Proposed budget cuts bring UC shortfall to $1 billion

Gov. Gray Davis has suggested nearly $300 million in new state funding cuts at UC as part of his 2003-04 state budget proposal released Jan. 10. With these proposals, the UC system’s state-funded budget falls nearly $1 billion below the level the university had expected under its Partnership Agreement with the governor, an agreement that outlines the university’s basic funding requirements.

Since the beginning of the 2001-02 year, UC has taken $533.3 million in state funding cuts and has forgone an additional $423.5 million in expected Partnership funding for faculty and staff salaries and other cost increases, for a total shortfall of $956.8 million. UC’s proposed state-funded budget is thus approximately $3 billion at a point when, under the Partnership, it was expected to be roughly $4 billion.

The governor’s cuts for 2003-04 are part of a series of state budget cuts intended to address a state budget deficit estimated by the Department of Finance at an unprecedented $34.6 billion. UC cuts include spending reductions in areas including administration, libraries, research, educational outreach, teacher professional development, student services, and Cooperative Extension and other public service programs.

The proposal does, however, provide funding for enrollment growth, allowing the university to continue providing a place for all eligible students seeking a UC education.

"The source of these devastating cuts lies in the state’s overwhelming deficit, and in that context they are understandable," said UC President Richard Atkinson. "However, the cuts will spread great pain across the UC community and come at a time when we are working to accommodate major growth in California’s college-age population."

As part of the cuts, the governor is proposing a reduction in state funding for the university’s instructional budget, which he assumes would be offset by a student fee increase.

Fee increases this year and next would net $179.1 million, representing less than 20 percent of the solution to the university’s $956.8 million shortfall.

The governor’s budget proposal includes no funding for salary increases for UC faculty and staff in 2003-04.

"The lack of funding for salaries is another unfortunate element of the situation we are facing," Atkinson said. "Competitive compensation is key to quality, and a merit program must continue to be a high priority for the university. We will be looking closely at our options as the budget process moves forward, and we remain hopeful that a recovering economy will begin to provide some fiscal relief later this spring."

Proposed cuts in state funding

The $299 million in proposed cuts don’t become final until a state budget is approved by both the governor and Legislature. Specifically, the governor proposed the following:

• Administration and libraries: A mid-year reduction of $20 million grows by $16.5 million to a total reduction of $36.5 million in 2003-04. Each campus and the Office of the President would have discretion to achieve its portion of the cut in locally determined ways.

• Educational outreach: A $3.3 million mid-year cut grows by $30 million to a total reduction of $33.3 million in 2003-04. This figure represents a 50 percent reduction in remaining state funding for UC educational outreach. "This is a particularly difficult cut because the university has made a deep commitment to helping improve K-12 performance and expanding access to a college education," Atkinson said. "I expect this proposal will be debated at length in the Legislature, and we will be closely involved in the conversation."

• Research: An $18 million mid-year reduction in state-funded research programs grows by $10.8 million to a total reduction of $28.8 million in 2003-04. This amount reflects a reduction of 10 percent, on top of a 10 percent across-the-board cut already enacted in the 2002-03 budget. It is not specified how the new reduction would be achieved.

• Student services: A mid-year reduction of $6.3 million grows by $19 million to a total reduction of $25.3 million in 2003-04. This cut represents an approximately 20 percent reduction in registration fee-funded programs. Campuses would have local discretion in achieving this level of savings.

• Teacher professional development: A $15 million cut to the California Subject Matter Projects, which provide professional development for K-12 teachers in California. The cut would leave the program with $5 million. The governor proposes that the program use the remaining funding to offer science education programs eligible for federal matching funds.

• Public service: A $2.5 million mid-year cut for UC public service programs grows by $12.5 million to a total reduction of $15 million in 2003-04. Affected programs include Cooperative Extension, which has farm, 4-H, nutrition, family and consumer sciences advisers throughout the state.

• AP Online: A $4 million mid-year reduction grows by $0.4 million to a total reduction of $4.4 million in 2003-04. This cut reflects a 50 percent reduction in funding for the UC College Preparatory Initiative, which provides online Advanced Placement coursework.

• K-12 Internet: A mid-year reduction of $1.1 million remains at $1.1 million for the 2003-04 fiscal year. This reduction affects the Digital California Project, which brings the next-generation Internet2 to California public schools.

• Instruction/student fees: A reduction in state funding of $179.1 million for instructional programs, which the governor assumes would be offset by student fee increases (details below). Of this amount, $19 million represents a mid-year cut in the 2002-03 budget that was filled by a student fee increase beginning in the spring 2003 academic term.

• Unallocated reduction: An unspecified 2003-04 budget reduction of $34.8 million. The university will be assessing options for allocating this cut in the event it is approved.

In addition to the above cuts, the governor proposed increases in UC funding for specific purposes in 2003-04, including:

• Enrollment growth: $117.2 million to fund enrollment growth of 8,000 students in 2003-04 and 5,000 current UC students who have not been funded by the state.

• UC Merced: $11.3 million in one-time start-up funds needed to open the new Merced campus by 2004. UC Merced is a critical part of the university’s plan to accommodate major enrollment growth over the course of this decade.

Under the governor’s proposal, UC’s state-funded budget for 2003-04 would total $3.01 billion. That amount is 4.4 percent below the university’s final budget for 2002-03 – after the latest mid-year budget cuts were taken – but 10.4 percent below UC’s original $3.36 billion budget for 2001-02, before the state’s falling revenues forced budget cutting to begin. Over the same two-year period, UC’s student enrollment has grown by about 12 percent, or 20,000 students.

Student fees

The budget assumes that mandatory systemwide fees and selected professional school fees will increase 35 percent over the two years 2002-03 and 2003-04. Regents will have a thorough discussion of budget and fee issues at their March meeting and are not expected to take action on 2003-04 student fee levels until later in the spring.

Under the governor’s budget, mandatory systemwide student fees in 2003-04 would be $4,629 for resident undergraduates and $4,869 for resident graduate academic students.

Under the governor’s budget, professional fees in 2003-04 would be $5,400 in veterinary medicine, $6,750 in dentistry, $8,100 in business, $8,606 in law, $7,256 in medicine, $4,050 in optometry and pharmacy, $2,430 in nursing, and $2,700 in theater/film/television.

Regents approved the spring professional school fee increases recognizing that fees for these programs at UC are significantly lower than the average at comparable public universities. The differential ranges from $2,200 per year in nursing to $8,400 in medicine.

The budget is available at http://www.

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