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University of California Santa Barbara

Memos to Campus

Campus Budget Update

March 29, 2011

TO THE CAMPUS COMMUNITY
 
Dear Colleagues:
 
I know that all of us have been following closely the budget discussions taking place throughout California as our state struggles with a $25 billion deficit. In January, Governor Brown announced plans to cut UC's funding by $500 million as part of his 2011-12 state budget proposal. This legislation passed last week. He also warned that the cuts could go even deeper if the proposed tax extensions are not enacted.
 
We Confront the Budget Challenges

 
What does this mean for UC? For the first time in the history of our university, the funds provided by our students through their tuition will surpass the state's contribution. Over the past 20 years, state support for per-student educational costs at UC has fallen 57%, adjusting for inflation. These cuts take UC back to a level of state funding equivalent to 1998-99, when our university was serving 73,000 fewer students than the 235,000 enrolled today.
 
What does this mean for our campus? UC Santa Barbara's portion of the $500 million cut was initially announced as $39.6 million. However, the UC Office of the President has indicated that they will absorb a portion of the cut, in an effort to soften the impact on campuses; we expect that this will reduce our campus's budget gap to approximately $35 million.
 
This $35 million cut is on top of the $116 million net reduction in state funding for our campus over the past decade. The impact of such drastic reductions has been felt painfully by every member of our UCSB community, and in every department and unit across our campus. As we move forward to address this new challenge, I would like to take this opportunity to sincerely thank each and every one of you for the sacrifices you have made, and for your careful stewardship of our campus resources. Our shared dedication to our university and our support for each other during these challenging times are a daily demonstration of the values that define us and make UC Santa Barbara such a special community.
 
As part of our ongoing, collaborative efforts to find solutions for our campus, I have been working closely with our Coordinating Committee on Budget Strategy, which is co-chaired by Executive Vice Chancellor Gene Lucas and Academic Senate Chair Henning Bohn and includes faculty, student, and staff representatives. I have also been discussing this issue with our faculty, staff, and students on a daily basis, as well as with the Regents, the President, and senior staff at UCOP; with alumni, donors, and other campus supporters; and with our elected officials in Sacramento.
 
When I meet with legislators, I emphasize the many ways in which our university contributes to a better quality of life for all Californians. I ask them to find ways to minimize the damage next year, and most of all, to commit to longer-term funding stability for our university. In the weeks and months ahead, I will continue to work energetically with our colleagues, students, alumni, and supporters to advocate for our university in Sacramento and across the state, and to seek ways to ease the impact of these cuts.
 
Our Campus's Strategies and Actions
 
On top of the $35 million reduction for 2011-12, our campus must also absorb a number of unfunded expenses, such as increased employer contributions to pensions and health benefits, increased maintenance and utility costs, and faculty retention and replacement (currently about 20 searches per year).
 
Although we did not know until recently the size of our budget reduction target for 2011-12, we have anticipated and planned for a severe budget cut, and we have already taken many actions to address it. Our strategies include applying both temporary and permanent budget reductions and revenue increases over a multi-year period. Some of the steps we are taking to fill the gap include increased fundraising, energy savings through decreased consumption and increased efficiency, elimination of off-campus leases, reductions in staff (primarily through retirements and normal attrition, as we have done in the past), use of revenue from previously approved systemwide student fee increases, administrative support assessments on non-state units, and gift-tax assessments. These and other actions are all aimed at cutting costs, using existing revenues efficiently, and bringing in additional revenues. Furloughs are not among the temporary measures we are considering.
 
At this point, we have identified a combination of one-time and permanent measures, such as those described above, to reduce the budget gap for 2011-12 to about $7 million. While we will continue to explore ways of reducing this further, we know that additional permanent solutions in both budget reduction and revenue generation will be required for subsequent years. We will continue to work vigorously with elected officials, colleagues at UCOP, and our campus community to identify short-term and long-term solutions, and we will consult widely as we move forward.
 
As one example of our long-term strategy, we have made significant changes to the way our campus operates, and are seeking to achieve future savings through our campuswide "Operational Effectiveness" initiative, which aims to reduce costs through streamlining and consolidation. (More information about the OE initiative is available at http://oe.ucsb.edu.)
 
A revenue enhancement strategy our campus is actively pursuing is to incrementally increase the number of out-of-state and international students on our campus, while maintaining our commitment to enroll California students at the level funded by the state. Currently, non-resident students make up about 5% of our total undergraduate population. (By comparison, at other AAU public universities, non-resident students make up, on average, 25% of their entering freshman class.) Last academic year, 1,250 in-state students enrolled at UCSB were unfunded by the state; for the current academic year, we estimate that some 575 in-state students are unfunded by the state. If we were to replace these 575 unfunded, in-state students (3% of our total undergraduate population) with non-resident students, we would have an additional $12 million to help us close our budget gap.
 
Each weekend this month, my wife, Dilling, and I have traveled with a small team of admissions counselors, faculty, staff, and student volunteers to host our annual regional receptions. These informational programs have been very successful in helping us recruit a high-achieving and diverse in-state student body. This year, in addition to holding such programs within California, we are also reaching out to students and families in Washington, D.C.; New York; Chicago; and cities abroad in order to recruit top non-resident students.
 
Our Commitment to Excellence and Diversity

 
In spite of the budget challenges we face, our priority has been, and continues to be, to fulfill our teaching and research missions without compromising quality. We are unwavering in our commitment to excellence and diversity, and to providing our students with the education they deserve. Our processes of consultation and shared governance are sources of great strength for UC Santa Barbara. I am deeply grateful for the hard work and extraordinary dedication of our faculty, staff, and students, as well as for the support and advocacy efforts of our alumni, Trustees, donors, and friends. Together we will, once again, meet the challenges ahead.
 
Sincerely,
 
Henry T. Yang
Chancellor