Nov 07, 2009 | 09:10
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Apr 08, 2009
Important questions and answers on UCLA's budget
Steve Olsen, vice chancellor of finance, budget and capital programs, provides an update and answers questions on key budget-related issues.
What is status of the state budget?
The State of California faces an unprecedented fiscal crisis. In February 2009, the State Legislature and Gov. Arnold Schwarzenegger approved a two-year plan to close a budget shortfall exceeding $40 billion. The budget includes major spending reductions, tax increases and budgetary borrowing. It also assumes voters will approve five measures in a special election scheduled for May 19, 2009. Failure of one or more of these measures could affect the state budget next year and in subsequent years.
For additional information on the state budget, see the sites operated by the California Department of Finance and the Legislative Analyst’s Office.
To learn more about the ballot measures, visit the Secretary of State’s site.
For additional information on the state budget, see the sites operated by the California Department of Finance and the Legislative Analyst’s Office.
To learn more about the ballot measures, visit the Secretary of State’s site.
How is the economy affecting the state budget?
The national and state economies remain weak, and state revenues are down. The Legislative Analyst has estimated that state revenues next year will be $8 billion below the levels assumed in the approved state budget. As a result, additional budget action may be needed.
How does the state budget affect UC and UCLA?
For 2008-09, the budget reduces UC’s state funding by $33 million on a one-time basis and $65 million permanently. The final budget for 2009-10 reduces state funding for UC by an additional $50 million. The total permanent reduction is $115 million.
UCLA’s share of this year’s one-time cut is $6 million, and its share of this year’s permanent reduction is $12 million. UCLA’s share of next year’s reduction is estimated at $9 million.
In addition, the budget contains no funding for mandatory cost increases for employee compensation, benefits, utilities and building maintenance. These unfunded costs bring our total budget shortfall over the two years to about $80 million.
For 2008-09, the budget reduces UC’s state funding by $33 million on a one-time basis and $65 million permanently. The final budget for 2009-10 reduces state funding for UC by an additional $50 million. The total permanent reduction is $115 million.
UCLA’s share of this year’s one-time cut is $6 million, and its share of this year’s permanent reduction is $12 million. UCLA’s share of next year’s reduction is estimated at $9 million.
In addition, the budget contains no funding for mandatory cost increases for employee compensation, benefits, utilities and building maintenance. These unfunded costs bring our total budget shortfall over the two years to about $80 million.
How are this year’s budget cuts being implemented?
For 2008-09, $10 million of the cut is coming from campus central reserves. The remaining shortfalls are being absorbed from the budgets of our academic and administrative units. Chancellor Block has provided $4 million in temporary funding to defray the immediate impact of these cuts on instructional programs.
UCLA is significantly reducing hiring of both faculty and administrative staff. Our deans, vice chancellors and managers have been directed to reduce spending on travel, entertainment, consulting services, office renovations and equipment purchases.
How is UCLA planning for 2009-10?
Chancellor Gene Block has directed deans and vice chancellors to prepare for a 5% reduction in General Fund revenue next year, and for the resumption of retirement contributions on April 15, 2010. After consultations with stakeholders on how best to minimize the impact on critical areas, final budget decisions will be communicated in June.
Will there be layoffs?
Each organization will be reviewing its staffing in relation to meeting budgetary requirements. Any reductions in staffing would depend on the level of funding available. In order to minimize the need for layoffs, the University has implemented the Staff & Academic Reduction in Time (START) program, which allows voluntary reductions in time. Additionally, departments have been encouraged to reduce other expenditures, such as travel costs. Responsibility for determining staffing levels rests with department management. Check with your supervisor or manager for further information.
Will there be furloughs?
University of California President Mark Yudof has asked his staff to review policies and to develop a contingency plan for the possibility of implementing furloughs in the event the budgetary situation declines further. These matters will be discussed with the UC Board of Regents in May. There is no proposal at this time to implement furloughs, and the President’s Office indicates there would be flexibility for each campus to implement actions in ways appropriate to their unique circumstances, including the need to maintain clinical health enterprise operations, ensure public safety, and honor existing union contracts and government regulations.
Can faculty and staff expect salary increases in 2009-10?
Faculty eligible for merit increases will continue to be reviewed as part of the formal merit review process. At present, no cost-of-living adjustments are planned for 2009-10. Although President Yudof has asked the Regents to approve salary freezes for senior managers in 2009-10, no decisions have been made on staff salaries. Any increases for represented employees would be subject to collective bargaining, but no funding is budgeted for that purpose.
What is happening with the UC Retirement Program?
The UC Regents have approved an overall plan (PDF) to resume both employer and employee contributions to the retirement program in 2009-10. Under this plan, contributions will resume on April 15, 2010.
The UC Regents have approved an overall plan (PDF) to resume both employer and employee contributions to the retirement program in 2009-10. Under this plan, contributions will resume on April 15, 2010.
Will there be incentives for early retirement for faculty or staff as there were in difficult budget years in the 1990s?
There are no plans to offer early retirement incentives.
Will student fees increase?
The state budget anticipates that the Regents will approve an overall increase of 9.3% in mandatory fees for California resident students in 2009-10. This consists of a 10% increase in the Education Fee and a 4.2% increase in the Registration Fee. Fees for certain graduate professional programs would increase by amounts ranging from 5% to 24%. Tuition for nonresident undergraduates would increase by 5%. Fees are subject to change. The UCLA Registrar’s Office has additional information on student fees.
What is the Budget Toolbox Project?
UCLA Executive Vice Chancellor/Provost Scott Waugh has appointed three task forces to examine long-term options for setting academic program priorities, reducing administrative expenses and increasing campus revenue. The task forces will report their recommendations in late April 2009, and their work will be considered as part of campus planning processes for next year and subsequent years.
I have ideas for saving money. How can I communicate them to these task forces?
UCLA Executive Vice Chancellor/Provost Scott Waugh has appointed three task forces to examine long-term options for setting academic program priorities, reducing administrative expenses and increasing campus revenue. The task forces will report their recommendations in late April 2009, and their work will be considered as part of campus planning processes for next year and subsequent years.
I have ideas for saving money. How can I communicate them to these task forces?
Send your ideas to those email addresses:
Ideas to save money: efficiencies@ponet.ucla.edu
Ideas about academic programs: academic@ponet.ucla.edu
Ideas to generate new revenue: revenues@ponet.ucla.edu
I’m interested in supporting the University’s advocacy efforts in Sacramento. How can I help?
UCLA Government & Community Relations has many ways in which to involve UCLA faculty, staff and students as advocates for the University and public higher education. Your voices are important. To find out how to get involved, I encourage you to visit the Government & Community Relations site or call (310) 794-6823.
How can I stay informed?
Please see UCLA’s budget website.
