SUBJECT:

Proposed 1997-98 Salary Plan for UC Faculty and Staff

As you may be aware, the 1997-98 California State budget signed into law by
Governor Wilson on August 18, 1997 provides an overall increase of 5.9% in
funding for the University, but also includes a $12 million one-time
undesignated budget cut. The University's 1997-98 budget plan had been
developed last fall on the basis of the Governor's four-year compact with
higher education and received widespread support during Legislative budget
hearings. Unfortunately, late in the budget process, it became necessary
for the Legislature to make last minute cuts of more than $1.5 billion to
the overall State budget as a result of a court-ordered State payment to
the Public Employees Retirement System (PERS). Restoration of the $12
million cut on a permanent basis will be a top priority in the University's
1998-99 budget request.

The University has been studying options for absorbing the $12 million cut
on a one-time basis for 1997-98. Based on the normal administrative
consultation process, including a discussion with the Regents at their
September 18-19 meeting, the following proposal for 1997-98 faculty and
staff salaries has been formulated.

The proposed plan is to provide the level of faculty and staff salary
increases originally proposed in The Regents' and Governor's budgets for
1997-98, but to delay the distribution of funding for general salary
increases originally proposed for October 1, 1997 by one month to November
1, 1997. This measure, which would help to meet roughly half of the $12
million budget cut, will be taken along with additional one-time cuts in
other areas of the operating budget to meet this year's shortfall.

Under the proposal, eligible academic employees not covered by collective
bargaining agreements would receive a 2% general increase (range
adjustment) effective November 1. The additional 3% parity increase for
eligible academic employees, which has been a planned component of the
University's four-year plan to restore faculty salaries to the average
salary level at the eight comparison institutions by 1998-99, would be
effective November 1. The normal schedule of merit increases for eligible
academic employees not covered by collective bargaining applies this year.

For non-exclusively represented staff employees in merit-based pay plans,
the fund pool available for merit increases based on performance--a
combination of range adjustment funds, merit funds, and campus turnover
savings--would be 4%, effective November 1.

Funding for staff incentive awards was allocated on a permanent basis in
1994-95 to each campus in the form of a block grant covering eligible
staff. That funding will continue to be available for awards in 1997-98.

For exclusively represented academic and staff employees, salary actions
are subject to the terms of existing collective bargaining agreements,
and/or meeting and discussing, consulting, or conferring in accordance with
the Higher Education Employer-Employee Relations Act (HEERA), as
appropriate.

If you have any questions or comments regarding academic employees, please
contact Steven Ross via e-mail at sross@ucsd.edu or via telephone at
extension 42597. If you have any questions or comments regarding staff
employees, please contact Judy Johnson via e-mail at jjohnson@ucsd.edu or
via telephone at extension 40986. Please provide your questions or
comments by October 24.

Marsha A. Chandler Senior Vice Chancellor - Academic Affairs Steven W. Relyea Vice Chancellor - Business Affairs