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Chancellor Reports UCSF Must Prepare for 25 Percent Cut in State Funds

Ongoing grim news about the state budget – which currently faces a $24.3 billion deficit – means more reductions in state funding on top of the cuts currently underway at UCSF.

Chancellor Mike Bishop, MD, noted in an email message to the campus community on June 17 that cost-cutting measures under consideration by UC officials will likely “affect all employees of the University . . . and involve straight salary cuts, furloughs, unpaid holidays, or some combination of these.”

Here is the full text of his message:

Dear Colleagues:

This past December, I wrote to you about the deterioration of the California economy and its impact on the University of California. As you all know, matters have only gotten worse during the interim. I write now to provide a brief summary of where things stand and what you might expect over the coming year.

UCSF took a 6 percent cut in its state funds during fiscal year 2009. Now we have been assigned two sequential cuts for fiscal year 2010, which total approximately 25 percent of our state funds.

As I explained in my December message, the leadership of the campus, its schools and the academic senate have been overseeing an intensive effort to cut costs in the coming fiscal year, an effort that extends from top to bottom across the campus and medical center. The principles that are guiding our budget planning were distributed previously and are available at: http://budget.ucsf.edu/stories/ucsf-adopts-budget-principles/.

Underlying these principles is a commitment to sustain the quality of the programs that serve our central missions, and to keep UCSF a humane and gratifying place to work. Measures that have been or will be taken include, for example, energy savings initiatives; procurement savings through consolidated contracting and catalog pricing; consolidation of administrative functions; reductions in workforce through elimination of vacant staff positions where possible; and slowing of academic recruitments.

To date, salary actions have been limited: a salary freeze on members of the Senior Management Group, and a voluntary reduction of 5 percent in the salaries of the President, his Executive and Senior Vice Presidents, the Chancellors, and the Executive Vice Chancellors/Provosts. But as circumstances continue to worsen, [UC] President Mark Yudof now has broader actions on salaries under consideration. You will receive shortly further information from the Office of the President regarding the options being proposed. The actions would be systemwide, affect all employees of the University except students, and involve straight salary cuts, furloughs, unpaid holidays, or some combination of these. The details will be worked out in time for President Yudof to take a proposal to The Regents in July.

Read the letter by Yudof describing three options for cutting costs here [PDF].

At present, one of the President’s proposals calls for a wage reduction of approximately 8 percent, but with possibly smaller reductions for our lower paid employees. The University is hoping to mitigate any impact of the salary cuts on retirement benefits, but whether and how this could be achieved has yet to be decided.

The news in this message is the last thing that I would like to be broadcasting during the waning weeks of my chancellorship. But the University of California faces what may be the greatest financial crisis in its long and venerable history, a crisis that can be surmounted only by drastic action, shared sacrifices and a strong sense of community. The UCSF community has demonstrated great resilience on many occasions in the past. I know that we can do the same now. We can make this our finest hour.

Sincerely,

J. Michael Bishop, MD
Chancellor