The UC Board of Regents convened at UC San Francisco’s Mission Bay Community Center yesterday to debate various budget scenarios for the 2011-12 through 2015-16 fiscal years in light of increasingly impacted budgets.
The board spent the majority of the meeting discussing proposals to account for an expected $500 million cut in state funding that would drop California’s General Fund support for the UC to 1998-1999 fiscal year levels, when the university system had nearly 73,000 fewer students and one less campus. The regents also appointed former Georgia College & State University President Dorothy Leland as UC Merced’s newest chancellor and assigned new board leadership.
According to a UCOP press release, the University faces a projected $900 million budget gap for 2011-12 that will balloon to $2.5 billion by 2015-16 if new revenue streams and cost-cutting initiatives are not implemented.
UCOP Executive Vice President for Business Operations Nathan Brostrom said California’s boom and bust cycles have created a necessity for stable revenue sources, placing much of the burden on students.
“In the past two decades, we’ve had eight years with tuition declines, eight years with double digit increases and only four years in those 20 years where the tuition increase was between 5 and 10 percent, which is roughly where the price index for higher education has been,” Brostrom said. “Ironically, if you compounded those rates over the 20 years, it turns out that’s about 7.5 percent [annually] if we had one steady tuition increase during that period.”
Brostrom presented a proposal to stabilize the system’s finances by increasing enrollment by 1 percent annually and maintaining current employee benefits. This plan would not require additional fee increases beyond the 8 percent hike approved last November.
However, newly-appointed UC Regent David Crane advocated against a plan that relies on volatile state funding. Crane — whose appointment has yet to be approved by the Senate — said government funding will only become more unreliable as increasing proportions of the state’s budget are effectively fixed each year.
“Even the most well-intentioned state legislator is going to have a very difficult time saying we need to give more money to higher education,” Crane said. “We should hope, but we should plan accordingly. We have to think publicly and act privately.”
Crane urged the board to discount the guarantee of state funding, saying the University should become more self-reliant and turn to measures such as differential tuition between campuses to maximize revenue.
“The first thing that we have to choose is the faculty, and we have to make sure we continue to pay and finance faculty; the next is we have to make sure that we are affordable and accessible,” Crane said. “To achieve those things, that means we’re going to have act like a private organization and unleash ourselves and stop thinking that the state is going to be there for us.”
In an update on student financial aid, the board reported that 67,000 students currently receive aid under the University’s Blue and Gold Opportunity Plan. Within the upcoming year, the Regents hope to expand the program by 3,000 to 4,000 additional low-income students at a cost of roughly $10 million, by increasing the maximum annual household income needed to qualify from $70,000 to $80,000. According to the board, half of the University’s students currently rely on an average of $17,000 in student loans a year.
Leland will assume her duties as the third chancellor of UC Merced on July 1, succeeding Sung-Mo Kang who will transfer to UC Santa Cruz to teach and research electrical engineering. Leland’s annual salary as chancellor will be $310,000 — about 5 percent more than Kang’s yet 36.5 percent below the market median of $488,000.
In a statement released following the decision, Leland expressed optimism for her career with the UC.
“The opportunity to help build on the accomplishments of UC Merced’s faculty, students and staff is an honor and tremendous thrill,” Leland said in the press release. “The university’s vibrancy and commitment to research excellence, coupled with the chance to get back to California, make this appointment all the more exciting for me.”
Regent Sherry Lansing, a former chairman and CEO of Paramount Pictures who just served as vice chairman of the Regents, was elected to succeed Russell Gould as the new board chair for a one-year term beginning July 1. The board also appointed Regent Bruce Varner as vice chairman.