University Of California, San Diego

January 20, 1995
SUBJECT: 1995-96 Revised University Budget Plan
For your information, the following is the official news release from the Office
of the President - University Relations regarding the revised 1995-96 University
Budget Plan.
If you have any questions concerning this notice, please call Pamela Sanford at 534-3480.
Margaret F. Pryatel
Assistant Vice Chancellor
Office of the President NEWS
Date: 1/20/95 UC News Office (510) 987-9200 UC REGENTS HEAR REVISED BUDGET PLAN
SAN FRANCISCO--The University of California Board of Regents was
presented a revised budget plan today (Thursday, Jan. 19) that calls for further belt-tightening in 1995-96, with the prospects for budget stability in the subsequent three years.
The budget plan incorporates an unprecedented four-year committment by
Gov. Pete Wilson to increase state funding for higher education.
"Although there are still tough times ahead of us, this budget proposal
represents a turning point for the University of California," said UC President Jack W. Peltason. "The Governor's compact represents a strong 
commitment to renewing the state's investment in higher education. It means 
that after a period of struggle, uncertainty, and sacrifice, the University of 
California is on the move again. I am deeply appreciative of the Governor's 
support and of his explicit recognition of the University's central place in 
California's future."
The budget proposal for 1995-96 calls for improved productivity, lower
than anticipated salary increases, a temporary budget cut and a 10 percent student fee increase.
"I don't want to minimize the painful measures that will still be called
for, and they will not involve just student fee increases," Peltason said. "We 
will need to accelerate our efforts to increase productivity and efficiency."
Under the governor's plan, UC would receive a 2 percent general fund
budget increase in 1995-96 and budget increases averaging 4 percent in the following three years.
"Although the funding in the first year is less than we had hoped for,"
Peltason said, "The increases in future years will give us the stability to 
preserve quality."
For students, he said, it means that they will continue to get the
classes they need to graduate in four years or less. It will also mean that UC will continue to admit all eligible California high school graduates that
wish to attend. He furthered pledged greater cooperation and coordination among UC, California State University and the Community Colleges, to make the best use of educational resources.
UC had sought a 7.9 percent or $145 million state budget increase for
next year. The Governor's plan calls for a $36 million or 2 percent increase.
A proposed 10 percent undergraduate fee increase, with a third of the
money set aside for financial aid, would net $38 million toward balancing the UC budget in 1995-96. The remaining $65 million shortfall from what was requested would be made up primarily through lower salary increases for faculty and staff, productivity improvements, and a temporary budget cut.
The 10 percent undergraduate fee increase proposed for 1995-96 amounts
to $380. That would bring the average total fees to $4,491 a year, still about $300 less than the fees charged by the average of comparable public universities (Illinois, Michigan, SUNY Buffalo and Virginia) used for faculty salary comparisons.
For the following three years, annual undergraduate student fee
increases of 10 percent are recommended. The plan would be subject to the Regents' review each year, but "by announcing our intent, we hope to make it 
easier for students and their parents to plan their educational budgets," said UC Provost Walter E. Massey.
"Although we had hoped we would not have to increase fees, the students
do get something in return," Massey noted. "Our recommended budget plan -- 
and the Governor's compact -- will ensure that students get the classes they 
need so they can graduate in four years, or less. The sooner they graduate, 
the less they spend on the total cost of their education."
One-third of all new fee revenues will be set aside for financial aid.
Despite the fee increases of recent years, the percentage of new freshmen from low income families has increased from 25 to 30 percent from 1991-92 to 1994-95, while the percentage of freshmen from middle income families has remained between 19 and 20 percent.
Between the added UC financial aid and additional funds the governor has
proposed for the state-funded Cal Grant program, about 50 percent of UC students would have their fee increase next year covered by financial aid.
Students now pay just under 30 percent of the actual cost of their
education, Massey said, with the state subsidizing the remainder. At the end of the four year plan, he said, students would be paying about 37 percent of the cost, but still less than the 40 percent recommended by California Postsecondary Education Commission.
"A policy of modest fee increases combined with increases in financial
aid shifts more of the burden to those students and parents who can afford to 
pay more, while still preserving access to others," Massey said.
The Regents initial budget plan called for a 5 percent cost-of-living
raise for faculty and staff in 1995-96 in addition to merits.
Under the revised proposal, faculty would be eligible for the merits,
which average 2 percent, plus a 3 percent cost-of-living increase in 1995-96. The increase would still leave faculty salaries about 7.5 percent below the average of comparable institutions.
A combination of merits and cost-of-living increases totaling 7 percent
is proposed for faculty in 1996-97 through 1998-99 to reach the average of comparable institutions. "Restoring competitive faculty salaries is our 
highest priority," said Massey. "Nothing is more essential to the continued 
excellence of this university."
Under the revised proposal, staff would be eligible for merits,
averaging 2 percent, and 1.5 percent cost-of-living increase in 1995-96. A combination of merits and cost-of-living increases totaling 4 percent is anticipated for staff in 1996-97 through 1998-99. The goal for staff salaries is to keep pace with inflation.
The plan also calls for $10 million a year in efficiencies over the next
four years. This is on top of $433 million in budget cuts since 1989-90. Additionally, $13.3 million in temporary cuts are proposed for 1995-96 through delays in filling positions and postponing the purchases of equipment and supplies.
The Regents last year instituted a plan to gradually increase
professional school fees for entering students in medicine, law, business, dentistry, and veterinary medicine until they approximate the average of fees charged for those programs at comparable institutions. Consistent with that plan, a $1,000 a year increase
in 1995-96 is proposed for new students in medicine, dentistry and veterinary medicine and $2,000 for business and law. Students already enrolled in those programs would not pay the additional fee.
The Regents are expected to vote on the revised 1995-96 budget plan at a
future meeting.