Prepared on behalf of the DFA Board by Joe Kiskis and Eric Hays
Brutally simplified version: As it stands now, UC will receive from the State either a 1.27% increase or a 10.9% budget cut depending on whether California receives additional federal money.
On June 15, the California legislature passed the first version of a budget bill for 2020-21. Following further negotiations with the governor, it was amended on June 22, and signed by the governor on June 29. These actions came during a period of unusually high uncertainty, and no one believes they will be the final word for the fiscal year beginning today.
More precisely, there are currently two versions of the of the budget: one that will apply if California receives at least an additional $14B from the federal government, e.g. via the Heroes Act, by October 15, 2020, and one if less than that or nothing arrives. The Heroes Act was passed in the House on May 15 and has been awaiting attention in the Senate since then.
For orientation, the total UC budget is about $40B/yr. However the part of that directly related to the central academic/educational mission (called core funds) is about $9.4B. The State contributed about 40% of that in 2019-20. The rest of the core funds come from student tuition and fees with an additional relatively small part from various University funds. At their November meeting, the Regents requested an increase of $404M from the state general fund for 2020-21. In the meantime the University has suffered both increased expenses and revenue decreases because of the COVID-19 pandemic. For example, UCOP mentioned revenue losses of about $1.2B for the March through April period. While these are real income losses, most of them were not on the revenue side of core funds.
With that context, here are the current versions of the two possible budgets for 2020-21 state UC funding. In the case that the federal money arrives in time, UC will receive $3,938M from the state general fund which is 1.27% or $49M larger than for 2019-20. Otherwise there will be a substantial cut with UC receiving $3,466M which is down from 2019-20 by $422M or 10.9%. Recall that the Regents’ request was for a $404M increase.
Again this is money from the state general fund. It includes support for central functions such as UCOP and the Division of Agriculture and Natural Resources (DANR) but excludes the state funding for the Hastings School of Law. Also this overview leaves out some details that involve smaller amounts of money. UC also receives some much smaller amounts from specialized state funds. In addition there is legislative language that specifies uses for a small fraction of the general funds.