Regents brace for further bad budget news
Board considers options to deal with future cuts in state funding

At last week’s meeting of the Board of Regents, UC President Richard Atkinson announced his intention to retire from that post in Oct. 2003.

20 November 2002 | The UC Board of Regents, meeting in San Francisco last Thursday and Friday, approved a basic systemwide budget for the 2003-04 fiscal year, while looking toward options for dealing with what may be further difficult near-term cuts in funding — including a possible increase in student fees for the first time in several years.

The regents also heard a faculty report on the first year of comprehensive review of applications for admission; approved a second consecutive year of additional retirement funding for UC employees; and heard UC President Richard Atkinson announce his intention to retire, effective Oct. 1, 2003.

The governor still needs to make $750 million in reductions to state operations this year, cuts that have not yet been announced. In addition, the state is estimated to be facing a deficit of at least $10 billion each year, unless action is taken to balance its budget.

Specific proposals from the state for balancing the budget may not be available until the governor releases his 2003-04 budget proposal in January. Because of this the regents discussed a list of unprioritized options as possible responses to further cuts in state funding.

UC Vice President for Budget Larry Hershman presented the ideas, including increasing student fees; reducing funding for support programs, such as administration and student services; reducing funding for public-service programs, such as outreach and Cooperative Extension; and reducing funding for research (but protecting programs for which funding was reduced 20 percent in the early ’90s and another 10 percent in the current budget year).

“None of these options is attractive,” Hershman said. “We are going to work very hard in Sacramento to make the case for the university’s budget priorities and minimize the need for cuts. But given the seriousness of the state’s fiscal challenge, we also need to consider carefully how the university might best absorb a budget reduction while maintaining the standards of quality that have always defined UC.”

Hershman emphasized that, if a student fee increase is required, one-third of the revenue from the increase would be used for financial aid to mitigate the impact on lower-income students; Cal Grants would also help reduce the impact.

He noted that mandatory systemwide student fees have not increased in eight years — they actually were reduced 10 percent in the late 1990s for resident undergraduates — and that the university’s fees are now substantially below those of its comparison institutions.

The regents will not be asked to make any decisions on student fees until a future meeting.

The regents’ approved budget asks for a level of state funding that fulfills the university’s 1995 Partner-ship Agreement with Governor Gray Davis, which calls for specific annual increases in funding for the university, coupled with a commitment by UC to make progress on a number of specific accountability measures. The state, which is estimated to be facing a deficit of at least $10 billion a year in the coming years, has not been fully funding the Partnership.

Addressing the possibility that the state will once again not fully fund the Partnership, the approved 2003-04 budget includes both a student-fee increase of 6.5 percent, which would apply to both mandatory systemwide fees and professional-school fees, and a 4-percent increase in nonresident tuition.

[A Q&A on the student-fee situation has been posted on the Office of the President’s website at www.ucop.edu/news/factsheets/2002/student_fees.pdf; it is also available at www.universityofcalifornia.edu.]

The budget also requests funding for an average 4.5-percent salary increase for eligible faculty and staff, along with funding for merit increases for eligible employees. (All salary increases would be subject to collective bargaining requirements, where applicable.)

Meanwhile, in an effort to mitigate disappointing 2002-03 salary increases, the regents approved additional retirement funds for eligible UC employees. The equivalent of 5 percent of an employee’s salary will be put into a special retirement account, called a Capital Accumulation Provision (CAP) account. The account, part of the UC Retirement Plan, it will earn a specified rate of interest (currently 7.5 percent). Employees will have access to the funds when they retire from or leave the university.

Report on comprehensive review shows ‘consistency and integrity’
The regents also heard a report on the first year’s implementation of comprehensive review of applications for admission. The report, prepared by the systemwide Academic Senate’s Board of Admissions and Relations with Schools (BOARS), was issued at the request of the regents one year ago, when they adopted comprehensive review and directed that it be implemented at each of the six UC campuses that cannot accommodate all UC-eligible applicants who apply. (Berkeley, for example, turned away roughly 28,000 applicants this year; UCLA denied 33,000 — “more than any other institution in the country,” according to the BOARS report.)

Berkeley has used some form of comprehensive review since 1998, moving away from set formulas and fixed weights in admissions decisions and toward a broader look at students academic achievements combined with personal traits, such as leadership, motivation, and commitment. Since this fall, all Berkeley applications are evaluated based on comprehensive review.

Gayle Binion, chair of the systemwide Academic Council and a professor of political science at UC Santa Barbara, told the regents that the faculty “conducted a very thorough analysis of comprehensive review and found that it was implemented in accordance with regents’ policy and in a manner that has maintained consistency and integrity in UC admissions.” Her colleague Barbara Sawrey, chair of BOARS and a chemistry professor at UC San Diego, said “Our analysis found that academic achievement is still by far the predominant consideration in UC admissions, and that access to UC has been maintained for students of all demographic backgrounds.”

Allaying the concerns of some at the time the review policy was adopted, the report found that “academic preparation, as measured by traditional indicators such as GPA and test scores, has remained quite stable” with the comprehensive review policy in place.

The report also noted that “the degree to which the selective campuses are accessible to low-income or educationally disadvantaged students has not declined, and some campuses have seen increases.” (At Berkeley, the percentage of underrepresented minorities admitted in fall 2002 actually increased slightly over the previous year.)

The report identified areas that need further study, including the role of “hardship” as a qualifying factor for admission. BOARS, said Sawrey, found no evidence that hardship plays an inappropriate role in UC admissions: “We aren’t looking to make charitable considerations; we are driven by the belief that strong academic performance in the face of obstacles is another indicator of future academic success.”

The report recommended that UC track the academic performance of students admitted under comprehensive review. It also noted that, while UC already verifies the accuracy of self-reported academic records, a systemwide verification process for applications will begin next fall.

Atkinson: UC is ‘incredibly robust’
Just prior to lunch on the first day of the meeting, UC President Richard Atkinson announced his intention to resign his post, effective Oct. 1, 2003. Only four of UC’s 17 presidents have served longer in that post than Atkinson, who took office on Oct. 1, 1995.

His tenure has been marked by a number of accomplishments, including:

• the expansion of outreach programs to K-12 schools and students;
• the adoption of comprehensive review of undergraduate admissions;
• improving admission tests;
• appointment of eight of ten current chancellors;
• extending domestic-partner benefits to UC employees;
• groundbreaking for UC Merced, the first new UC campus in nearly 40 years;
• overseeing expansion of existing campuses to help accommodate 40 percent enrollment growth;
• achieving $1 billion in annual private support for the first time in UC history.

“The University of California is an incredibly robust institution,” Atkinson told the regents. “When I became president, the university was grappling with severe budget constraints and a bitter conflict over affirmative action. I think it is fair to say that we have not only recovered from the difficulties of that era, but we have thrived.”

A special committee will be appointed by the chair of the regents to consider candidates to replace Atkinson. That committee will be assisted by an Academic Advisory Committee and will consult with constituent groups, including advisory committees of students, staff, and alumni.