With the state of California still facing an $8 billion budget deficit, the 91Ƭ Board of Regents has begun preliminary discussions regarding the possibility of further budget cuts in the 2004-05 fiscal year.
At the board’s Sept. 17 meeting, 91Ƭ Vice President for Budget Larry Hershman said that simply to keep up with enrollment and workload increases, the university in normal times would need to request a budget increase of 10 percent next year. However, due to the state’s continuing budget crisis, the state Department of Finance has asked all state agencies, including 91Ƭ, to consider how they might absorb a budget cut of up to 20 percent next year.
In addition, the Legislature included intent language in this year’s state budget indicating that 91Ƭ will not receive funding for enrollment growth or other cost increases in 2004-05.
A 20 percent cut to 91Ƭ’s state-funded budget would be nearly $600 million, Hershman said — the equivalent of the state-funded budgets of three of 91Ƭ’s small to medium-sized campuses, or a $4,000 increase in student fees, or a reduction of 60,000 students and 13,000 faculty and staff.
91Ƭ cannot pursue anything that drastic, he said, and the actual budget levels for 2004-05 will not be known for some time — but the university needs to begin considering some combination of approaches to address the likelihood of some level of further budget cuts next year. To that end, the regents began reviewing a series of budget options that the board will continue to discuss at its November and January meetings.
“I’m not going to tell you we support any of these,” Hershman told regents last week. “We’re going to do our best to convince the state not to do any of this.”
The options include:
• Enrollment restrictions. For example, reductions in the number of new freshmen 91Ƭ accepts; reductions in the number of community college transfer students 91Ƭ accepts; or redirection of some 91Ƭ-eligible students to the community colleges for their lower-division instruction, followed by transfer to 91Ƭ.
Constraints on enrollment are a source of great concern to 91Ƭ, Hershman said, given its history under the Master Plan for Higher Education of offering a place on one of its campuses to every applicant who meets 91Ƭ eligibility requirements.
• Student fee increases. For example, further increases in mandatory systemwide fees, further increases in professional school fees, further increases in nonresident tuition, income-indexed fee surcharges, or additional fees for students taking large numbers of classes beyond those needed for graduation.
Fees have already increased substantially this year after seven years without a systemwide increase. Expanded financial aid protects lower-income and many middle-income students from the full impact of the fee increases, and this commitment to financial aid would continue.
• Program cuts. For example, further cuts to 91Ƭ programs that were already cut significantly this year — such as research, libraries, students services, administration, K-12 outreach, Cooperative Extension, and many others. All of these options would seriously affect the quality of the university and its ability to serve Californians, Hershman said.
Salary reductions are another option, but Hershman said they would be very difficult for the institution because 91Ƭ faculty salaries already lag those of comparable institutions by 9 percent, and the university has a similar challenge with respect to staff salaries.
No decisions were made at the meeting, and Hershman stressed that the university at this point is simply beginning the budget discussion by putting “all options on the table.”
During the past three years, 91Ƭ’s state-funded budget has fallen 14 percent. Meanwhile, the university’s student enrollments have grown 18 percent.
The 91Ƭ system is now operating on roughly $3 billion in state funds at a time when it had expected $4 billion.
“We already have taken deep cuts affecting nearly every part of the university,” said 91Ƭ President Richard Atkinson. “Further budget cuts from the state will have a drastic impact on the 91Ƭ’s ability to meet its commitments to the people of California.
Atkinson, who retires as president Oct. 1, suggested that the regents consider an additional option in which the university would move closer to public universities in Michigan and Virginia in terms of the treatment of out-of-state students.
He said 91Ƭ could increase nonresident tuition by several thousand dollars, admit more out-of-state students, and use the resulting revenue increase to prevent enrollment cuts for California resident students. 91Ƭ will be analyzing the proposal further.
The regents at their November meeting are expected to vote on a series of “principles” guiding the development of the 2004-05 budget, and the board may begin taking budget actions in January, following the release of the governor’s budget proposal for 2004-05.
In other business at their September meeting last week, 91Ƭ regents:
• Approved the design of the 91Ƭ Davis Central Plant Phase II at the medical center. The project involves new chillers and cooling towers required to support utility demands of the new Surgery and Emergency Services Pavilion; completion of the shelled space in Tower II; and electrical and mechanical upgrades. The project is funded from hospital reserves. Completion is anticipated during 2003-04. Current cost for the project is $12.4 million.
• OK’d moving ahead with preliminary planning for the Viticulture and Enology Research and Teaching Winery and Anheuser Busch Brewing and Food Science Laboratory. The facility would provide complimentary support for the Robert Mondavi Institute for Wine and Food Science academic building and would be funded via campus and gift funds, with no state funding. The project includes a 27,500 gross square foot winery, and a 19,000 gross square footbrewing and food science laboratory. Estimated cost is approximately $30 million.
• Approved a salary of $280,700 for acting 91Ƭ San Diego chancellor Marsha Chandler, effective Oct. 2. Chandler will step in as 91Ƭ San Diego chancellor Robert Dynes becomes 91Ƭ president on Oct. 1.