Budgetucsenatetoregentsupdate Cn 0909

Academic Senate Budget Overview Presented to The Regents May 17, 2007

With Sept 2009 Update (this last part does not represent the Views of the Academic Senate)

Standard Storyline:

Ups and Downs, but Long-term is Up

What’s Wrong With That Picture? 

It doesn’t adjust for:   



inflation enrollment growth costs of academic innovation

It doesn’t explain faculty experience of campus erosion

Widening Funding & Quality Gap

State and UC General Funds and Student Fees Adjusted for Enrollment Growth

A Steady Decline in Public Investment in a High-Quality UC State Funds for UC Operations as share of State Personal Income 0.400%

0.350%

0.300%

0.250%

0.200% 1985-86 1987-88 1989-90 1991-92 1993-94 1995-96 1997-98 1999-00 2001-02 2003-04 2005-06

State Funds for UC Operations as share of State Personal Income

The Senate’s Key Questions I. What is the present and likely future of UC’s core budget? II. How can UC make up structural budgetary shortfalls?

Focus on “Core Campus Funds” Supporting UC’s Core Educational Mission      

State General Fund Student fees Endowment payout Some private support Indirect Cost Recovery on grants Miscellaneous

Not Included

(Non-core; carry offsetting expenses) 

Sponsored projects   

  

Federal Business Foundations

Hospitals National labs Auxiliary enterprises

Three potential budget scenarios

 

Extend the Compact? Return to 2001 Pathway? 



Last time that UC was relatively healthy

Return to 1990 Pathway? 

A recent benchmark of educational quality

The Compact permanently reduces the fraction of core funds the State provides State Funds / Core Funding 70.0%

60.0%

50.0%

40.0% 2001-2

2002-3

2003-4

2004-5

2005-6

2006-7

Actual Data & The Compact

2007-8

2008-9 2009-10 2010-11

2001-02 funding

So that even with large annual fee increases, UC’s core budget is permanently cut by about 25% State Funding: The Compact vs. 2001-level Funding (Millions) 6,000 5,000 4,000 3,000 2,000 2001-2

2002-3

2003-4

2004-5

2005-6

2006-7

Actual Data & The Compact

2007-8

2008-9

2009-10 2010-11

2001-02 funding

Increased Burden for Students and their Families Core Funds 2004-05

Core Funds 2001-02 5.1% 4.6%

6.4%

3.9%

4.3%

4.4%

8.7%

11.1%

45.7%

60.9%

16.7%

28.1%

State Funds

Fees & NRT

ICR

Endowment

Private

Other

State Funds

Fees & NRT

ICR

Endowment

Private

Other

“Futures Report” Findings 1. 2. 3.

The Compact will not allow UC’s state funding to recover to “2001 Pathway,” but locks in decline The gap between returning to the 2001 Pathway and the 07-08 budget request is $1.1 billion A return to traditional UC quality (1990 Pathway) would require over $2 billion in additional funding

Re Key Question I: Does the Compact allow the core UC budget to recover to pre-cut levels? Answer: No, not by a long shot

Key Question II: How could UC make up for continued shortfalls in state funding? To reach 2001 Pathway:  Increases in federal and private research funding?  Relatively small future increases, and research is costly  Private fundraising?  Need to raise $25 billion in three years, on top of current $7 billion endowment, with no decrease in state funding  Fee increases?  If state funding maintained but not increased, need to raise fees to $15,000-18,000 per year by 2010 Answer: Only huge fee increases could make up for lagging state funding

UC at the Crossroads 2007 1.

2.

3.

Extended Compact: fees up ~8% per year, no recovery to 2001 Pathway 2001 Pathway: attainable, but at current level of state funding this requires raising fees to $15-18,000 in three years and large continuing increases thereafter 1990 Pathway: would restore full-quality core operations, but remains way over the horizon

Senate Conclusions 2007 1.

3.

5.

UC’s quality depends on getting back to 2001 Pathway Getting there with fee increases would change UC’s character to preserve its quality Preserving UC as a great public university requires a greater investment of public funds

July Budget 2009 



The Governor and legislative leaders reduced UC’s state funding from $3.2 billion to $2.6 billion This is about the level of 1999-2000, when UC had 165,000 students instead of today’s 220,000 students

Budget Devastation: UC is on Path 6, $2.5 Billion below normal growth from 2001.

The Conclusions are Obvious 



UC cannot fulfill any of its public missions without rebuilding its public funding. UC needs a Compact with the students of California: set a minimum public investment of funds per students (2007 levels to start), and fight for it tooth and nail.