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University of California Santa Barbara

Memos to Campus

Our Challenging Budget Climate

December 15, 2008

TO THE CAMPUS COMMUNITY

Dear Colleagues:

The turmoil in the global economy is having significant fallout in California, where the Governor and the Legislature are now trying to address the worsening budget picture and the deepening state deficit. While we had anticipated that the impact of these developments on the University of California would be significant, we now expect that impact to be quite severe. I am writing to update you on the situation and brief you on pending developments.

To help the campus prepare for budget cuts, the Coordinating Committee on Budget Strategy that I appointed has been working diligently for several months. Its work, however, has been complicated by the growing size of the anticipated reduction to the campus. We expected a cut of about $8.8 million in permanent budget funding at the beginning of Summer 2008. This grew to $12 million in September, and now has reached at least $16 million. This cut is in the recurring budget—what we call the “permanent” budget—and will lower our base budget for future years. Moreover, we expect additional cuts in the permanent budget beyond this year.

During the past six years, from 2002 to 2008, we have had budget cuts every year except one. These cuts have left our campus extremely lean. Our state funding as a percentage of total campus annual expenditure has declined from 47.2% in 2001-02 to 35.6% in 2007-08. With this additional $16 million reduction, we are now facing an unprecedented budget crisis.

The impact of this current budget cut seems even larger because—for the moment—our campus is still “protecting” a significant part of the permanent budget from cuts. Components protected include: student financial aid, health insurance and tuition remission for teaching assistants, ladder rank faculty salaries, academic preparation, and purchased utilities. The protected areas represent 52.7% of our permanent state and student fee budgets.

To illustrate the magnitude of the current cut: $16 million is equivalent to the salaries and benefits of 160 faculty FTEs or 210 staff positions. It is $3.5 million more than the total supplies and equipment (S&E) budget of the entire campus. These examples give a feel for the enormity of the challenge that we face. Please be assured that all of our budget-reduction decisions will be based on a carefully planned strategy developed through consultation and collaboration. We all value the crucial work of our staff, faculty, and students, as well as the collegial community that makes UC Santa Barbara such a special place to work, study, and conduct research. We will do everything we can to maintain this community and the integrity of our teaching and research programs. However, there is no way to avoid painful decisions.
 
Principles Guide the Process

In all its deliberations, our Coordinating Committee on Budget Strategy has been guided by a set of planning principles developed with the long-term interests of our campus in mind. These principles and other budget updates can be found on our website at http://www.ucsb.edu/campus-topics/budget.

We soon will propose two sets of strategies for the campus. In the context of revenue enhancement strategies, we will consider how our non-state-funded units and operations can help shoulder a fair share of the budget cuts. We also will provide a set of budget reduction targets to vice chancellors and deans, who will work with their departments and divisions to develop plans to implement them. We can expect that these budget reduction targets will be in the range of 5-12%. These are significant, and serious, reductions. We recognize how difficult this process will be. We ask that you approach this process with a spirit of community as we all work together to preserve what we have achieved in building UC Santa Barbara to what it is today.

At the same time, let me pledge that my colleagues and I will step up our efforts to raise funds from private sources, even in this very challenging economic environment. We have had significant success in such efforts over the past several years, and we know that the great many donors who have invested in UC Santa Barbara, as well as those who will do so in the future, will appreciate and support our vigorous efforts to protect and enhance what we have achieved.

Maintaining Quality, Ensuring Excellence 

In spite of the budget reductions of recent years, our campus has managed to maintain and make accessible a high-quality educational experience for increasingly qualified and motivated students. We also have expanded our research activities, furthered the international recognition of our outstanding faculty, improved the diversity of our campus, and successfully raised a half-billion dollars in private support. In addition, we have made major improvements to the campus’s infrastructure, provided new housing for graduate students, added many state-of-the-art buildings, and moved forward with our plans for faculty and staff housing and the newly acquired Devereux property. These accomplishments are due in large part to the extraordinary efforts of every member of our campus community. UC Santa Barbara has indeed grown into a top-tier research university, one that is envied around the world. Looking forward, we have a strong strategic academic plan for the campus and accompanying plans for future facilities and housing.

We remain optimistic about our future. However, that future depends in part on our ability to respond to our budget challenges with vision and with careful, strategic decisions.

I would like to thank the members of our Coordinating Committee on Budget Strategy and co-chairs Executive Vice Chancellor Gene Lucas and Academic Senate Chair Joel Michaelsen for their dedication, hard work, and wise counsel.

Together we have overcome budget challenges in the past, and I am confident that we can overcome them once again. Although what confronts us today is indeed a crisis, it is also an opportunity to focus on our core mission and to engage our entire campus community in ensuring a bright and exciting future for UC Santa Barbara. I thank you for your understanding, patience, sacrifice, and dedication to our campus.

I invite you to e-mail or call me or the members of the budget strategy committee if you have any comments or questions.

Sincerely,

Henry T. Yang
Chancellor