University of California, Riverside

UCR Budget News & Information



Chancellor's Budget Update — 1/23/09


January 23, 2009

TO: Faculty, Staff, and Students
University of California, Riverside

I write today with growing concern about the depth and breadth of the state’s economic downturn and its impact on the University of California, Riverside, over the next few years. While our campus is vibrant and strong, we are not impervious to the increasingly serious financial challenges facing our state and nation.

As you have learned in the news, California faces an unprecedented fiscal crisis, with a projected deficit of nearly $42 billion over the next 17 months. The situation continues to be very fluid, economic and political solutions remain elusive, and the confusion is compounded by the fact that the state legislature is still grappling with the budget for Fiscal Year 2008–09 at the same time that the Governor released his proposed budget for Fiscal Year 2009–10. Although there are still a number of unknowns, I would like to update you on the current situation as best I know it.

This letter and a Town Hall Meeting to be held at 2:00 p.m. on Thursday, January 29, will address this crisis by focusing on this year’s operating budget, the anticipated permanent reductions to our state and core-fund base budget for FY09–10 and beyond, the impact on building projects on campus, enrollment, and our strategic journey forward.

As I have previously discussed, UCR is absorbing a cut of approximately $8 million for FY08–09 in state and core funds, which may grow to $13 million if so ordered by the agreement being crafted by the Governor and state legislature. In my October 15, 2008 communication to you and the November 24 Town Hall Meeting, I outlined measures the campus has implemented to take the budget reductions, including limiting faculty and staff hiring to mission critical positions for this year and next.

Across the UC system, we now have on the table the possibility of furloughs and lay-offs, as we cannot manage this multi-year crisis by minor and non-permanent adjustments. Here at UCR, we also must become serious about program consolidation or elimination. As I have stated previously, in taking cuts we will make every effort to minimize impact on the academic enterprise, and in particular, the student experience, by examining every possible opportunity to reduce spending while increasing revenues. As we do so, we must at the same time preserve the high quality of our fine university and strategically position ourselves for the expected upturn in years to come.

To address the cuts for the remainder of this fiscal year, and to plan for the years ahead, I have appointed a Budget Advisory Committee made up of all organizational heads (primarily deans and vice chancellors), the chair of the Academic Senate, and the chair of the Senate Planning and Budget Committee. This group is charged with recommending resource management strategies to me by May, including the development of hypothetical 10–15 percent reduction scenarios for our general fund budget, as well as possible realignment of resources. These recommendations will be publicized at that time, and I will seek comments from the campus community, stakeholders, and interested constituents before making final decisions in late spring. These efforts will be aligned with a vigorous, UCR-wide academic strategic planning process that has just been launched.

While the Budget Advisory Committee will make recommendations related to our operating budget, the campus is also grappling with impacts on our capital budget. These resources are used for building-related activities, not operations and programs. Effective December 17, 2008, the California Pooled Money Investment Board (PMIB) suspended the disbursement of state bond funds for all state infrastructure projects. This action affects most building projects at UCR. Exceptions are the Commons, the Child Development Center, and the upcoming Health Sciences Surge Building, none of which depends on state bond funds. Unfortunately, Geology Phase II relies entirely on state funds; therefore, we are in the process of suspending renovations that were already underway, placing a hardship on approximately 75 faculty, staff, and students who have already been displaced and who generate approximately $1.5 million annually in extramural funding. Construction on projects with mixed funding sources—Materials Science and Engineering Building and the Culver Center for the Performing Arts—will continue for a short time, until funds from non-state sources are depleted.

Three additional UCR projects are virtually complete, but depend on bond funds for furnishings and equipment. These, too, are affected by the PMIB action. Because the Psychology and Student Services Buildings are already occupied, we expect impact to be minimal. The Genomics Building was scheduled for occupancy in the next month, but this may not be possible because of the suspension of state funding. We are consulting with the Dean’s Office and future building occupants on possible solutions.

All state bond funded capital projects now in the planning or design phases will be delayed until the PMIB action is lifted. At this time, we do not know how long that may be.

As for enrollment, The Regents recently approved a plan to reduce the number of new California resident freshmen by 2,300 students systemwide and to increase community college transfer students by 500. Based on this action, UCR’s target for fall 2009 will be 4,000 new freshmen, compared to 4,400 this past fall. At the same time, we will increase our transfer students by about 80, to a total of 950. Graduate student enrollment is expected to remain relatively constant. These actions, coupled with current students who are matriculating, are expected to yield a 1–2 percent increase in our student population.

We do not yet know whether the UCR School of Medicine will be funded by the state in FY09–10. The Governor’s initial budget proposal does not include the initial $10 million investment in the UCR medical school that was included in The Regents’ budget. As the Governor indicated in his state-of-the-state address, however, he is requesting no new projects until the budget impasse is resolved. In May, the Governor historically releases a “May revise” budget. Because of the importance of this project to UCR and to the health and economic development of our community, we are working to fund this project with state and philanthropic resources.

Along with other UCR leaders, I will discuss these budget impacts and hold a question and answer session with faculty, students, and staff at a Town Hall meeting scheduled for 2:00 to 3:00 p.m. on Thursday, January 29, in Commons 302. I encourage your participation either in person or via the UCR website, which will carry a live stream. As always, I look forward to any suggestions or comments you might have. Please look for future updates on the campus budget Web site. You may find additional information on the UCOP Web site.

Despite the sobering financial news, we have reason to be hopeful and aspirational. UCR has a very bright future. We have a dynamic campus with superb students, faculty, and staff. Together we must summon the will to focus our efforts and align strategically important programs with available resources and grow new resources to support our efforts. I trust that we will remain united in the journey through these turbulent and uncharted economic waters. Working together, we will find solutions that help us live the promise that UCR’s bright future holds.

Sincerely,

Timothy P. White
Chancellor

More Information

General Campus Information

University of California, Riverside
900 University Ave.
Riverside, CA 92521
Tel: (951) 827-1012

Contact Information

Office of the Chancellor
4108 Hinderaker Hall

Tel: (951) 827-5201
Fax: (951) 827-3866
E-mail: budgetquestions@ucr.edu

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