UC suffers deep cuts in final state budget
Berkeley campus takes steps to reduce spending but protect core mission

13 August 2003

A month past its deadline, the California legislature adopted a 2003-04 state budget that will lead to deep cuts in non-instructional programs throughout the 10-campus University of California system, a 30-percent student-fee increase, the assumption of nearly $50 million in debt, and a one-year delay in the opening of UC Merced. The budget also provides no state funding for salary increases for faculty and staff.

Signed into law by Governor Gray Davis on August 2, the budget cuts state funding to UC programs by $410 million — $111 million more than Davis had proposed in his original budget for fiscal year 2003-04.

All non-instructional UC programs are affected, including administration, libraries, research, student services, K-12 outreach, teacher professional development, Cooperative Extension, and many others. A reduction in employee numbers, through layoffs and the elimination of unfilled positions, is being planned or implemented in most of these areas.

In addition, facing a $38-billion state budget deficit, the legislature adopted language indicating that the state will not provide funding in 2004-05 for any student enrollment growth, employee salary increases, or other inflationary cost increases at UC.

UC’s ‘historic promise’ threatened
“This is an extremely difficult budget for the university,” said UC President Richard Atkinson. “It is clear that the UC system will be taking major cuts that will greatly impact our ability to serve students and the state as a whole. We recognize that the challenges facing the legislature were huge and that compromise was necessary in order to get a budget at all. But the state’s budget situation now very clearly threatens the University of California’s historic promise of access and quality.”

With the authority granted him by the UC Board of Regents, Atkinson announced on July 30 that he is implementing an additional 5-percent fee increase, on top of the 25-percent increase adopted by the regents last month, to help cope with additional budget cuts made by the legislature near the end of the budget process. For resident undergraduates, the total increase will be $1,150 per year, with financial aid mitigating the impact on many low- and middle-income students.

“This fee increase is deeply regrettable,” Atkinson said, “but given the magnitude of the cuts we are taking, it is unavoidable if we are to protect the quality of the student instructional program.”

In addition to raising student fees, UC will absorb additional legislative cuts by borrowing $47.5 million and repaying it over five years through an increase in nonresident tuition — the first such borrowing by UC to cover ongoing operating costs since the budget crisis of the early 1990s.

The budget does provide new money for student enrollment growth in 2003-04, but it indicates such funding will not be forthcoming in 2004-05. In recognition of the looming caps on enrollment growth, UC campuses will be urged to keep 2003-04 enrollments down as much as possible to lessen the impacts in 2004-05. The university may also consider freezing 2004-05 enrollments of new freshmen, transfer students, and graduate students at their 2003-04 levels, along with other proposals for limiting enrollment. Such measures will be discussed at upcoming meetings of the regents in September, November, and January.

“For the last 43 years, under the Master Plan for Higher Education, the University of California has guaranteed a place to all students who meet UC eligibility requirements,” Atkinson said. “Now, with state budget reductions cutting so deeply into the university — and with the legislature explicitly stating that funding for enrollment growth will not be available — that promise is fading. We will do our utmost to maintain our commitments to California’s students, but the lack of funding makes this an increasingly difficult challenge for the university.”

Campus starts layoffs, strives to shield students
Executive Vice Chancellor and Provost Paul Gray said officials here are still determining the exact amount of the UC state funding cut that will be allocated to the Berkeley campus, but they expect it to be in the area of $25.5 million.

Gray added that, because the campus has been diligently preparing for deep cuts for months, “The actual reductions the campus is going to experience are the same as we had been planning for since May.”
Permanent cuts to Berkeley’s spending, he stressed, will target “areas that don’t affect the classroom experience of the student or the quality of the educational experience.” Examples of such areas, he said, include “physical plant, campus services, business services, accounting, and central support functions for the campus’s academic mission, like the registrar’s office.”

Campus officials announced last week that the campus will begin implementing some employee layoffs as part of an overall strategy to meet the budget shortfall, as well as eliminating some unfilled positions and combining unit functions to promote efficiency.

“The implementation of layoffs is a last resort,” said Gray. “Our employees are our greatest asset, and we have worked hard to address budget cuts through consolidation and reorganization. But the magnitude of the shortfall we face makes these actions necessary.”

Managers began notifying some employees of impending layoffs last week, in accordance with union contracts and staff policies.

The number of people who will be laid off or to face involuntary reductions in their work hours is not yet fully known. It is anticipated that the campus as a whole will be eliminating the equivalent of more than 200 full-time positions. Many of these, however, are vacant positions that have been left open in anticipation of state funding cuts.

These actions will vary by department and control unit, with the largest number of layoffs anticipated in Business and Administrative Services, which has the most non-academic, state-funded workers.

For regular updates on budget news, visit berkeley.edu/news/budget.