Budget Update

To: Faculty
 

Dear Colleagues:

I am writing to bring you up to date on the recently announced budget reductions and how we intend to address them. Because there are many steps before the budget is enacted, there is some uncertainty about what our final reductions will be. In the meantime, we have a general sense of the magnitude of the challenge facing us and have begun taking steps to meet it.

Governor Brown has proposed cutting the UC budget for 2011-12 by $500 million contingent upon the extension of taxes and fees that are due to end July 1, 2011. The Office of the President has allocated $96 million of the total cut to UCLA and has asked that we submit our preliminary plan for meeting the budget reduction by February 23^rd. In addition, UCLA faces $111 million in unfunded costs associated with employer retirement contributions, health benefits, faculty and staff salaries, and utilities and building operations.

The campus has been actively preparing for declining state funding under the purview of UCLA’s Restructuring Steering Committee (RSC) since 2009. I will continue to work with the RSC, the Academic Senate, deans, and chairs to develop various approaches to this latest round of budget cuts and cost increases.

I want to emphasize that our highest priorities are undergraduate education, research, and graduate education. As you may have read in the President’s letter, student fees now make up a greater percentage of the UC budget than the state contribution. We take great pride in the quality of education we provide our students and it is critical that we sustain that quality. Therefore, we need to assure students that they will have the courses they need to make timely progress to their degrees and that their academic programs will meet their needs after they graduate. We must also continue raising funds for scholarships to ease the burden of tuition increases. Equally important is undertaking the research that helps make UCLA such a great university and that contributes so heavily to California’s economic development. Training graduate students to become the next generation of scholars is also essential. In the next few years, however, we will face difficult choices about how to distribute limited state funding for both research and graduate student support.

To protect these priorities and achieve required savings, all units will face cutbacks and increased workloads. For the past two years, we have cut administrative costs by millions of dollars annually through strategic sourcing, energy conservation, administrative and operational efficiencies, and process improvements. A variety of changes in research administration have led to both cost savings and improved performance, and efforts are underway to streamline aspects of the academic personnel process. In addition, we will make structural changes in central administrative offices such as the Graduate Division.

Because of the steep decline in state funding, we must continue to exercise restraint in faculty hiring, since faculty compensation accounts for 53% of our General Fund expenditures. The size of the faculty, therefore, will necessarily shrink relative to the number of students, so that workload will increase. Under these circumstances, departments need to take steps to carefully plan how they will sustain the curriculum, eliminate bottlenecks, and help students graduate in a timely manner. I am pleased to report that Challenge 45 has led to a notable streamlining of undergraduate programs. The challenge now is to broaden that effort into an examination of all undergraduate requirements to ensure that they are cost effective and in the students’ best interest. Furthermore, schools, divisions, departments and research centers need to entertain possibilities for mergers or consolidations, whether in programs, administration, computing, or other areas.

At the same time, all units must vigorously explore options for increasing revenue, such as summer programs, professional master’s degree programs, or online programs. The campus as a whole is increasing the number of non-resident students, and the added revenue they bring is a vital component of our plan to meet the budget reductions. We will place more emphasis on UCLA’s entrepreneurial aspirations, with the goals of both contributing to the community and increasing our revenues. Similarly, our development efforts, which have been strikingly successful despite the economic downturn, will receive a major boost as we begin our centennial fundraising campaign.

I realize that the budgetary news has caused some to question the future of the UC and UCLA in particular. While understandable, these fears are exaggerated. UCLA is in sound financial condition, and we have a variety of means to attack our budget problems. I cannot minimize the seriousness of these challenges or pretend that this process will be easy, but through the efforts of our entire UCLA community, we will be successful in preserving the unique character and quality of UCLA.

Vice Chancellor Steve Olsen and I will be presenting information about the budget and UCLA’s response at the next Academic Senate Legislative Assembly meeting, scheduled for Thursday, February 17th from 2:00 – 4:00 p.m. in the Charles E. Young Grand Salon in Kerckhoff Hall. We encourage you attend.

Sincerely,

Scott L. Waugh
Executive Vice Chancellor and Provost