Should votes reject Gov. Jerry Brown’s proposed tax extensions in June, the state of the University of California is likely to look grimmer.
The Legislative Analyst Office (LAO), a nonpartisan advisory group, recently released budget suggestions for Brown and the California Legislature should the taxes not continue.
“It would mean changes; it would mean that faculty would have less time to spend doing their own research. It would mean students would be paying more money to go to the university, even more than what’s already been planned for the fall,” said Steve Biolard, director of higher education at the LAO. “It would diminish what UC is.”
For the UC system, the list suggested an increase of tuition by 7 percent, a reduction of financial aid funds by 5 percent, a reduction of operation expenses by 5 percent and a reduction of personnel costs by 10 percent.
Kelly Ratliff, associate vice chancellor for Budget Resource and Management, said that the 5 percent reduction in the university financial aid would yield approximately $3 million for UC Davis. However, this reduction, along with the other suggestions, would have a largely negative effect on students on campus, Biolard said.
“You can’t cut hundreds of millions of dollars without it having some kind of a negative effect. What we were trying to do was, if there did happen to be cuts, what would be the least disruptive ways to do that,” Biolard said.
Biolard said that while the cuts might seem harsh, the LAO did try to focus on moving cuts away from undergraduate instruction.
“We tried to focus reductions more in the areas of research, as well as further student tuition increases and require faculty to teach more classes,” Biolard said.
LAO’s suggestions to reducing personnel would have dramatic effects on campus, Ratliff said.
“A reduction of roughly 10 percent would be about 320 staff positions, which would be a big impact on the university. If tax extensions fail, that would be on top of the losses that we’re already anticipating just to grapple with the shortfalls that are already proposed,” Ratliff said.
Leslie Sepuka, UC spokesperson, said that UC is currently focusing on immediate problems, rather than worrying about potential issues in the future.
“Rather than speculating about what might happen in June, the UC Office of the President and campuses are focusing on the proposed cut of $500 million,” Sepuka said.
Budget options will be discussed further at the UC Board of Regents meeting March 15 to 17 in UCSF Mission Bay.
LAO’s list also included similar suggestions for the California State University system, such as increasing tuition by 10 percent and reducing enrollment by 5 percent. The list also included cuts to K-12 education, the public safety system and health and social services.
HANNAH STRUMWASSER can be reached at campus@theaggie.org.
UC is not untouchable. UC Berkeley Chancellor Birgeneau can’t figure out how to save money. UC Berkeley–one of the top universities in the nation, home to some of the finest professors, graduating some of the brightest students–can’t figure out how to save money. No joke. UC Berkeley spent $3 million plus expenses to hire an out-of-state auditing firm to help them find ways to reduce spending.
According to the Contra Costa Times, October 10, 2009, “When UC Berkeley Chancellor Robert Birgeneau ($500,000 salary) was confronted with the $150 million challenge, he gave the matter deep thought, turned his focus eastward to the Boston-based consulting firm Bain & Co. and agreed to pay $3 million over the next two years for someone else to solve the problem.
“We [the Times] never attended business school, but we’re pretty sure that one of the definitions of financial crisis is spending $3 million on consultants to tell you how to get by with $150 million less than you thought you had.â€
The rationale for hiring the consulting firm given by Vice Chancellor Frank Yeary: “I understand at one level, … if you don’t have enough money, why are you spending money on external consultants? Most people who are closer to it say it’s more sophisticated than that.
“If we spend $1.5 million this year and $1.5 million out of savings next year and we’re successful in delivering tens of millions of dollars in savings every year, I think that’s the goal against which we should be judged.â€
Incredible! Millions of dollars could have been saved just by using the expertise on UC campuses. The system has, for example, multiple senior administrators with Ph.D.s who are getting nice paychecks for their expertise, the Budget Office staff gets paid to solve budget problems, and the renowned Haas School of Business has a world class lineup of business experts and graduate programs in financial engineering, global management, accounting, financing, and operations management.
Moreover, the funds used to pay the high cost of hiring outside consultants could have been used to make up for state budget cuts, student fee increases, furloughs and layoffs.
But, according to Vice Chancellor Frank Yeary, “The reason for not relying on internal experts is that self-diagnosis is not always impartial.â€
If this is the reasoning by UC Berkeley decision makers, it is no wonder they are in a fiscal crisis. If the university system can’t trust its internal audits, maybe it is time for outside auditors to make all the university’s financial decisions. Those decisions might be based on more practical thinking than those made by the current university leadership.
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