Berdahl discusses budget crunch with campus staff

14 November 2001 | The state budget crisis and its effect on salaries were the hot topics at the chancellor’s annual address to staff on Tuesday.

A standing-room only crowd filled the Bechtel Engineering Center’s Sibley Auditorium to hear the chancellor discuss how an expected 15 percent cut in the university’s budget will affect staff.

“Dealing with the inevitable reductions will be an important and difficult task for the campus,” he said. “We will work hard to minimize the impact on current employees and make certain all segments share in the difficult problems this crisis will bring about.”

The chancellor told the gathering that a number of steps have been or will be taken to address the impact of the economic shortfall.

Among them is the creation of an executive budget committee, which is charged with developing a campus response to impending budgetary constraints. The recommendations will be distributed broadly across campus to get input from various representative groups, he said.

A more immediate response to the budget cuts came last Friday, the chancellor said, as he instituted restrictions on new campus hiring. Some exemptions will be granted if they meet specific criteria (see this week's Berkeleyan story, Chancellor institutes hiring restrictions).

“We need to restrict new hires to only those that are essential,” the chancellor said. “Because we are facing a shortfall, we’ve got to reduce our expenditure level over the next six months.”

Expanded enrollment, expected to bring more than 4,000 students to the campus over the next several years, will likely be halted, he said.

“Given the budget crisis we face, we probably will be freezing enrollment in the course of next year,” said Berdahl. “It remains our intent to make certain that we don’t outstrip our capacity any further than we already have.”

To offset the minimal salary increases this year and future payroll limitations, said Berdahl, the regents will vote at their Nov. 14-15 meeting on a proposal to create a special interest-accumulating retirement account that would become available to UC employees when they retire or leave University service.

“This doesn’t buy groceries; it isn’t available now,” he said. “But it is recognition of the fact that our compensation is not keeping pace with the market and we cannot provide the kind of salary increases we would like to.”

The chancellor said that the Voluntary Early-Retirement Incentive Program, better known as VERIP, offered in the early 1990s is unlikely to be reinstituted.

“It is expected that this downturn will be of shorter duration (than in the early 1990s),” he said. “All the prognoses we’ve seen show that the state will begin coming out of the crisis within a year.”

Several questions from the audience referred to a recent San Francisco Chronicle story on proposed 25 percent salary increases for UC executive vice chancellors and engineering. In light of the university’s budget woes, some in the audience said they felt this raise was unfair.

“There are 35 senior managers on the Berkeley campus and only two of them are getting these increases; the rest of us are getting 2 percent like everyone else,” the chancellor said. “I support these increases and feel they are appropriate and necessary.”

Berdahl also touched on transportation, safety and staff retention issues in the talk sponsored by the Berkeley Staff Assembly.