UCLA leaders call for cost-cutting to deal with worsening state budget crisis
UCLA's senior leaders are urging deans and vice chancellors to take steps now to reduce expenditures because of the state's worsening budget crisis and the deepening funding cuts the campus will likely face this year and in 2009-10. 
In a letter to deans, vice chancellors and Academic Senate leaders, Chancellor Gene Block recommended that faculty hiring be slowed as much as possible and that the launch of any new academic program requiring state funding be delayed. He advised that any unfilled career and temporary staff positions should remain open, and no new staff positions should be created. He also outlined other budget-cutting strategies that departments should take regarding travel, consulting contracts and other administrative efficiencies.
The cost-cutting is necessary, he said, because of state's worsening budget plight. "While these actions will help mitigate the impact of funding reductions in part, all of the information currently available to us suggests that additional funding shortfalls will likely have an impact on academic and administrative programs," Block said in his letter. "Our planning process for 2009-2010 anticipates this possibility."
Block's warning was underscored by Executive Vice Chancellor Scott Waugh in a sobering update to the Academic Senate's Legislative Assembly, which met Nov. 13 in the Charles E. Young Grand Salon. Waugh said he and the chancellor are doing everything possible to protect the integrity of the academic enterprise but that the magnitude of the problem means academics may not be completely insulated.
"Despite the difficulties we're facing – and they are rather daunting – we intend to move ahead with the academic program … working with the Senate to make sure that the excellence of our academic programs is maintained," Waugh said. "We don't want to lose any momentum in these areas. We may have a lot to overcome, but we also have a lot to do."
How budget problems worsened
Since September, when the governor and legislature approved the state budget, the economic news has grown progressively worse. The approved budget left UC with essentially the same funding it received the previous year, but with no money to cover major cost increases for utilities, employee benefits, academic compensation and building maintenance – costs the campuses are absorbing. For UCLA, those unfunded costs for 2008-09 come to $31 million, impacting all units.
One area that was severely hit by the budget shortfall was teaching at the undergraduate level, especially in areas with large numbers of teaching assistants and lecturers. To sustain those course offerings, the chancellor provided more than $2 million for temporary teaching.
Then, earlier this month, analysts estimated the state deficit had grown to $11 billion and projected that it could reach $25 billion next year. In response, the governor mandated a $33.1 million mid-year cut to UC – with UCLA taking a $6.3 million cut – and called an emergency session of the State Legislature. Chancellor Block decided to cover this reduction with central campus funds.
The governor is now proposing an additional $65.5 million cut to UC's budget. Legislators have until Nov. 30 to come up with a budget solution. If they approve that cut, UCLA will have to cope with an additional $12 million mid-year cut. That would bring UCLA's total loss for 2008-09 to $49 million.
The big picture
UCLA is now over-enrolled by 1,450 to 1,475 undergraduates. In total, the UC system is now over-enrolled by 10,000 students. "We are getting fee money from these students, but not as much money as we would have gotten if they were part of our regular enrollment," Waugh explained.
On top of all this, prospects look bleak that funding from the NIH, NSF and other federal sources will remain steady or rise, because of the nationwide economic downturn and federal budget problems.
"For the first time in my experience," said Waugh, "we're going to have to look very seriously at the academic side. We have been taking more and more out of operations and staff support. We don't have much more to go."
Where do we go from here?
The challenges UCLA faces over the next two to three years will require that academic leaders think broadly and act strategically, Waugh noted.
Among the short-term cost-saving measures the chancellor and executive vice chancellor are asking campus leaders to consider are:
- A cutback on faculty hiring. Any approved searches can go forward; however, they may need to be reevaluated after the governor announces his 2009-10 budget plan in mid-January. Any new searches must be first approved by Waugh. Any appointment is going to require very strong academic justification, related to workload, diversity and academic quality and mission, he advised.
- Prioritizing course offerings
- Eliminating courses with low enrollment
- Reviewing requirements for majors
For the long-term, schools and divisions will need to set academic priorities, working with the faculty executive committees in consultation with the undergraduate and graduate councils. Departments should review their academic fields. "If you don't get those faculty positions, what fields are you not going to have? These are judgments that are going to have to be left up to departments," Waugh said.
Departments may need to think about shifting teaching to summer sessions and consolidating departmental functions and computing services.
Building strength in a crisis
To help UCLA get through this, the Budget Toolbox project will be launched in December with the formation of three working groups whose members will be appointed by Waugh. Each group will have a representative from the Academic Senate, and each will come up with options and recommendations that UCLA can implement on its own. While one group will work on academic programs and priorities, another will focus on increasing revenue. A third will identify options for reducing spending and restructuring operations.
Although the situation is grim, Waugh emphasized that the campus needs to look at this as an opportunity to build a better future for UCLA.
"We're a very strong institution," he said. "We should think about these cuts and changes in the context of making this strong institution even stronger. Where can we improve to make our academic institution second to none? How can we do a better job … and do it with less?"
