San Francisco – The University of California Board of Regents raised salaries for top UC officials Wednesday after considering a host of budget-slashing options in response to California’s economic slowdown.

The board unanimously approved a 2 percent systemwide merit increase for the 145 UC senior managers earning above $168,000, including President Richard Atkinson and the 10 campus chancellors, to “keep the UC competitive,” according to the UC Office of the President.

The regents also passed the Capital Accumulation Provision (CAP), a deferred compensation program that will put the equivalent of 3 percent of a staff or faculty member’s salary into a retirement fund with a 7.5 percent interest rate.

The board also requested state funding for staff and faculty merit raises in the $3.65 billion proposed 2002-03 UC budget, which it unanimously recommended to Gov. Gray Davis.

Next year’s budget, an 8.7 percent increase over the current one, is unlikely to receive full funding from the state because of an estimated $12.4 billion California budget shortfall anticipated by the Legislative Analyst’s Office. This is California’s largest budget deficiency since the Great Depression.

Specific UC budget cuts will become clearer when Davis presents his state budget to the Legislature on Jan. 10.

In the meantime, the governor, who asked state educational agencies to brace for as much as a 15 percent cut in next year’s budget (equal to $475 million), proposed $86 million in mid-year reductions from the current UC budget this week. These cuts, which will likely be enacted by the Legislature in January 2002, include a $25 million decline in state monies for energy costs.

UC Vice President of Budget Larry Hershman delivered a presentation to the board outlining a number of possible fund-reduction options for next year’s UC budget. These included limiting salary growth for faculty and staff, deferring state support for summer sessions at Davis, Irvine, Riverside, San Diego and Santa Cruz (UCSB, Berkeley and UCLA would continue to receive state summer session funding), increasing student fees by eliminating 1998’s 10 percent undergraduate and 5 percent graduate fee reduction, and implementing enrollment caps to maintain the 17.5:1 student to faculty ratio.

“We are still living with the misery of the early ’90s,” Hershman said, referring to the UC budget cuts that drove up campus enrollments and the student to faculty ratio. “I think out of all the budget cuts over the last 30 years, this has been the one that stuck. Once it starts slipping, it is hard to make up.”

A number of regents also discussed the option of raising student fees. Most opposed fee increases for resident undergraduates and sought other cost-cutting options.

“I’m just saying again that we, the University, are being used by the rest of the government when we have to increase fees because they don’t have the guts to raise taxes,” Regent William Bagley said.

“California cannot afford to under-fund education,” Student Regent Traci Davis said. “We have had massive increases in student debt. It just seems like a huge spiral and to know that we are not investing in education is very disconcerting.”

In other news, the board officially passed the Comprehensive Admissions Review 15-4-1. The new admissions policy will allow each campus to select all of their UC-eligible applicants based on a wide range of criteria not limited to test scores and GPA.

Eighteen UC students, including UCSB Students for a Free Tibet President Daniel Gross, also protested outside of the meeting at UCSF’s Laurel Heights campus and called for the regents to divest their $300 million worth of stock in BP Amoco due to perceived human rights violations.