SUBJECT:  2001-02 Budget Plan

For your information, the following is the official news release from the Office of the President regarding the 2001-02 Budget Plan.

If you have any questions concerning this notice, please contact Dawn Buttrell at 534-3482.

                                                Margaret F. Pryatel
                                                Assistant Vice Chancellor

2001-02 BUDGET PLAN INVESTS IN ACCESS TO HIGH-QUALITY EDUCATION AND PROGRAMS TO CONTINUE FUELING THE CALIFORNIA ECONOMY

The University of California Board of Regents today (Nov. 16) approved a 2001-02 budget proposal that focuses on expanding UC's contributions to the California economy, improving student access to a UC education, and preserving high-quality teaching, research and public service.

The budget proposal places special emphasis on increasing UC staff employee salaries that lag the marketplace, maintaining competitive faculty salaries, and improving financial support for graduate education. It also would provide the second installment of funding in a multi-year program to strengthen undergraduate education, while keeping mandatory systemwide student fees unchanged.

"This budget reflects UC's continuing commitment to offering a place at the university to California's high-achieving students and providing them with an education of the highest quality," said UC President Richard C. Atkinson. "It also addresses the needs of our hard-working employees and furthers UC's investments in the economic health and well-being of California as a whole."

UC's state-funded operating budget would rise 7.7 percent to $3.45 billion under the budget plan. The university's total budget -- reflecting funds from all sources, including federal funds for the three national laboratories managed by UC -- would be approximately $15.7 billion. Excluding the labs, the total budget would be approximately $12.5 billion.

The university's state budget request is built on a "partnership agreement" reached this year with Gov. Gray Davis. The partnership provides for predictable annual increases in state General Fund support for UC, along with the university's commitment to meeting accountability goals in specific areas of performance, which the university is currently meeting or exceeding.

Below are highlights of the 2001-02 budget proposal.

Expanding UC's contributions to the California economy:

The university is placing a high priority on increasing financial support for graduate education this year. California's success in the global economy is tied to the research innovations and trained workforce provided by UC graduate education programs, but enrollments have not kept pace with the state's needs. The budget calls for a multi-year effort to increase UC graduate enrollments and expand financial support for graduate students.

Also, the budget includes funding for 1,000 additional undergraduate and graduate students in engineering and computer science, part of an eight-year plan to expand these enrollments by 50 percent to help meet California's high-tech workforce needs. In addition, UC plans to increase enrollments in its teacher credential programs by 500 students in 2001-02, part of a four-year effort to double these enrollments and provide more well-trained teachers for California's classrooms.

The budget requests $75 million as the second of four installments of state funding for the California Institutes for Science and Innovation, three new research facilities that will be located on UC campuses. These institutes will bring together researchers from a variety of disciplines to develop the next generation of knowledge in specific scientific fields that are key to the future of the California economy. The locations of the institutes will be announced later this year.

If state money is available, the budget also requests funding for several research initiatives in areas relevant to the state's economic health and well-being, including environmental science, engineering and computer science, pest management, public health and demographic change.

Ensuring access for all UC-eligible students:

The budget requests the funding necessary for UC to continue to admit all UC-eligible students and provide them with a high-quality education. The budget includes funding for an additional 5,700 students in 2001-02, or enrollment growth of 3.5 percent. This growth is part of a 12-year, population-driven enrollment expansion that is expected to add 63,000 UC students between 1998-99 and 2010-11.

The budget requests $4 million above the basic partnership budget to expand programs aimed at increasing the number of students who transfer to UC from community colleges. These funds would increase the number of counselors providing guidance about the transfer process, expand a computerized information system aimed at transfer students, and develop new approaches to helping students become transfer-ready.

In addition, the budget requests funding above the partnership budget to expand outreach and student retention programs. These include programs to prepare students from educationally disadvantaged backgrounds for graduate and professional school, to expand outreach services to K-12 students and teachers in the San Joaquin Valley and other rural areas of the state, and to provide more counseling and other programs aimed at keeping UC students on track toward a degree.

For the seventh consecutive year, mandatory systemwide student fees would not increase under the budget plan. These fees would remain at $3,429 for resident undergraduates and $3,609 for resident graduate academic students, excluding miscellaneous campus-based fees. Between 1998-99 and 1999-2000, mandatory systemwide fees actually decreased 10 percent for resident undergraduates and 5 percent for resident graduate academic students.

Nonresident tuition would increase 4.5 percent ($460), consistent with state policy that ties tuition for out-of-state students to the actual cost of instruction and to the nonresident charges at comparable universities.

The budget also places an emphasis on efforts to strengthen the undergraduate educational experience for UC students overall by requesting an $8 million increase to the $6 million provided in the 2000-01 year for this purpose. This funding supports such efforts as reducing class sizes, offering additional lower-division seminars, providing more undergraduate research opportunities and offering more academic advising.

Finally, the budget requests state support for summer instruction at three campuses -- UC Berkeley, UCLA and UC Santa Barbara -- which are taking the lead in expanding summer coursework as a response to enrollment growth. Historically, the state has not funded summer instruction. Additional campuses would be phased into this program in subsequent years.

Providing competitive compensation for UC employees:

The budget requests funding for an average 2 percent employee salary increase, along with funding for merit increases for eligible employees.

In addition, UC is making a substantial effort in the 2001-02 budget to improve compensation for staff positions where pay levels currently lag the market. The budget requests an additional 2 percent funding to bring these salaries closer to levels that are competitive in the marketplace. Of this $24 million request, $14 million is above the basic partnership budget and thus not guaranteed. UC will argue for the full amount, however, as an important means of attracting and retaining talented staff.

This effort comes on the heels of a similar $19 million augmentation in the 2000-01 budget for salaries of lower-paid staff employees. Actual distribution of salary increases varies by compensation program and is subject to collective bargaining requirements.

Faculty would be given an additional 1 percent increase to keep their salaries competitive with those of UC's comparison institutions across the country.

Additionally, UC is requesting $20 million in one-time state funds for the planning and construction of expanded childcare facilities at UC campuses. These facilities currently serve about 2,000 children of UC staff, faculty and students, but the demand for these services is much greater.

Addressing needed facilities improvements:

The Regents approved a $203 million bond-funded capital improvements budget, consistent with voter-approved Proposition 1A. The capital budget includes projects to replace aging facilities, renovate seismically vulnerable buildings and construct new facilities for enrollment growth at UC campuses. The university also is seeking $160 million in state General Fund money for construction of the first buildings and infrastructure at UC Merced.

The operating budget proposal approved by the Regents also requests additional funding for building maintenance, instructional equipment, instructional technology and library materials, all areas that have suffered from recurring budget shortfalls.

The operating and capital budgets serve as UC's annual funding request to the governor and Legislature. Final university spending decisions for the 2001-02 fiscal year will be made after the governor and Legislature complete the state budget process next year.