OFFICE OF BUDGET OPERATIONS, PLANNING & ANALYSIS
July 6, 1993
SUBJECT: Impact of the 1993-94 State Budget
ALL AT UCSD
For your information, following is the official news release from the Office of
the President - University Relations regarding the impact on the University of
California of the 1993-94 State budget signed by Governor Wilson on
June 30, 1993.
If you have any questions regarding this notice, please call me at 534-3480.
Corinne K. Foster
Director
$50 MILLION RESTORED TO UC BUDGET, REDUCES CUT TO $88 MILLION
OAKLAND -- The University of California will be able to
significantly lower next year's student fee increase and reduce the
size of a one-time pay cut for faculty and staff under the 1993-94
state budget signed last night (June 30) by Gov. Pete Wilson.
The $38.5 billion state general fund budget provides $1.794
billion to UC, $50 million more than originally proposed by the
Governor, but still 4.7 percent ($88 million) less state funding
than the University received this year.
The 1993-94 budget will mark an unprecedented third straight
year of state budget cuts for UC, returning the University's state
support back to what it was in 1986. In those seven years,
inflation has increased by 32 percent and UC has added 10,000 more
students.
"We are grateful that in these difficult budgetary times the
Governor and the Legislature have seen fit to reduce the proposed
cut in the University's budget," said UC President Jack W.
Peltason. "We appreciate the efforts that many individuals made to
shield the institution from more devastating cuts, although it
should be remembered that another net reduction in UC's state
general fund is another painful reminder that much more needs to be
done to preserve access to a quality education for future
generations of students."
The Board of Regents will still need to act at its July
15-16 meeting in San Francisco, but it is the intent of the
President to recommend to the Regents that the University follow
the Legislature's and the Governor's desire to use about half of
the restored funds to help cut next fall's student fee increase
from the previously planned $995 to $630 a year. The remainder of
the $50 million will be used to reduce the planned one-time 5
percent pay cut for faculty and staff. Details on the pay cut
change are yet to be determined.
"We still face a significant budget cut next year that will
cause painful actions within the University to reduce spending,"
said William B. Baker, vice president for university and external
relations. "Nonetheless, the move to restore some of the funds is
heartening news. I believe it reflects a growing consensus that
higher education has been hurt dramatically the last couple of
years and needs to be given a higher priority."
Since 1990-91, state funding for the University has fallen
about $900 million below normal funding increases for inflation,
fixed costs and workload growth. Student fee increases have made up
about 26 percent of the shortfall with the remainder of the savings
coming from workforce reductions, a two-year suspension of
cost-of-living raises for faculty and staff and next year's
one-time cut in pay.
Thanks to the restored funds, the student fee increase for
1993-94 will be reduced from 33 percent to 21 percent. The average
fees for resident undergraduate students will go from $3,044 to
$3,674 a year, including miscellaneous campus fees.
About one-third of the $94.5 million raised from the fee
increase will be used to maintain UC's commitment to cover the fee
increase for needy students.
In addition, the state budget contains a $51.2 million
increase in the state's Cal Grant financial aid program to help
needy students cover both last year's and next year's fee
increases, as well as restore a 15 percent cut made in 1992-93.
Even with the partial restoration of funds, the 1993-94
budget falls $193 million short of what the University would have
needed to cover normal cost increases. As a result, several actions
will still be needed to balance the budget beyond the reduced fee
increase and the one-time salary cut, which will be the first time
the University has had to cut salaries since 1933.
Campus and Office of the President budgets will be cut
another $35 million on top of the $345 million they have already
been cut since the state began reducing funding for the University
in 1990-91.
Previous cuts have eliminated funding for over 5,000 jobs.
This new round of cuts will eliminate funding for another 1,000
positions. In applying the cuts, every effort will be made to
protect instructional programs. A combination of a new voluntary
early retirement program, attrition, layoffs and program cuts will
be needed to balance the budget. The early retirement program takes
effect for staff Nov. 1, 1993 and for faculty July 1, 1994.
The Office of the President will take the biggest cut in
this latest reduction. Its budget will be reduced by 10 percent or
about $5 million next year, with another 10 percent cut planned for
the following year. In addition, a portion of the $35 million cut
will be specifically targeted to hospitals and clinical teaching
programs.
Cuts will also be necessary in a wide range of
expenditures, including library books and classroom equipment.
Health benefits for employees will be capped at the lowest cost
Health Maintenance Organization (HMO) plan with employees picking
up all the added cost for higher-priced options.
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Contact: Mike Lassiter (510) 987-9200