Friday, January 23, 2009
University of California braces for impact from state budget cuts
San Francisco Business Times - by Chris Rauber
The University of California, and UCSF specifically, can expect to take a large and long-lasting hit when an emergency state budget is finalized, according to an internal UCSF report by retiring Chancellor Michael Bishop.
In that Dec. 23 report, Bishop said UC has already absorbed a $48 million cut in state funding during the current fiscal year, which began July 1, and anticipates cuts this year to total “at least $115 million.” In addition, Bishop said unfunded enrollment growth and increased fixed costs will “add another $100 million or more to the financial burden.”
“Looking further ahead, (UC) President Mark Yudof has advised that UC can anticipate cuts of as much as 10 percent in each of the three coming years, and has directed campuses to plan accordingly,” UCSF’s chancellor reported. In addition to those cuts, Ricardo Vazquez, a spokesman for the University of California’s Office of the President, noted Jan. 20 that Gov. Arnold Schwarzenegger has requested a further $65.5 million mid-year cut to the system’s budget, which would also apply to the following fiscal year, but that isn’t official at this point. The system also plans to slash freshman enrollment next fall.
The financial pressures are heightened by UC’s need to resume making contributions to the retirement plan this year, after 18 years where investment income took care of that, and “substantial increases in health benefit costs,” which Bishop said would affect both the university and its employees.
The University of California system is based in Oakland, and it operates four major campuses in the greater Bay Area: UCSF, UC Berkeley, UC Santa Cruz and UC Davis. The system headquarters employs nearly 1,900, UCSF has 21,567 employees, UC Berkeley employs 24,700, UC Santa Cruz about 7,600, and UC Davis about 18,600 full-time workers, according to various UC web sites.
Early last month, the Office of the President, the system’s headquarters, announced plans to slash $60.4 million, or 21 percent, from its 2008-2009 budget, along with 500 full-time-equivalent jobs. That’s on top of $8.7 million in cuts and 97 eliminated jobs during the first four months of the fiscal year. UCOP’s goal is to slash another 275 or more jobs and $25 million from its budget by the end of the 2009-2010 fiscal year.
UCSF impacts
At UCSF, state funding represents just 9 percent of the overall operating budget. But the state helps fund crucial areas such as maintenance and operation of facilities, utilities, and salaries for many staff and faculty, the chancellor said.
Eric Vermillion, associate vice chancellor for finance, said UCSF had been anticipating cuts in the range of 3 percent to 7 percent, and that it looks like 6 percent will be the final figure. “We need to plan comprehensively, (but) we can still do our mission (if) we plan carefully,” Vermillion said.
Although state officials said last month that more than 2,000 California public works projects were halted due to the budget crisis, two ongoing projects at UCSF are safe, at least for now: the cardiovascular research building at the Mission Bay campus and the stem cell research center at the Parnassus campus, Bishop said.
UCSF’s executive budget committee is working on a multi-year plan to cope with the crisis, which Bishop said could take three or four months to complete. “We are planning against worst-case scenarios, based on both our own assessment of the circumstances and advice from the Office of the President,” he said.
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