UC Regents Declare State of Financial Emergency, Approve Furlough Plan

As expected, the full board of the UC Regents on July 16 voted to approve the furlough plan recommended by UC President Mark Yudof last Friday.

The board approved the plan with a 20-to-1 vote, with ex officio Regent Lt. Gov. John Garamendi voting against it. On Wednesday, Garamendi had urged UC officials to endorse AB 656 introduced in February by Assembly Majority Leader Alberto Torrico, D-Fremont, a bill that would tax oil and natural gas companies to create a stable, dedicated funding source to augment state support for California’s public colleges and universities.

The furlough plan is one of a set of actions by UC and the campuses to offset an anticipated $813 million reduction in support from the state general fund. Read the full new release on the UC Office of the President website.

The Regents declared a state of financial emergency for the 10-campus system and heard all 10 chancellors on Wednesday talk about the extraordinarily negative impacts these budget reductions are having on the campuses.

Each chancellor described bigger class sizes, elimination of courses and programs, staff layoffs, and dramatic cutbacks in faculty recruitment. Those actions will ultimately lead to lower graduation and student retention rates, they said, as well as declines in research activities and community services.

At UCSF, nine of 11 graduate programs are limiting enrollment, and the nursing program has closed down a community family clinic that served more than 1,700 patients, according to Chancellor Mike Bishop, MD.

This week was Bishop’s final appearance as chancellor before the UC Regents. On Thursday, UC Regent Richard Blum commended Bishop for his 11-year service as chancellor of UCSF and for his leadership, academic vision, good humor and commanding intellect.

Bishop’s successor, Chancellor-elect Susan Desmond-Hellmann, MD, MPH, will take the helm on Monday, Aug. 3. She will be faced with more tough decisions on how to handle shrinking state financial support in the months and years ahead.

UCSF took a 6 percent cut in its state funds during fiscal year 2008-2009 and since then has been assigned two sequential cuts for fiscal year 2009-2010, which total approximately 25 percent of its state funds.

UCSF is guided in its budget cutting by a set of principles, which are available on the UCSF Budget website.

Underlying these principles is a commitment to sustain the quality of the programs that serve UCSF’s 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 catalogue pricing; consolidation of administrative functions; reductions in the workforce through elimination of vacant staff positions, where possible; and slowing of academic recruitment.

UCSF has laid off more than 140 campus employees in fiscal year 2008-2009, according to Mike Tyburski, director of campus Human Resources. Tyburski expects more campus employees will be laid off this fiscal year.

Sharing the Pain

More than 108,000 full-time-equivalent positions out of a total of 135,000 are affected by the one-year, systemwide furlough plan, effective Sept. 1, 2009. Under the plan, UC faculty and staff will be required to take from 11 to 26 furlough days – amounting to a salary reduction of 4 percent to 10 percent – with higher earners being forced to take more furlough days and steeper pay cuts.

The specific number of furlough days each employee will take is based on a sliding scale across seven pay categories, ranging from those who make under $40,000 to those who earn more than $240,000.

Reduced work days for members of UC’s senior management group will be restricted to a maximum of 10 furlough days per year, even though their actual pay cuts will be among the highest. Additionally, senior managers who agreed to a voluntary 5 percent pay cut in May will have their salaries cut an additional 5 percent under the furlough program.

Yudof said the plan was guided by a principle of shared sacrifice.

“There is no doubt that these reductions will be painful for our faculty and staff,” Yudof said. “Unfortunately, the University is facing a financial crisis unprecedented in the past quarter century, and everyone is going to be called on to be part of the solution. No plan is perfect, but we have worked hard to make it as fair as possible while preserving, to the extent possible, excellence and access to opportunity for students, researchers and patients.”

Related Link:

University of California Budget News