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July 31, 2001
To: Campus Community
From: M.R.C. Greenwood, Chancellor
Re: 2001 – 02 State Budget Allocations
Dear Colleagues:
As you may have learned from recent news coverage, the state has adopted a final 2001--02 budget. In it, the University of California budget receives an overall 4.7 percent increase, despite an overall 1.7 percent decrease in the State General Fund spending plan. This overall reduction is due to tax revenue shortfalls resulting from the slowing California economy and the falling stock market. (See the story about the new UC budget in Currents Online (http://www.ucsc.edu/currents/01-02/07-23/budget.html)
The University of California fared better than many other state-funded entities. The new budget provides 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. There also is funding to avoid a systemwide student fee increase this fall, making 2001-02 the seventh consecutive year without such an increase. In addition, the Regents recently took action once again to fund fee remission for TAs. This will support our priorities for graduate education, and is complementary to the state’s ''buying out'' of fee increases for undergraduate students.
A very important part of the proposed budget did not remain intact, however. The final state budget provides only half of the new funding requested for employee compensation and other fixed costs. This is especially disappointing, given the progress the university has begun to make in addressing staff and faculty compensation needs.
The University of California made every effort to maintain funding for the university’s "partnership agreement" with Governor Davis, which includes an annual 4 percent increase in the funds UC uses to cover fixed costs, such as employee salary increases, increased health benefit costs, inflationary price hikes, and other similar expenses. Throughout the budget process, the university, along with representatives of UC labor unions, lobbied hard for full funding of the partnership agreement. They made clear to state leaders that providing competitive compensation for faculty and staff is critical to maintaining UC’s standards for quality programs and quality employment. While many in Sacramento agreed, they also stood by their conviction that employees of UC and the California State University should be treated similarly to employees of other state entities, which also are impacted by the state’s reduced revenues. In fact, the budget includes 0 percent increase--that is, no additional funding--for salaries of state employees.
The University of California will continue advocating with the Governor and the Legislature for restoration of funds necessary to improve faculty and staff salaries. UC needs this funding in order to recruit and retain the talented and dedicated employees that play an integral role in the university’s success.
Improving salaries is one of the university’s highest priorities, and the university continues to strive to attain all salary objectives. Even while recognizing that this year’s budget likely will impede progress toward these objectives, it is important to note significant gains that have been made on two critical fronts: (1) bringing faculty compensation up to the average of our comparison institutions; and (2) providing additional funds beyond the normal salary program for many staff employees, with the majority of those funds going to employees at lower salary levels. These have been important advances, and all of us are deeply disappointed to lose the momentum to continue increasing the competitiveness of UC salaries.
In this new budget year, salary increases for exclusively represented employees will be subject to collective bargaining. Details about salary programs for nonrepresented employees are expected from UCOP in the near future. Negotiations for 2002 health plan rates are under way now, and should be completed within the next several weeks.
Also on a positive note, the capital budget for UC provides $207 million in general-obligation bond funds for the university’s regular capital improvement. In addition, the new budget includes funding to help campuses continue to upgrade cabling for access to Internet 2, plus funding is in place for all four of the California Institutes for Science and Innovation, in two of which UC Santa Cruz is a major participant.
Again, this is a year of mixed budget success. Despite very positive news for research programs, undergraduate fees, and other essential elements of university operations, and despite the diligent efforts that the University of California made--and is continuing to make--to pursue compensation goals for its employees and for other funding priorities, the final budget provides less than we hoped.
Nonetheless, it is clear that higher education remains a top priority for the Governor and the Legislature. It is essential that we work together, in order to continue gaining support and resources from the state. Now, more than ever, we must vigorously pursue our current strategic planning. This will ensure that we are well positioned to take advantage of new opportunities when the economy rebounds.
Maintained by:pioweb@cats.ucsc.edu