Message from Vice Chancellor Steve Olsen about the final state budget

To the campus community:

As many of you know, the governor approved the final state budget for 2008–09 on Sept. 23, after a protracted legislative stalemate that created great uncertainty and concern across California. Funding provided to the UCLA campus will remain essentially the same as last year, but we should be under no illusion that UCLA is escaping significant impacts or that state budget problems have been resolved. There are four main contributing factors.

1. The state is providing no new funding to offset higher costs associated with increased student enrollment, health benefits, building maintenance and energy purchases. These costs are equivalent to about 3 percent of our core revenues and are being absorbed by operating units across campus.

2. The state is providing no new funding for employee compensation increases. The University of California Office of the President and the Board of Regents are currently looking closely at this issue, as well as at health insurance costs for 2009. The campus has been told to expect final decisions on these issues in the next few weeks. Individual faculty members eligible for merit or promotional advancement this year will receive approved increases. Any salary actions for exclusively represented employees are subject to the collective bargaining process.

3. While the Board of Regents has approved a student fee increase of 7.4 percent for 2008–09, these new revenues are sufficient only to pay for the full-year cost of salary increases provided Oct. 1, 2007, and for faculty merit increases, but not any of the other items listed above.

4. The approved state spending plan does not address California’s structural budget problem — in effect, the state taking in less revenue than it spends. As a result, funding for higher education remains at risk for the 2009–10 fiscal year.

The final UC budget is essentially the same one upon which our internal budget planning was based. Our careful planning has allowed us to avoid across-the-board program cuts and minimize impacts.

However, the long-term erosion of state support requires ongoing trade-offs involving academic quality, access and affordability — all at the core of UCLA’s mission. While state funding accounts for only 13 percent of UCLA’s total revenues, UCLA’s core academic and administrative programs remain highly dependent on the state. We will work diligently to minimize the detrimental effects and keep you informed as we move forward.

Thank you for your suggestions, your understanding and your patience during this challenging time. Most of all, though, thank you for your commitment to UCLA.

I encourage you to visit www.ucla.edu/about/budget/index.htm for campus and UC budget news.

Sincerely,

Steven A. Olsen, Vice Chancellor
Finance, Budget & Capital Programs