The University of California will likely face “”financial challenges”” when making upcoming budget appropriations for the 2002-2003 fiscal year, according to a statement released by Chancellor Robert C. Dynes on Nov. 1.
Dynes’ statement came just a week after Gov. Gray Davis issued executive orders requiring state agencies to freeze the hiring of employees and to prepare for budget cuts of between $8 billion and $14 billion in the upcoming year.
“”Currently, all of the campuses are reviewing their budgets,”” said UC Office of the President spokesman Paul Schwartz. “”They will see how they can best accommodate the governor’s request without undercutting the quality at the University of California.””
The Oct. 23 executive order does not directly require the University of California to freeze hiring because it is not an official state agency — the UC Board of Regents governs the UC system. However, both the California State University and California community college systems report directly to state legislature, so the policy directly applies to them.
Still, UC President Richard C. Atkinson has requested that UC chancellors comply with the executive orders by using caution when engaging in upcoming financial commitments. Dynes indicated that he is heeding Atkinson’s advice.
“”[The UCs] have always cooperated with the state when it has faced a budget downturn, and we certainly expect to do so again,”” Dynes stated. “”It behooves us now to do whatever we can do to slow spending. I have asked each vice chancellor to begin developing … tactics to generate savings and budget reductions.””
Margaret F. Pryatel, assistant vice chancellor of resource management at UCSD, said state officials saw that California was on the verge of an economic decline based on last year’s drop in capital gains and stock options — income sources that have accounted for up to 25 percent of the annual revenue of the state’s general fund.
This summer, Davis requested that all state agencies prepare scenarios that would account for budget slashes of 3 percent, 5 percent and 10 percent. In October, the governor again requested that the agencies hypothesize how a 15 percent reduction in budget funding would affect them. Days later, he delivered the executive orders.
The University of California received 21 percent of its revenue from state funding last year. Because it is such a significant revenue source, there is speculation that a combination of program cuts and registration fee increases will be made. In the past, the state has subsidized student fee hikes.
Pryatel said UC Vice President of Budget Lawrence C. Hershman has had a discussion with the UC Regents about funding for the next fiscal year.
“”The strategy he has suggested is to cut the programs that are not part of our core mission,”” she said.
The UC Board of Regents will meet Nov. 14 and Nov. 15 in San Francisco. The response to the budget situation is one of the topics on the agenda.
UCOP is working with the State Department of Finance to solve the budgeting problem. Eleven percent of the state’s general fund is allocated to the University of California.
