Chancellor Larry Vanderhoef spoke Thursday in his second-to-last Brown Bag Chat on topics ranging from financial aid to the University of California retirement plan – but like everything lately, all roads led to the state‘s budget crisis.
Despite a recent comment from California Senate President and UC Davis alumnus Darrell Steinberg that the budget is “close“ to being resolved, the financial woes of the University of California will not end soon, Vanderhoef said.
“Russ Gould had a comment at the last Regents meeting that this isn‘t just a recession – it‘s a reset,“ Vanderhoef said. “Even in the best of circumstances we‘re not going to suddenly turn around and in a year or two get back to where we were – we have to get used to smaller budgets and spending less, and this will show up across every aspect of our lives, especially at the university.“
The shortfall on the Davis campus for this year alone is $46 million – a fall not cushioned by any funding from the state and hardened by increasing inflation costs.
“We‘re all going to feel it in some way,“ Vanderhoef said. “When we want to spend on something it has to come from something else – there‘s no free money from the state or government.
“As dismal as it all sounds – we‘ve been through problems of this magnitude before and we‘ll get through them again – just by a different lifestyle than we‘re used to.“
The problem does not end there though, said UC Davis provost and executive vice chancellor Enrique Lavernia. The system is anticipating a mid-year budget cut of $65 million – approximately $9 million of which will be subtracted from UC Davis.
“We think of this as a best-case scenario though – it‘s much better than the original proposal from the governor,“ Lavernia said.
UC Davis already knows it will see a 400-student reduction in enrollment in 2009-2010, and has reduced faculty recruitment by about half.
“Nevertheless we‘re having to plan for a shortfall of $35 million and we‘re looking at a full range of options that are primarily short-term,“ Lavernia said. “Over the next few weeks we‘re going to be issuing planning targets to different groups so they can figure out how to meet them.“
Five separate committees of about 70 people, comprised of faculty, students and staff will look at five areas of the university: Instruction and research, administration, student fees, self-supporting activities and capital planning. Lavernia plans to work with the Vanderhoef‘s successor over the summer in evaluating each committee‘s recommendations.
Vanderhoef also touched on the issue of the University of California Retirement Plan, which has finally dried up the surplus it had been living off for 18 years.
“Our goal is to keep it funded at 100 percent or more, and we stopped the requirement that employees make contributions to the system more than 18 years ago because we had become overfunded,“ he said.
The drop in both the fund and the economy over the last year and a half though, has been significant, and the UCRP is now funded at 80 percent – below the level necessary to make retirement payments.
“Employee contributions have to go back on the table,“ Vanderhoef said of the likely solution. “The plan calls for a 2 percent employee contribution that would matched by the university and increase over time.“
MIKE DORSEY can be reached at firstname.lastname@example.org.