OFFICE OF THE ASSISTANT VICE CHANCELLOR
RESOURCE MANAGEMENT
July 28, 1994
ALL AT UCSD
For your information, below is a summary, released by the Office of the President, of President Peltason's remarks to the Regents related to the 1994/95 University of California budget.
Margaret F. Pryatel
Assistant Vice Chancellor
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
REGENTS' MEETING PRESIDENT J. W. PELTASON SAN FRANCISCO PROVOST WALTER E. MASSEY JULY 14-15, 1994 University of California
1994-95 BUDGET OUTCOME
(PRESIDENT PELTASON)
_ I have some good news--and some bad news. I'll give you the
good news first: We have a reasonable budget for the year. The bad news is, some of it may get taken away. _ At a time of extraordinary fiscal difficulty, the Governor
and Legislature worked out a two-year budget plan that retires the State's accumulated $2 billion deficit by the end of 1995-96. Education is given priority. _ The University is provided a budget increase, instead of a
decrease, for the first time in four years. The Governor and the Legislature approved a budget that is generally consistent with the plan approved by The Regents in January, and I am very appreciative of that fact.
_ While the State's budget plan is funded somewhat
differently, its basic intent is the same and it supports roughly the same expenditures as The Regents plan. _ All parties were able to work together in developing a
compromise budget that would allow a reduction of next year's fee increase but also would accomplish The Regents' basic goals.
_ I am extremely pleased, also, that the Governor and
Legislature approved funding for the first salary COLA for UC faculty and staff since 1990-91.
_ Despite all these pluses, the fact is, we do not really know
how much State General Fund money we will receive in 1994- 95--or in 1995-96. _ While the State Budget Act provides a specified level of
funding for the University, language in a trailer bill leaves us vulnerable to a mid-year budget reduction each year. Our State-funded budget could be significantly reduced at a time when we are already very far along in both the fiscal and the academic year, with students enrolled and classes underway. _ Under the circumstances, I am recommending a cautious
approach to 1994-95. We must do everything we can to avoid imposing further budget cuts on the campuses. University budgets have already been cut by $433 million over five years--including a $53 million cut in 1994-95 to restore base salary levels. An additional budget cut, to be made up in only the last few months of the year, could mean devastating layoffs.
_ I believe the only prudent course for now is to position
ourselves so we are fully prepared to reduce fees and increase salaries, and then to implement those actions just as soon as we know that there will be no mid-year budget cut. We will know by November 15 whether there is any possibility of a cut.
_ We intend to proceed with the merit portion of our salary
program in any event. The quality of this University is at stake after years of budget cuts and the merit salary program is a key element in maintaining quality. _ At the November meeting, we will return to The Regents with
an update on the State's fiscal situation. We hope that it will be a positive report, of course. If not--if it looks like there might be a mid-year cut, we will propose an alternative course of action. _ Provost Massey will describe the 1994-95 budget outcome in
more detail and also discuss our tentative plans for implementing the fee reduction and salary increases.
--Msg_Part_Sep_CC1526401--