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University of California Santa Barbara

Memos to Campus

Campus Budget Update

June 3, 2003

TO THE CAMPUS COMMUNITY


Dear Colleagues:

The financial challenges now facing the State of California are very serious, and they will be with us for some time. The University of California, like other state agencies and institutions, has both curtailed spending and begun the process of developing plans to cope with diminished resources for the foreseeable future.  In response to the funding shortfall in the current fiscal year (FY 2002-03), the state instituted mid-year budget reductions. Because our campus had anticipated a down budget cycle, we were able to provide centrally one-time funding of $4.9 million to mitigate the impact of those mid-year reductions and allow departments ample time to plan.

For fiscal year 2003-04, the state budget deficit is currently estimated at $38 billion, up from the $35 billion estimated in January.  The Governor’s May Budget Revision continued to propose a UC cut for next year of approximately $373 million.  As President Atkinson noted in his recent budget message to the campuses, the fact that the Governor did not propose additional cuts in UC’s budget “signals his commitment to the University and his recognition of the deep impact our programs have on the economy and quality of life in California.”

Our campus recently received preliminary reduction targets for FY 2003-04 and we are now planning for permanent reductions totaling $13.4 million. The next few weeks will be very important as the state Senate and Assembly work to respond to the Governor’s budget proposal and a final state budget is negotiated.  It is important to remember that final decisions on the state budget are yet to be made and the campus reduction target may still increase.  In fact, a number of budget scenarios involving further reductions are currently being reviewed by the legislature.  Even with this uncertainty, some things are quite clear: We must look for a package of solutions to address this budget challenge, and the reductions will impact all areas of the campus.

Every program area – including academic support, administration, athletics, facilities maintenance, libraries, and student services – is facing significant reductions.  The reductions to instruction and research, while smaller on a percentage basis, will still be painful, as they will be made in conjunction with reductions in support services and rising enrollment. In addition to the state budget reductions, UCSB will need to contend with higher costs in areas such as health-care benefits, energy, and maintenance of new space for which we are receiving no new state funding. Our students are also being asked to make sacrifices of their own through significantly higher fees.

In February of this year, after broad-based consultation, I announced the establishment of the “Coordinating Committee on Budget Strategy” co-chaired by the Acting Executive Vice Chancellor, Gene Lucas, and the Chair of the Academic Senate Council on Planning and Budget, Joel Michaelsen.  The committee has a broad and balanced membership—administrators, leaders of the Academic Senate, faculty, staff, and graduate and undergraduate students—and is truly representative of our campus community. (My memo announcing the committee includes a list of its members and can be found on the budget update page of the UCSB web site, http://www.ucsb.edu/campus-topics/budget.)

The committee has been working diligently since early March and has recently completed a set of principles to guide the budget-planning process on our campus. These principles (also available on the web site) underscore the need to preserve academic quality and access for our students. They state, for example, that budget cuts should be made in ways that cause “minimal disruption of student academic programs to protect the ability of students to graduate in a timely manner.” The principles also illustrate our campus’s commitment to openness, communication, and consultation in this planning process, and our determination to be strategic in how we go about the task of managing in an era of diminished financial resources.

These principles were used by the committee to develop initial budget-reduction targets for all the Vice Chancellors, and will now be used by them to determine targets for provosts, deans, directors, and others within their control points.

Based on the committee’s recommendations, budget-reduction targets have been established. They range from 3% for the Executive Vice Chancellor, to 7% for the Vice Chancellor for Research, and 10% for the Chancellor and all other Vice Chancellors. The targets were established to help the campus recover approximately $13.4 million in budget reductions and they take into account only the permanent budgets associated with state general funds, student fees, and state lottery funds.  

The aim of our planning principles is to protect the academic mission and discourage across-the-board reductions. Implementation of these planning principles will likely result in substantial differences in percentage reductions for units within individual control points. Decisions on reduction targets for individual departments and programs are delegated to the appropriate academic and administrative units.

Given the size of the budget reductions, the overall number of staff positions on campus will be reduced.  Through careful planning we hope to honor the planning principle of minimizing the impact on existing staff and avoiding layoffs and furloughs as much as possible. Departments should strive to take advantage of normal attrition, planned retirements, and voluntary reductions in time when budget-reduction proposals are developed.  

All Vice Chancellors and the Chancellor will work with individual units to identify the necessary actions to achieve these targeted reductions, first on a one-time basis for FY 2003-04 and then on a recurring basis beginning July 1, 2004.  This two-phased approach allows departments to use a package of one-time actions to deal with reductions next fiscal year while taking additional time to plan for permanent reductions.

Prior to being implemented, the plans developed by departments and units and their impact on operations will be reviewed by the Vice Chancellors and by me, in consultation with the Academic Senate and the Coordinating Committee on Budget Strategy.  This review will provide an opportunity to ensure that the proposed reductions are consistent with the campus planning principles.

The coming year will be a very challenging one for us all. The campus has met budget challenges in the past, and we will deal with this one while keeping focused on the future.  The goal is to have UCSB strategically positioned to emerge from the current budget crisis with a strong foundation for continued growth. With your help, we will achieve our goal.  


    Sincerely,



    Henry T. Yang
    Chancellor