UCLA Office of the Executive Vice Chancellor and Provost
To: Faculty, Deans, Vice Chancellors, Vice Provosts, Chief Administrative Officers, Directors
I am writing to update you on our response to California’s unprecedented budget crisis and its impact on our campus. Over the past decade, state support for the University of California has dropped by more than 50 percent. In the past year alone, state funds for UCLA were cut from $470 million to $340 million and, despite uncertainty about the future budget, we expect further cuts. Tuition increases have not fully replaced the loss of state monies. On top of this, UCLA faces unfunded mandatory cost increases, primarily due to pension contributions but also faculty merits and increases resulting from system-wide collective bargaining agreements.
We are managing our budget within a changed policy environment. A new “funding streams” model that has been implemented by the UC Office of the President (UCOP) has two key components. First, campuses can now keep all non-state revenues they generate, such as tuition and overhead from grants. Tempering this good news is a second aspect of the model: Campuses must pay a tax (1.6 percent of the prior year’s expenditures) in order to support UCOP’s operations and initiatives. In our planning, we must keep in mind that most restricted funds, such as extramural grants and endowment funds, cannot be directly taxed or cut to achieve our budget targets.
On February 27, 2012, Chancellor Block and I met with UCLA administrative and Academic Senate leadership to discuss how UCLA will address our budget situation in this new context. If we fail to act, our general fund—the major source of funding for our academic programs—risks falling into deficit. Our highest priorities are preserving UCLA’s academic quality and offering excellence in graduate and undergraduate education. I will work closely with the deans and the Senate—who will in turn work with department chairs and faculty—toward these goals.
We are pursuing a four-part strategy to ensure our fiscal and academic strength.
First, we must increase non-state revenue. Enrollment of nonresident undergraduate students is critically important because nonresident tuition helps cover the costs of educating all students. Self-supporting programs, professional school differential fees, and Summer Sessions revenue sharing are other important sources of funds. Selective conversion of some professional degree programs to self-supporting status will help free up funds for our core academic programs and avoid deeper cuts to undergraduate education. Fundraising also plays a key role in this effort.
Second, we are striving to deliver our academic programs more efficiently. We have slowed faculty hiring and reduced the requirements for many majors. I ask you now to continue reviewing requirements for majors and to consider cutting small courses and reducing the number of majors, so that we can focus our resources more effectively.
Third, we are continuing to reduce administrative costs while increasing efficiency. Units such as research administration, the graduate division, and information technology services have undergone major restructuring. Across the campus, hiring has slowed, and units have addressed budget challenges through attrition, retirements, leaving open positions unfilled for a longer period of time, and organizational changes. We have reduced purchasing, energy and transactional costs.
Fourth, we are engaging in systemwide partnerships to obtain access to new tools and systems. UCLA will be an early implementer of a new UC payroll and human resources system (UCPath), expected to be in operation by July 2013, which will eventually lead to long-term savings in both staffing and operational costs.
Our leadership meeting began and ended with the reaffirmation of our commitment to academic excellence. We must, and we will, preserve the quality of our academic programs, act aggressively to retain our faculty, hire faculty in high-priority areas and compete effectively for the finest graduate students. We will also continue to offer an undergraduate education and student experience that is second to none.
UCLA’s superb faculty and staff are among our greatest strengths. You are the reason that more students apply to UCLA than to any other university, that we receive over $1 billion per year in extramural funding and that we rank among the top research universities in the world. Thank you for your dedication to our students and our community.
Scott L. Waugh
Executive Vice Chancellor and Provost