SUBJECT:

1994/95 Budget - Provost Massey's Remarks #2

For your information, below is a summary, released by the Office
of the President, of part 2 of Provost Massey's remarks to the
Regents related to the 1994/95 University of California budget.

Margaret F. Pryatel Assistant Vice Chancellor

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REGENTS' MEETING               PRESIDENT J. W. PELTASON
SAN FRANCISCO                PROVOST WALTER E. MASSEY
JULY 14-15, 1994

           University of California

          1994-95 BUDGET OUTCOME

            (PROVOST MASSEY)

_  Turning to the capital budget: We are continuing to work
    with the other segments of higher education, the Department
    of Finance, and the Legislature in an effort to place a
    higher education bond issue on the November ballot. If
    that happens, and if the measure wins passage, we would have
    a 1994-95 capital budget of about $160 million.

_  On the hopeful assumption that there might be a successful
   November bond issue, we are working with the campuses to
   develop a 5-year capital budget that is heavily oriented
   toward seismic improvements and other life-safety measures.

_  If there is no November bond measure, however, or if it
   fails passage, we will have essentially no capital budget
   for 1994-95; and in 1995-96, we might anticipate some
   revenue bond funding but nothing more. In that event, it
   would appear that the bulk of safety improvements will have
   to be delayed until State funds become available.

_  We have just begun to work on the operating budget request
   for 1995-96. We are hoping for a somewhat improved fiscal
   outlook at the State level by then.

_  Our approach to the 1995-96 budget will be generally the
   same as in 1994-95. As we discussed with The Regents last
   October, our goal is to achieve fiscal stability over the
   near-term, through 1997-98, through a combination of State
   funds and student fee income. Enrollments are expected to
   remain essentially stable during the period, so our budget
   proposals can concentrate on holding the line. In essence,
   our goal is to stay even--that is, not lose further ground,
   but see no improvement and no restoration.

_  That was the basis for our 1994-95 budget plan, which seems
   to have met with general approval by the Governor and
   Legislature.

_  Our budget request for 1995-96 will include funds for merit
   salary increases as a high priority. We will also seek to
   keep pace with inflation and workload growth through salary
   COLAs, price increase funds for the nonsalary budget, and
   funds to operate and maintain new buildings coming on line.
   In the instructional budget, we will seek funds for new
   faculty positions as part of a plan to phase in appropriate
   funding for current enrollment levels.

_  We will do our best to hold down the fee increase. How
   successful we are will depend upon what the State is able to
   provide. This year, the State provided alternative funds
   that reduced our need for fee income. We hope we can reach
   a similar compromise next year.

_  We will present a detailed budget proposal to you in October
   for discussion, and in November for approval.