Governor's proposed spending plan leaves uncertainties
Gov. Jerry Brown’s proposed 2012-13 budget is a mixed bag for UCLA.
On one hand, it adds $90 million in state funding to help UCLA and other UC campuses pay rising costs related to employer contributions to the underfunded UC Retirement Plan. On the other hand, the governor wants to make permanent the $100 million "trigger" cut
that was imposed on UC when state revenues fell short of projections earlier in December.
The proposal also includes a message welcomed by higher ed officials describing in general terms Brown’s long-term goals to support public higher education, limit tuition increases and stabilize funding. But if voters reject a tax initiative planned for the November ballot, funding to the UC system would automatically be cut an additional $200 million.
The bottom line is that the governor wants to make "virtually no change in proposed state funding" for the 2012-13 fiscal year that starts July 1, UCLA Vice Chancellor and Chief Financial Officer Steve Olsen said in a Jan. 6 memo to senior administrators and faculty leaders.
"Gov. Brown’s budget is just the first step in enacting a state budget (and) there is considerable uncertainty about the final outcome," Olsen said in his memo. The end result for UCLA, he said, will depend on many variables, including state revenue projections, budget negotiations, the legislature’s final actions and the allocation of state funds to the campuses by UC President Mark Yudof.
"The governor has made a statement indicating that he would like to restore funding to the UC system beginning in 2013-14, and continuing through 2015-16," Olsen said in an interview on Friday (Jan. 6). "But that is contingent upon approval of his tax measure. So it isn’t something that just happens because the governor says he wants to do it. He would have to propose it in 2013-14, and the legislature would have to approve it — every year thereafter."
In a statement released Jan. 5, Patrick Lenz, UC vice president for budget and capital resources, said he was gratified that the governor has recognized that, after a 20-year hiatus, the state has a responsibility to resume paying for a portion of the retirement costs. And Brown’s statement supporting long-term state investment in UC, Lenz said, "is encouraging. It appears the governor is moving in the right direction after cuts totaling $750 million this year alone."
Over the past decade, per-student state support to UCLA has been halved, from $18,351 in 2001-02 to $9,178 in the current fiscal year. Major reductions in funding have forced the UC Board of Regents to increase tuition several times to maintain academic quality. The UC Office of the President, UCLA and other UC campuses have slashed administrative costs and increased efficiencies to save hundreds of millions of dollars annually. Through its Restructuring Steering Committee
, UCLA is streamlining academic and administrative programs and finding more efficient ways to operate.
Given the uncertainties surrounding state support, Olsen said he expects the campus to maintain a conservative approach to budgeting. The top priority remains the preservation of academic excellence, he said.
Olsen said he and his staff will continue to closely monitor the funding situation as it develops over the rest of this fiscal year and continue to stay in touch with administrative, academic and student leaders.
"Notwithstanding these uncertainties, the governor’s budget is a useful base for our planning activities over the next six months," Olsen said in his memo. "We will be using this document to prepare a projection of core revenues for next year."