The UC Board of Regents meeting at UCLA on Wednesday pitted the coming year’s proposed budget against concerns about rising student fees.
The regents presented and approved the 2008-2009 University of California budget, which revealed a discrepancy between the amount of money the university requires to operate and the funding currently allotted by the state.
The main issue of contention was the fact that, while the regents had not recommended a student fee hike, they will be forced to raise fees to fix the discrepancy between expected revenue and expenditures if the state does not bridge budgetary gaps.
The open session began with a public comment period, which centered primarily on requests made by student groups for a freeze on student fees.
In a rare break with tradition, Chairman Richard Blum replied directly to the students’ comments. He said he hoped students knew that families with an income of less than $60,000 were eligible for a Cal Grant, and added that he believed the real issue to be the high cost of living in California, rather than the rising costs of a UC education.
“What our job ought to be is to raise a lot more scholarship funds so that we can help students that need it,” Blum said. “Not just with tuition, but with living expenses as well.”
The board addressed funding concerns and considered the budget proposal.
Executive Vice President Katherine Lapp presented the proposed operations budget and said it focused on the need to provide competitive faculty and administrative salaries in order to maintain the quality of the university.
“Budgets are a blueprint for turning vision into action,” Lapp said, as she began her PowerPoint presentation of the summary of the budget request.
Lapp predicted operating costs of $18.1 billion for the university to be met by a variety of sources, including UC general funds, student fees and critical state aid. But the university’s share of the state general fund has steadily declined, dropping from 6.5 percent in 1981 to its current 3.2 percent.
State funds per student have dropped 34 percent, but students are contributing 17 percent more toward their education now than they were 10 years ago.
The budget included a predicted $378.2 million increase in revenue and $406.3 million increase in expenditures, which would create a $28.1 million deficit that would need to be covered through cost savings as a result of current restructuring efforts within the university.
The proposed budget asked for $70.5 million more than it had been allotted by the compact the university had entered into with Gov. Arnold Schwarzenegger three years ago. That compact was intended to cut some baseline state funding by forcing the university to fill fiduciary gaps by raising fees or seeking private funding.
John Garamendi, lieutenant governor of California and ex officio regent, put forward a motion to remove all mention of student fees from the proposed budget. He said his concern was that the current budget proposal made it clear to the California State Legislature that, while the regents hoped to get additional state funding for the UC, they were willing to raise fees by as much as 7.5 percent in order to meet their budgetary needs if their request was denied.
Garamendi said that even acknowledging the possibility of student fee increases in the face of a rejection of their proposal put the regents at a distinct disadvantage in bargaining with the state.
“We have to get a grip on this, but instead we’re taking the easiest step and saying that it’s a bad budget year,” Garamendi said.
Several regents worried that forgoing student fee increases put the UC in the dangerous position of not being able to maintain its quality of education if Sacramento refused to increase funding ““ and in a unanimous vote, the regents failed to pass Garamendi’s motion.
Wyatt Hume, provost and chief operating officer, then presented an update regarding planned restructuring efforts to cut costs internally with the guidance of The Monitor Group, an independent consulting company.
While the restructuring initiatives are aimed at adding $28.1 million in revenue through administrative cost-cutting, Hume said the goal had to be less about saving money, and more about manifesting the broader vision of a cohesive and collaborative UC.
Hume said it was first essential to streamline and improve administrative functions within the UC Office of the President. He said that this improvement is already being undertaken with the establishment of a new budget to be released next March.
Hume added that the risk management initiative headed by Vice President Anne Broome had already exceeded the goal of reducing costs by 15 percent over 24 months by the 18-month mark, and that with a total investment of $9.6 million, the UC had reduced system-wide costs by more than $100 million.
Additionally, the Committee on Compensation reported that they had deferred a decision to raise chancellor salaries until the next regents meeting in January, but had agreed to a raise of about 17 percent for both Hume and Broome.