Regents Finalize Budget After Months-Long Delay

After an 85-day standstill, the UC Board of Regents approved its 2008-09 budget last week making sweeping cutbacks and — despite increasing UC operational costs — providing less overall funding than last year.

The state operating budget for the university totals $3.03 billion, down from $3.32 billion in 2007-08.

UC Office of the President spokesman Ricardo Vazquez said the regents’ approval — which arrives weeks after the beginning of the academic year — is later than usual due to the delay of the finalized state budget, signed by Gov. Arnold Schwarzenegger on Sept. 23 a record 85 days late.

“It’s common practice to adjust the [UC] budget to reflect the final budget,” Vazquez said.

Due to cost increases resulting from salary hikes, record student enrollment and other inflated costs such as utilities, the university will be forced to dip into internal savings to cover a $100 million shortfall.

Another $48 million, deficits accumulated from last year’s state cutbacks, will also need to be drawn from internal savings to compensate for the lack of state funds.

UC President Mark G. Yudof said he is disappointed with the “bare bones” budget, which he said does not account for a number of the UC system’s top priorities. He said the regents are concerned that the budget does not account for enrollment growth, improvement of the faculty-to-student ratio or restoration of competitive compensation for faculty and staff.

Yudof said the regents are also disappointed that Schwarzenegger’s line-item veto reduced state appropriations for labor research by $5 million.

“After years of falling state investment in inflation-adjusted terms, the university’s true need for additional resources is well over $1 billion,” he said. “While we understand the state’s immediate financial constraints, strong long-term investment in higher education is critical to California.”

Yudof added that despite the 7-percent educational fee and 10-percent registration fee increases approved in May and the $28 million in cuts from the UC Office of the President included in the budget, additional reductions will be needed to sustain the UC system.

“It is evident that the turmoil in the international and national equity, housing and credit markets will cause continuing erosion in the state’s economy,” he said. “As such, we must view this budget as just the beginning of potential further state budget reductions this year or next year.”

Yudof also advised individual campuses — which are working to reduce the funding gap through cuts — to guard instructional and preparational student programs. The 10 UC campuses have been advised to cut back on hiring as well as travel and consulting services, as UCOP is currently doing. Reducing energy costs by increasing efficiency is also a major component of the systemwide plan, he said.

Despite the financial challenges that the university currently faces, some areas of spending were actually expanded in the new budget. Student mental health services and financial support for graduate students will grow, and student fee increases will be reduced or eliminated for students who meet federal low-income standards.

Although the new budget is roughly equivalent to a 5-percent cutback in state support and more reductions are looming, Vazquez said students should not worry about fee increases just yet.

“I think it would be premature to talk about [increases],” he said. “The regents have to start discussing their priorities.”

According to Yudof, the final spending plan is far from finished. California legislators may revisit this year’s state budget in January, which would in turn affect the UC budget. He said the regents will continue to push for state investment in education and research, which they believe to be potential factors in the state’s economic recovery.