Following a $2.7 billion budget loss as a result of the COVID-19 pandemic, the UC Board of Regents is looking to recuperate lost funds this upcoming fiscal year, the budget for which was approved at the board’s Nov. 19 meeting.
During their meeting, the UC regents discussed how the UC plans to bridge their financial losses in the upcoming 2021-22 budget, along with their five-year plan to help students facing food and housing insecurity. Courtesy of the UC Board of Regents
At the meeting, the Regents also approved the UC’s special needs report, a five-year plan to address economic inequity among its student body, created by the Board of Regents’ Special Committee on Basic Needs.
The proposal includes implementing measures to halve the percentage of students facing food insecurity — which comprises 44% of undergraduates and 26% of graduate students across the UC system, according to the report — and promoting federal assistance programs such as CalFresh, UC Office of the President (UCOP) executive director of student financial support Shawn Brick presented. The proposal also outlines steps to halve housing insecurity, which pertains to 16% of students and 5% of graduate students.
As the UC is the third largest employer in the state, UCOP Executive Vice President and Chief Financial Officer Nathan Brostrom said over Zoom that the UC’s new budget “was created … to reflect our greater role and responsibility in a society that has been ravaged in so many ways by the COVID pandemic.”
“We need to do all that we can to make sure that we are taking care of our workers and not adding to their financial burden,” Brostrom continued.
The multibillion dollar loss in revenue from 2019-20 comes mainly from UC-owned hospital costs and a decline in housing and dining revenue due to the drop in undergraduate students living on campus. Additionally, the UC has paid an extra $500 million for COVID-19 testing, cleaning practices and online learning materials, according to Brostrom.
However, this loss was padded by a $500 million grant from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was allocated for UC hospitals serving COVID-19 patients. Now, UC medical centers are increasing revenue again, Brostrom told the Regents.
The UC is facing a $690.5 million budget gap for the 2021-22 fiscal year, primarily from a $300.8 million reduction from the state general fund along with a $134 million cost increase for 2020-21 and a $217.4 million increase for 2021-22, Brostrom said.
“Campuses have employed multiple strategies to address the budget gap this year,” Brostrom said, listing reduction of non-personnel budgets, hiring freezes, chancellors taking a 10% pay cut and the implementation of voluntary separation programs as ways the UC plans to bridge the gap.
The UC has also had a “limited number of permanent layoffs” and delayed a number of high-priority investments in increasing graduation rates, faculty hiring, research, restoring competitive salaries, expanding student mental health funding and improving student academic preparation.
As part of efforts to match the $690.5 million budget gap, these cost-saving strategies will bridge the 2020-21 costs of $134.3 million, according to Brostrom. Additionally, the UC is requesting another $217.4 million from the state of California, along with a restoration of the original $300.8 million state fund reduction.
Following a drop in the number of incoming out-of-state students attending the UC this fall, the UC lost an additional $38 million in tuition revenue but believes that the loss will be gained back in the coming years, when recovery is expected as COVID-19 cases hopefully dwindle.
UC Riverside Chancellor Kim A. Wilcox shared his thoughts on the revenue loss during the meeting, calling the current financial situation “dire.”
“We have people on campus suggesting that we eliminate our entire athletics program, shut down our study-abroad programs, our UCDC participation and UC Sacramento participation, simply so we can preserve the dollars to maintain the core of the university,” Wilcox said.
UC Merced Chancellor Juan Sánchez Muñoz echoed these sentiments and said that UC Merced is “still highly reliant” on state funding; similarly, UC Santa Cruz Chancellor Cynthia K. Larive discussed the stresses of staff and students at the university, stating that the high cost of living and tuition for financially impacted students can be “unbearable.”
“If we don’t come to grips with this, we are not serving the system well … we need to go beyond this veneer to really get at what equity means,” UC Regent Lark Park said.
“We have to do more than talk about it,” Park added. “We have to put our money where our mouth is.”
