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Academic Senate Budget Overview

Presented to The Regents


May 17, 2007

With Sept 2009 Update


(this last part does not represent the
Views of the Academic Senate)
Standard Storyline:
Ups and Downs, but Long-term is Up
What’s Wrong With That Picture?

 It doesn’t adjust for:


 inflation
 enrollment growth
 costs of academic innovation
 It doesn’t explain faculty
experience of campus erosion
Widening Funding & Quality Gap

State and UC General Funds


and Student Fees
Adjusted for Enrollment Growth
A Steady Decline in Public
Investment in a High-Quality UC
State Funds for UC Operations as share of State Personal Income

0.400%

0.350%

0.300%

0.250%

0.200%
1985-86 1987-88 1989-90 1991-92 1993-94 1995-96 1997-98 1999-00 2001-02 2003-04 2005-06

State Funds for UC Operations as share of State Personal Income


The Senate’s Key Questions

I. What is the present and likely future


of UC’s core budget?

II. How can UC make up structural


budgetary shortfalls?
Focus on “Core Campus Funds”
Supporting UC’s Core Educational Mission

 State General Fund


 Student fees
 Endowment payout
 Some private support
 Indirect Cost Recovery on grants
 Miscellaneous
Not Included
(Non-core; carry offsetting expenses)

 Sponsored projects
 Federal
 Business
 Foundations
 Hospitals
 National labs
 Auxiliary enterprises
Three potential budget scenarios

 Extend the Compact?


 Return to 2001 Pathway?
 Last time that UC was relatively healthy
 Return to 1990 Pathway?
 A recent benchmark of educational quality
The Compact permanently reduces the
fraction of core funds the State provides

State Funds / Core Funding

70.0%

60.0%

50.0%

40.0%
2001-2 2002-3 2003-4 2004-5 2005-6 2006-7 2007-8 2008-9 2009-10 2010-11

Actual Data & The Compact 2001-02 funding


So that even with large annual fee
increases, UC’s core budget is
permanently cut by about 25%

State Funding: The Compact vs. 2001-level Funding


(Millions)

6,000

5,000

4,000

3,000

2,000
2001-2 2002-3 2003-4 2004-5 2005-6 2006-7 2007-8 2008-9 2009-10 2010-11

Actual Data & The Compact 2001-02 funding


Increased Burden for
Students and their Families

Core Funds 2001-02 Core Funds 2004-05

5.1%
3.9% 6.4% 4.3%
4.6%
4.4%
8.7%
11.1%
45.7%

16.7% 60.9%

28.1%

State Funds Fees & NRT ICR Endowment Private Other State Funds Fees & NRT ICR Endowment Private Other
“Futures Report” Findings
1. The Compact will not allow UC’s state funding to
recover to “2001 Pathway,” but locks in decline
2. The gap between returning to the 2001 Pathway and
the 07-08 budget request is $1.1 billion
3. A return to traditional UC quality (1990 Pathway)
would require over $2 billion in additional funding

Re Key Question I: Does the Compact allow the core UC


budget to recover to pre-cut levels?
Answer: No, not by a long shot
Key Question II: How could UC make up for
continued shortfalls in state funding?

To reach 2001 Pathway:


 Increases in federal and private research funding?
 Relatively small future increases, and research is costly

 Private fundraising?
 Need to raise $25 billion in three years, on top of current $7
billion endowment, with no decrease in state funding
 Fee increases?
 If state funding maintained but not increased, need to raise
fees to $15,000-18,000 per year by 2010

Answer: Only huge fee increases could make up for lagging state
funding
UC at the Crossroads 2007
1. Extended Compact: fees up ~8% per year, no
recovery to 2001 Pathway
2. 2001 Pathway: attainable, but at current level
of state funding this requires raising fees to
$15-18,000 in three years and large
continuing increases thereafter
3. 1990 Pathway: would restore full-quality core
operations, but remains way over the horizon
Senate Conclusions 2007
1. UC’s quality depends on getting back to 2001
Pathway

3. Getting there with fee increases would change


UC’s character to preserve its quality

5. Preserving UC as a great public university


requires a greater investment of public funds
July Budget 2009
 The Governor and legislative leaders
reduced UC’s state funding from $3.2
billion to $2.6 billion
 This is about the level of 1999-2000, when
UC had 165,000 students instead of
today’s 220,000 students
Budget Devastation: UC is on Path 6, $2.5
Billion below normal growth from 2001.
The Conclusions are Obvious
 UC cannot fulfill any of its public missions
without rebuilding its public funding.
 UC needs a Compact with the students of
California: set a minimum public
investment of funds per students (2007
levels to start), and fight for it tooth and
nail.