The California Senate Budget Committee held an on-the-road hearing in Mountain View on Friday about the budget cuts to higher education. President Yudof spoke about UC and posted his statement on the internet. Yudof made some points about the importance of UC and the damage that budget cuts are causing to UC in talking points that are quite concise. A very fast way to learn a lot of details about the crisis:
Good morning, Chairman Leno, Vice-Chairman Huff, and other members of the committee.
I know you have specific questions for me today. But before we get to them, I’d like to begin with a broader perspective of the University of California and its current fiscal condition.
The UC and California are long-time partners in prosperity:
Because let’s be clear: funding UC is funding the future of California. The relationship between this university and this state is long and symbiotic.
And our current standing — as the world’s eighth largest economy, and as the world’s greatest higher education system — is the direct result of this powerful symbiosis.
We can point to the fruitful outcomes of this symbiosis with some specific examples.
System-wide, our entrepreneurial faculty and staff work with more than $4 billion in research money — most of it outside funding that they bring in — and which in turn helps propel the state economy.
Similarly, the state pays less than 10% of the budget at UCSF, but 75% of the physicians, nurses, and pharmacists this institution trains stay in California.
Another example: over 114 start-up companies–$30 billion worth–can trace their existence back to UC Berkeley’s engineering school. And these are companies that both give jobs to Californians, and lay the groundwork for our competitive economic future.
And that’s not to mention the 61,000 students we graduate every year, or the 4.2 million patients we serve.
But in spite of these and many other undeniable data points, we are jeopardizing the critical California-UC relationship that made them possible.
The pattern of disinvestment and its consequences:
And that threat has been obvious for some time. For starters, the University of California currently sits at the bottom of a 20 year funding slide.
We receive the same amount of funding that we did in the late 90s, but we serve 73,000 more students.
That’s as many additional students as are currently enrolled in UC Berkeley — and UCLA.
In the last three years, this funding slide accelerated — in fact, the speed has been downright scary.
In response, UC has made enormous cuts.
We laid off nearly 3,500 employees, and left an equal number of positions unfilled.
We froze staff salaries for the last four straight years, and imposed furloughs for all employees — including myself, and including tenured faculty.
We eliminated cost-of-living adjustments for our faculty for the last four years. And our faculty salaries now trail peer institutions by 12%.
We assigned cuts of 6% to 35% to our campus academic and administrative units.
And we significantly restricted all travel and purchasing — by 60% in the Office of the President alone.
What we’ve done proactively; impacts through the system:
Now, we’ve been proactive. We have tried to minimize cuts and eliminations as much as we could — largely through streamlining and consolidating programs and positions whenever possible.
For example, we implemented the “Working Smarter” initiative, which seeks to capture $500 million over the next five years through savings and cost avoidance measures, and to improve service at the same time.
And we’ve also undertaken targeted projects, like the energy conservation projects we hope will generate cumulative savings greater than $250 million.
But despite system-wide cuts from the central office, savings through efficiencies and the like, the pain has passed down to the campus level in profound ways.
We witnessed our total faculty level decline at Irvine, eliminated some degree programs at Berkeley, and significantly reduced library hours at Riverside.
We lost graduate academic students at UCSF, we lost research revenue at San Diego, and we even lost phone lines at Santa Barbara.
We cut course offerings at Santa Cruz, and we instituted a voluntary separation program at Davis.
We consolidated departments at UCLA, and we delayed staff recruitment for as long as possible at Merced.
And campus by campus, our faculty hiring is essentially frozen, classes are getting larger, the number of TAs is declining, course access is increasingly a problem, and, fairly soon, the time to degree completion could be considerably lengthened.
Now, the foundation of UC’s quality is its faculty. And if we don’t have these warm and talented bodies to apply for and conduct our research, then fewer products will be developed, less medical research will occur, and fewer spin-off companies will be created — all of which translates to fewer jobs for California.
And, finally, there’s the most painful and difficult impact of all — in response to actions in Sacramento, we had to raise student fees. By 40%. In less than four years.
And so, even as we continue to turn over every desk and cut every corner looking for new savings, we must be clear — further efficiencies, at this point, aren’t going to save a whole lot more.
2011-12 FY challenges and response:
Now, at the moment, we face a proposed $500 million funding cut for FY 11-12.
And for the last several months, we have tried to accommodate this cut.
First, in anticipation of this funding reduction from Sacramento, our regents approved an 8% student fee increase this past November — a measure that still would only cover 20% of the proposed cut.
Second, we began undertaking a variety of additional administrative adjustments, “one-time” savings, and further lay-offs.
But the proposed funding discrepancy is so great that substantive cuts will really being pushed to the campus level, and they’re looking at cutting real programs.
In other words, the bottom of the barrel is clean. We finished scraping it a while ago.
All-cuts will greatly compound the situation, fees:
This means that if we face further reductions — specifically, if the legislature passes an all-cuts budget — then only a dire course of action remains open to us.
And that course of action will be to raise student fees.
Let me be clear: we don’t raise fees. Fees rise in response to actions in Sacramento.
And they will rise dollar for dollar for what Sacramento cuts. And we will likely be forced to move to a high fee/high financial aid model.
Now, this is the short term.
Long-term view and stakes:
For the long term, we need to pull back a bit and look at the big picture.
You know, we built the University of California on three principles: quality, affordability, and access.
And for 143 years, we have held firm to those principles — through recessions and depressions, through world wars and culture wars, and through every other rite of passage that has both unsettled and transformed our California.
But today, right now, we are clinging to the very three principles — quality, affordability, and access — that made both this university and this state extraordinary.
And our fingers are slipping. In fact, unless we regain a firm hold, we are going to lose one of these principles.
It won’t be quality — that won’t happen on my watch. And it shouldn’t happen on yours. Quality is not a boomerang. Once it’s gone, it doesn’t come back.
So it will either be affordability, or access.
Now, we want to work with the state in a true fiscal partnership. We are committed to implementing a “re-set” of the state’s investment, in the form of developing a five-year funding plan.
And this five-year plan’s objective would be to establish long-term fiscal stability — so that we can affirm our quality bedrock, and keep the doors wide open for eligible Californians.
Thank you.