Gov. Davis approves state budget, providing mixed news for UC
State funding to increase overall, although salary increases fall short of goal

27 July 2001 | Gov. Gray Davis and the California Legislature have approved a final 2001-02 state budget that, while giving a boost to many University of California programs, fell short of the university’s goals for improving faculty and staff compensation this year.

UC’s $3.2 billion state-funded operating budget will increase $152 million annually, or 4.7 percent, this year. By contrast, due to a downturn in the state’s economy and tax revenues, overall state General Fund expenditures will fall 1.7 percent.

The new budget provides full funding for UC enrollment growth of 7,100 students in 2001-02, a 4.5 percent increase over last year, and it includes state resources for the university to begin a phased-in program of expanded summer instruction, taking effect first at UC Berkeley, UCLA and UC Santa Barbara.

The budget provides funding to avoid a systemwide student fee increase this fall, making 2001-02 the seventh consecutive year without a systemwide fee increase. The new spending plan also includes funding to help cover the university’s increased costs for natural gas.

Unfortunately, the budget provides less funding than the university and the governor originally proposed for faculty and staff compensation increases. The pool of funds provided to UC for fixed cost increases — including employee salary increases, increased health benefit costs, inflationary price hikes and other similar expenses — was reduced from 4 percent to 2 percent due to the state’s reduced revenues.

The final budget also eliminated a 1 percent augmentation that had originally been proposed for deferred maintenance, instructional technology, instructional equipment and libraries.

"The reduction in salary funding was particularly disappointing, and restoration of that funding will be a high priority for us because it is critical to maintaining quality programs," said UC President Richard Atkinson. "However, given the very difficult fiscal circumstances the state is facing overall, we are grateful to Gov. Davis and the Legislature for continuing to place a high priority on all of education, including the university."

The capital budget for UC provides $207 million in general-obligation bond funds for the university’s regular capital improvement program, which includes construction of new academic buildings, seismic upgrades of existing facilities and other infrastructure improvements throughout the UC system.

In addition, the new budget provides $160 million in funding, mostly from lease-revenue bonds, for infrastructure and construction of the first academic buildings at UC Merced.

The budget also includes the second installment of funding for three California Institutes for Science and Innovation that will conduct research in cutting-edge scientific fields critical to the future of the state’s economy. In addition, the governor and the Legislature are providing a first installment of funding for a fourth institute — CITRIS, the Center for Information Technology Research in the Interest of Society, a joint venture among Berkeley, UC Santa Cruz, UC Davis, UC Merced and private-sector partners.

The state’s darkening fiscal picture resulted in many of the university’s original budget proposals for 2001-02 being reduced or eliminated during the budget process this year, including augmentations for graduate and professional school outreach, student retention services, compensation for staff salaries that lag the market, and several research initiatives.