficult decisions at all leadership levels,” they said. “We prefer the most strategic approach and believe our collective efforts are best focused on the multiyear planning framework, rather than mid-year budget actions.

“Moreover, we recognize the many sacrifices that have already been made by all members of the UC Davis community. Mid-year budget actions would only add further stress during these challenging times.”

As the annual budget process proceeds, units should anticipate new budget savings targets (ongoing and perhaps also one-time) requiring larger reductions and rebalancing efforts, May and Croughan said.

“We ask that you continue to identify and redeploy budget savings within your unit to address pandemic-related and other high-priority needs. The principle of shared sacrifice is relevant here as savings may need to be redirected throughout your school, college or administrative unit to more strategically mitigate financial challenges.”

Shared sacrifice

May and Croughan expressed appreciation for “the extensive and thoughtful feedback” on the budget mitigation strategies that went out for review by campus leaders, “and the willingness many expressed to support a strategy of shared sacrifice during these difficult times.”

“Our community has met so many challenges so ably in recent years, and especially during the pandemic. We are grateful to you for all that you have done, for your commitment to the core mission of the university and for your willingness to do even more if necessary.”

The chancellor and provost noted, in particular, the feedback they received indicating salary actions “were generally accepted as part of a plan of necessary shared sacrifice during an exceptionally difficult time.”

“The general feedback favored consideration of tiers that would protect more employees at the lower tiers in favor of larger reductions for the upper tiers. As well, we received good input about possible implementation and timing considerations.

“This is good advice that we may rely upon should circumstances deteriorate substantially in the future, and we find ourselves faced with such options again.”

Follow Dateline UC Davis on Twitter.

Media Resources

Dateline Staff, 530-752-6556, dateline@ucdavis.edu

Primary Category