University of California, San Diego



October 22, 2008


SUBJECT:    Information About 2008-09 Systemwide Salary Increases

The following information has just been released by the Office of the President regarding the UC budget for the 2008-09 fiscal year and the related impact on salaries and benefits.

Paul W. Drake
Senior Vice Chancellor -
Academic Affairs

Steven W. Relyea
Vice Chancellor -
Business Affairs


Information for UC employees about 2008-09 systemwide salary increases

As previously announced, Gov. Schwarzenegger and the Legislature recently adopted a final state budget for the 2008-09 fiscal year that did not provide funding for increased student enrollments or inflationary increases in fixed costs such as utilities and health benefits. As a result, the university must take approximately $100 million in cuts internally to address the shortfall. Additionally, given the immediate and near-term projections regarding the state economy, the state Department of Finance recently informed UC that, as part of the State’s effort to achieve $340 million in additional savings across all state agencies, the University will need to achieve another $33 million in savings to offset reduced state funding, creating a total of $148 million in budget reductions the University will need to make in the 2008-09 year as a result of the final state budget. Cost savings of $28 million in the Office of the President in Oakland are also included in the budget. (See www.universityofcalifornia.edu/news/article/18804 for details).

Although UC avoided deeper cuts than other entities, the final state budget for 2008-09 essentially means that UC received no increased funding for core costs, including employee compensation and benefits. By keeping the University's funding flat relative to last year, the University will not be able to offer systemwide salary increases to employees, and UC will need to defer progress on changes to the faculty salary scales for 2008-09 (wages for union-represented employees are subject to collective bargaining, and obligatory merit increases for faculty will follow UC policy).

Competitive pay and benefits for employees is one of the University’s top priorities, as it is fundamental to rewarding UC’s hardworking employees for their many contributions to the University, and it is critical to UC’s ability to attract and retain quality personnel. Throughout the budget process, UC continually stressed to the legislature and the governor the importance of competitive salaries and benefits, and we are very disappointed this year’s final budget does not provide funding for salary increases.

Fortunately, medical and retirement benefits for UC employees remain among the best in the country. As was just announced, the University has taken extra steps regarding 2009 employee medical insurance rates to help shield employees from escalating health-care costs. Not only is UC continuing to pay the vast majority of next year’s premium increases, UC is applying a special one-time subsidy to defray employees’ share of premium increases. UC is also continuing its salary-based approach to rates so lower-paid employees pay lower monthly premiums. The net result will be that many employees will see either decreases or only modest increases in their monthly premiums, for the exact same benefits as last year – no benefits are being cut. (Health insurance rates for union-represented employees are subject to collective bargaining).

The University values deeply the many contributions of its faculty and staff and their ongoing dedication to the University, especially during these difficult economic times, and UC will continue to impress upon state officials the critical importance of competitive salaries and benefits for all employees.

Additional Information

UC Budget information: http://www.ucop.edu/news/budget/welcome.html

UC Benefits: http://atyourservice.ucop.edu/