University of California, San Diego

October 8, 1993
SUBJECT: Regents' Discussion of 1994-95 University Budget
For your information, following is the official news release from the Office of the President - University Relations regarding the October 12, 1993, Regents' discussion of the 1994-95 University budget.
If you have any questions regarding this notice, please call me at 534-3480.
Corinne K. Foster
Thursday, October 7, 1993
Mike Lassiter (510) 987-9200
A proposed 1994-95 state funded budget request designed to
keep the University of California from losing further financial ground will be presented for discussion at The Board of Regents meeting Oct. 12 at the Radisson Hotel in Sacramento.
The proposed budget of $1.9 billion, which calls for an 8
percent or $142 million increase in state funding next year, will be considered for adoption by the board in November.
"This proposed budget would neither recoup past losses nor
improve our situation," said UC President Jack W. Peltason. "Essentially, it would prevent future erosion in quality and help 
maintain access. We are striving to keep the University of 
California accessible to all qualified students who wish to come 
and to make UC an even better engine for providing jobs in 
If funded, the budget would be the first increase in state
funding for UC in four years. But, it would still leave the University with less state support than it received in 1988-89. Currently, the University is operating with less state funding than it received in 1987-88. "We are operating our programs with $341 million fewer state
dollars than in 1990-91," Peltason said. "We are doing more with 
less; we are educating all eligible students who choose to come, 
faculty are teaching more, and we are graduating students in 
larger numbers than ever before. But I must add that if the 
budget-cutting trend of the last few years continues, it will 
take decades to recover." Peltason said a strategic planning process is underway to
identify ways in which the University can permanently adjust to a reduced funding base because there is no prospect of recouping past losses. "Review of academic programs has been accelerated 
with the goal of setting priorities and focusing resources 
selectively," he said. "The University is also exploring new ways 
of sharing resources among the campuses and capitalizing on the 
most recent educational technologies. Opportunities to achieve 
further cost savings and management efficiencies will also 
continue to be explored."
Part of the Oct. 12 meeting will be devoted to a discussion
and re-examination of the University's fee and financial aid policies. State and national perspectives on college fees and financial aid approaches will be presented. Those discussions will continue in November with a public forum and will be followed by broad consultation.
Next year's fees and a longer-term fee and financial aid
policy may be adopted as early as January.
"Given the growing gap between state funds and the needs of
California's colleges and universities -- including UC -- it is 
more than just likely that students and their families who can 
afford to pay more will be asked to do so," Peltason said. "There 
are, at the moment, very few other options available to bridge the 
gap. But that is essentially a short-term solution, and what 
California urgently needs is a long-term answer to the problem of 
financing higher education. The time has come to re-think how we, 
as a state, distribute the costs of educating California's young 
Since 1990, UC student fees have increased 125 percent. But
thanks to an increasing amount of financial aid, which has covered virtually all of the fee increase for low-income students, the University has been able to increase the percentage of entering freshmen students from low-income families and continue to enroll the same percentage of students from middle- income families as before. It is estimated that this year about half of all UC students will have the fee increase completely covered by financial aid.
For 1994-95, the Governor has very tentatively proposed a
budget increase of slightly over 3 percent for UC, which would cover less than half of the increase in the proposed Regents budget request. If that figure does not grow, even with increased operating efficiencies, an additional student fee increase -- in the range of increases in recent years -- may be required. In addition, special fees for graduate students in professional schools may be implemented and/or increased on a phased basis. Fees for all other undergraduate students would be expected to increase more sharply if professional school fees are not instituted.
Even with the added state funds, the proposed 1994-95 budget
will require a $53 million cut in Office of the President and campuses budgets. The savings from this cut will be reallocated to restore salaries to where they were before this year's one- time 3.5 percent pay cut for faculty and staff.
Through early retirement programs, attrition, layoffs and
other cuts, UC will have reduced funding since 1990-91 for over 7,000 faculty and staff. The largest cuts have been in administration. "We have sought to safeguard the quality of our academic
programs by cutting administration first and most deeply," Peltason said.
Under the proposed budget, faculty and staff would receive
a full year 5 percent cost-of-living increase, equivalent to what is being proposed for state workers. It would be the first cost- of-living increase for faculty and staff in four years. Merit increases for eligible faculty and staff would also be paid for demonstrated outstanding performance. Even with the proposed pay raise, UC faculty would still lag
5 to 6 percent behind the average faculty salaries at the comparable eight public and private institutions traditionally used for salary comparisons.
The lag in salaries, Peltason said, "reflects a substantial
loss of purchasing power and sends a negative message about the 
University across the nation, making it more difficult to recruit 
and retain faculty and staff who meet the University's high 
standards. To ensure future quality, it is critically important 
that the University return to a competitive position in the 
The Regents also will be reviewing a proposed capital budget
of $258 million for 1994-95 that would require funding by a combination of revenue bonds approved by the governor and Legislature and general obligation bonds approved by voters. More than 80 percent of funds would go to projects already underway. >>UC NewsWire<<