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January 18, 2002
To: DEANS, VICE CHANCELLORS, UNIVERSITY LIBRARIAN
From: EVC/Campus Provost John B. Simpson
Re: Governor’s 2002-03 Budget Update
Dear Colleagues:
On December 21, I informed you of the status of the budget picture for 2002-03 and of midyear cuts to the University’s budget. I am writing now to provide you with an update on Governor Davis’s 2002-03 state budget proposal, which was released last week. His proposal places a clear priority on education, and given the fiscal challenges facing the state, it is favorable for the University of California. The Governor’s proposal calls for full funding of the University’s projected enrollment growth, provides merit increases for faculty and staff, keeps student fees level, and to help stimulate the economy of the state, accelerates funding for some capital projects. Overall, however, the proposal reduces funding increases to the Governor’s Partnership to UC from 4% to 1.5% and identifies cuts to specific UC programs.
The Governor’s budget proposal is based on optimistic assumptions with respect to economic recovery in the state and the sale of bonds to repay the State Treasury for buying electricity during last year’s energy crisis. Furthermore, the proposal relies heavily on deferred spending and loans to fill the estimated $12.5 billion budget shortfall over the next 18 months. The release of the Governor’s budget proposal is just the first step in a long political process of negotiation leading to the signing of the final state budget, hopefully by June 30, 2002. The fact that we currently are in an election year makes the final outcome particularly difficult to predict.
The implications of the Governor’s budget for our campus are mixed. Although specific aspects are favorable, it does present us with very real budget challenges as we seek to accommodate enrollment growth while building the infrastructure and programs required to sustain the ongoing operations of an expanding campus. We can expect increased funding from enrollment growth. The building construction to accommodate growth in Engineering and Social Sciences will be accelerated significantly. Funding for faculty and staff merit increases will be significantly less than the University would otherwise receive under the partnership, and no funding is provided for libraries, equipment, deferred maintenance, and Internet 2. Furthermore, we have been advised by the Office of the President that we may have little or no growth in the University’s budget over the next several years.
The hiring freeze initiated by the Governor’s Executive Order remains in place for state agencies. UCSC thus will continue the general campus hiring freeze put in place last fall, and I caution you, as principal officers, to exercise the utmost prudence with discretionary expenditures and in making permanent budgetary commitments. I am presently considering the options available to the campus for 2002-03 budget allocations and faculty recruitments, I will consult with you as well as with the Academic Senate Committee on Planning and Budget prior to issuing a specific call. I recognize that this information is vitally important for your own internal planning purposes, and will do my utmost to provide you with the specificity you seek during February.
Although the urgency to re-evaluate budgetary priorities within the context of budget cuts is less pressing, I encourage you strongly to continue assessing your divisional priorities and make budgetary decisions mindful of the principles that were articulated in my December 21 letter to you.
If you have any questions or need additional information at this time please contact Vice Chancellor Michaels or me.
Sincerely yours,
John B. Simpson
Campus Provost and
Executive Vice Chancellor
cc: Chair Blumenthal, Academic Senate
Vice Provost Brown
Chancellor Greenwood
Chair Meister, Committee on Planning & Budget
Maintained by:pioweb@cats.ucsc.edu