University of California, Riverside

UCR Budget News & Information

Chancellor's Budget Update — 4/9/09

April 9, 2009

To the Faculty, Staff and Students of the University of California, Riverside:

I seek to provide an update of what is known regarding our general fund budget situation, and of the ongoing planning process and actions being taken.  Following is a distillation of eight complex issues as they are known today, issues that remain very inter-related and fluid.  

As indicated below, I have scheduled a staff brown-bag as well as a campus-wide Town Hall over the next several weeks to provide opportunity for continued open and candid discussion of these important matters among members of the campus community.

General Fund Budget Summary for this Year and Next

  1. The state's economic condition has continued to worsen since the budget was passed in February. Significant uncertainties remain that will likely worsen the scenario further.  Consequently, there are real and legitimate concerns about the impact on the University of California, Riverside, in terms of academic programs, administrative services, and employment.
  2. Our general fund budget reduction for the current year (July 2008 through June 2009) has now been increased to $12,486,000. This reduction is one-time, meaning that this specific loss only occurs for this fiscal year.
  3. Next year in FY 09-10 (i.e., from July 2009 through June 2010), we are anticipating as a minimum a permanent cut of $8.2 million.  In addition, we have increases in several obligatory costs that will receive no state funding - such items as $2.5 million in faculty merit increases, as well as increased costs related to employee health benefits, salary increases for union employees, and other inflationary obligatory costs.   These factors currently total a budget shortfall of approximately $13 million that we must accommodate permanently next year.
  4. In May, the Regents will vote on student fee increases for academic year 2009-10.  The state budget currently presumes the increase will approximate 10 percent.  If the Regents approve a higher fee increase, the UC deficit will decrease; conversely, a smaller fee increase will increase the deficit and thus the impact on our campus.  In all cases, fee adjustments of this magnitude are an added and regrettable burden on our students and their families.
  5. Other 'budget shoes' may very well drop for FY09-10.  Possibilities include failure of some or all of the ballot measures in front of the public in the May 19th special election (today they trail in the polls), and lower than projected tax revenues that are being collected this spring. To the extent these events occur, the total shortfall in item 3 above will increase.
  6. Campus and unit leadership has gone about our planning over the past several months in a way that will encompass the range of possible foreseeable outcomes for next year.  The Budget Advisory Committee, with input from other working groups, is developing differential budget reduction targets.  We are on schedule to have the penultimate recommendations made widely available during an open-comment period in May, before final recommendations are formulated and presented to me for decision in June.
  7. As I stated in my Town Hall meeting in January, furloughs may become necessary at UCR.  We would not move to this in early stages of budget reduction, but we may need to look to it only if other strategic and differential budget reduction scenarios are insufficient for us to meet our fiscal realities.  President Yudof's April 2nd statement is available for your review.  It indicates that, because furloughs are a distinct possibility if the budget continues to deteriorate, he will ask the Regents at their May meeting to approve a legal framework that would allow for the UC system and/or the campuses to implement furloughs and salary reductions, should it become necessary to do so.
  8. Several impacts are beginning to be felt on campus, such as reductions and/or delays in services.  Such impacts are due to immediate actions that were taken to limit staffing to mission critical functions.  While undesirable, these actions reflect the reality of our situation and are necessitated, in large part, as a result of our priority to sustain as much as possible the core academic enterprise.

Working together, I see evidence every day that we have summoned the will to focus our efforts and align strategically important programs with available resources, and grow new resources to support our efforts. As we are making necessary reductions, we are also engaging in a strategic planning process that will enable us to identify areas of critical investment so that we are positioned to strengthen and build our core programs as we emerge from the current economic downturn.  

A vital component of working together is timely and robust communication.  In this spirit I will host a brown-bag discussion session among University staff members and senior leaders on April 16th, from 12:30 to 1:30 p.m.  in the Commons, Room 302.  I am also holding a campus-wide Town Hall meeting on Thursday May 21st, from 9:30 to 11:00 a.m.  in the Commons, Room 302, which will be web-cast.  This Town Hall meeting will be held subsequent to the decisions emanating from the May Regents meeting and the May 19 special election.  By then we will also have the recommendations of our Budget Advisory Committee.  

The seriousness of the crisis we confront is creating real hardship on campus and in our community.  The instability and uncertainty only add to the angst that is created.  Your leadership team throughout campus is doing everything it can to be fiscally prudent, to sustain the core academic enterprise and student experience, and to remain sensitive to deleterious impacts on our students, faculty, and staff.  

I remain confident that we will emerge from this difficult time a stronger and more strategically focused institution for the needs and opportunities of the decades in front of us.  I thank you for your support, your understanding, your advice and counsel, and your sustained commitment to excellence in all aspects of the University of California, Riverside.


Timothy P. White

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University of California, Riverside
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Riverside, CA 92521
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