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Worsening state budget crisis prompts campus leaders' call to action

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Although the State Legislature is still at odds over how to slash the state budget to deal with a $24 billion deficit, it is very likely that the governor's proposed $619 million cut to UC's budget for 2009-10 will stand, UCLA's budget chief told the Legislative Assembly on Thursday, June 11. UCLA's share of that cut would amount to a $109 million reduction — 16 percent of its general fund.

towers
Photo by Stephanie Diani.
Even though the final budget outcome is still to come, it is imperative that UCLA begin to act now to put reductions into effect to protect the university financially, campus leaders said. To cope with these new realities, the university will need to shrink.

"Believe me — this is not a drill. This is not a test. … I've been watching the dynamics in the state capital over the last several weeks, and I believe [with] a high degree of confidence that that actually will be the final number in the budget," said Vice Chancellor Steve Olsen of Finance, Budget and Capital Programs.

So far, legislators have given no indication that they are willing to restore funding to UC or CSU's operating budgets, although there has been some support for retaining funding for the Cal Grant programs.

Chancellor Gene Block and Executive Vice Chancellor and Provost Scott Waugh joined Olsen in delivering the grim news to the Legislative Assembly meeting in Kerckhoff Hall. Campus leaders emphasized that quick action needs to be taken because of fast-moving developments in Sacramento. The situation is very fluid, they said.

"None of us can escape the fact that we're in something unprecedented," Chancellor Block said.
 
The challenge of the next fiscal year

The deep cut that may take effect beginning July 1 will pose a huge challenge, Block said, "because it comes upon us very suddenly, and cuts have to be made quickly." But the university will not give up its mission or commitment to teaching, research and service, he said.

"The ticker starts on July 1," Waugh explained. "Every dollar that we spend after July 1 reduces the amount of money that's available to be cut," making the task even more difficult than it already is.

One area being considered for cuts by the Office of the President (OP) is employee compensation. 

While no decision has been made on what form it will take, OP recently sent UC employees three options that would save an estimated $195 million in the general fund payroll. A $195 million savings from systemwide pay reductions and/or furloughs would make up one-fourth of the anticipated shortfall for UC. The systemwide options under study would apply to all faculty and staff. The options are an 8 percent salary reduction plan, a plan for 21 unpaid days and a plan that would total 12 unpaid days plus a 3.4% salary reduction. Faculty and staff have the opportunity up until July 1 to send their comments to their union if they are represented, their human resources department or to Staff Advisor Ed Abeyta. The UC regents are expected to vote on a specific option when they meet July 15-16.
 
UC senior administrators, who have already agreed to have their salaries reduced by 5% for 2009-10, will have their salaries reduced by a total of at least 8% under these plans. 

UCLA's share of the savings could range from $32 million to $36 million. A $36 million salary savings for the campus, when added to other planned reductions of $33 million, achieved through a 5 percent cut across the board by campus units, would still leave UCLA with a shortfall of $40 million for the next fiscal year.

"Our strong belief at this point is that we have taken across-the-board reductions as far as they can go — and in some cases too far," Olsen acknowledged. UCLA is dipping into its cash reserves for bridge funding for some core instructional programs for 2009-10. But that can't be maintained for long, he said.
 
Getting back to basics

To make $40 million in targeted cuts and adjust to the new realities in state funding, UCLA is going to have to start downsizing, making major adjustments to its academic programs, resulting in fewer courses, fewer majors, fewer degree programs and fewer faculty members over time. Although UCLA will work on reducing student enrollment, it is a slow process that takes years, Waugh said. "To be clear about this — faculty workload is going to go up," he said, as faculty hiring dramatically falls off and if the pace of faculty retirements quickens as UCLA hopes.

For 2009-10, faculty appointments will number fewer than 20, compared to 74 this year. Waugh said departments should plan on being around 10 percent to 20 percent smaller. To do this, they will need to reduce the number of courses and the kinds of degrees they offer.

"The academic program is going to have to shrink," Waugh said. "We just don't have the wherewithal to support all the activities, all the programs, all the courses, all the departments, all the research activities that we have engaged in in the past. We're going to have to look at a deliberate and meaningful way of realigning our academic programs with the realities of our state funding."

Getting back to basics in education will also offer departments a chance to carefully examine majors and courses to make sure they meet academic goals as well as the aspirations of students and the community. "We have to aim for preserving what's essential and try to figure out what's less essential," Waugh explained.
 
The hard work ahead

In order to meet this crisis, much has to be accomplished in a short time. Recommendations from the Tool Box Project task forces to reduce administrative costs, improve operational efficiency, increase non-state revenue, cut costs and reallocate resources within the academic program are now available at this website.

"These recommendations will be under active consideration over the next few months and on into the next year," Waugh said. Some can be implemented in a few months; others will take a few years to carry out.

"It's very important that we all be engaged in this process because it affects all of us. … We don't have the corner on genius here. It's very important that you get involved in the process and help us out," the executive vice chancellor urged.

He outlined the principles that will guide decisions on how academic programs will be realigned:
  • Academic excellence must remain a top priority.
  • Decisions about curricula and teaching should be made locally. The exception would be interdisciplinary programs, "where it might be beneficial to have solutions that cross department or program lines," Waugh explained.
  • Any changes to degree programs and curricula must be developed by faculty and implemented in accordance with Senate policy.
  • Any new funds generated must be directed to UCLA's educational mission.
  • Changes must take into account priorities established by Chancellor Block: academic excellence, diversity and civic engagement.
 
A time for reappraisal

To streamline academic programs, departments will be reviewing requirements for majors and minors and reducing maximum units. General education requirements will be reviewed as well. The number of total courses will be reduced, but departments will need to make sure that undergraduates have the essential courses they need to make progress toward their degree, Waugh emphasized.

Departments will also increase the percentage of ladder faculty who are teaching high-priority courses. To become more efficient, departments will be consolidating similar basic skills courses, as well as administrative and computing services. And the use of educational technology will expand, if possible, to increase efficiency and sustain quality while class sizes increase.

In addition, task forces will form this summer to help specific academic areas — including foreign language departments and the writing programs — save money. "This is not aimed at creating cuts to the humanities," which will be most heavily impacted by the cuts in terms of cost of instruction, Waugh stressed. These task forces, made up of Senate members and administrators, will be working in a short timeframe, from 90 to 120 days.

To increase non-state revenue, there are a number of options being considered, Waugh said. Departments could offer more courses during summer sessions, set up self-supporting degree programs and work with UCLA Extension on ways to deliver basic skills courses. UCLA will gradually increase its enrollment of higher-paying non-resident students, but by a modest number so as not to harm access for California students. And UC is looking into whether different fees should be charged for particular schools or subjects where the cost of educating students is higher.
 
Crisis calls for working together

Chancellor Block reminded faculty representatives that UCLA has weathered many financial storms in the past. "Many of you have been here longer, obviously, than I have, and you have seen this university go through challenging times."

UCLA has nevertheless emerged from these downturns a great public institution, said the chancellor. "It will remain so. But it will take all of us working together to make certain that we come out of this crisis a strong institution."

Campus leaders said they will keep the campus community updated on this very serious situation, where the budget numbers are changing frequently.

• A staff Town Hall meeting on the budget situation is set for Wednesday, June 24, from noon to 1 p.m. in Royce Hall. To RSVP, go here. Staff Assembly is also videotaping the meeting and will be posting a link to it on this website shortly after the event.
 
• Read about the three proposed options for salary reductions and/or furloughs and send in your comments. See this list of frequently asked questions on these options.
  
• Go to the website for the Budget Toolbox Project. Read the reports and send your comments to evc@conet.ucla.edu.

• See a video of the June 11 budget presentation before the Legislative Assembly.

• Stay up-to-date by visiting UCLA's budget website.
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