Pillars of Quality: The University of California at a Crossroads
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- Naomi Cathleen Riley
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1 Pillars f Quality: The University f Califrnia at a Crssrads Executive Vice President Nathan Brstrm Senir Vice President Daniel M. Dley Vice President Patrick J. Lenz March 29, 2012
2 A snapsht f UC in 2012 Faculty psitins unfilled Dramatic reductin in staff Fewer class fferings Larger class sizes Prgrams reduced r eliminated 2
3 Mandatry csts are explding Pensin csts alne will rise t $1.8 billin annually in the next five years Ttal Systemwide $ $ in 000s 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,
4 Fur Pillars f Quality A sustainable funding mdel fr UC requires fur pillars f supprt A stable funding relatinship with the State Wise stewardship f UC s financial resurces Leveraging the ther strengths f UC Predictable funding frm ther financial surces, including student tuitin 4
5 Pillar #1 UC s fraying relatinship with the State Over the last tw decades, UC has had 11 years f State cuts 7 in the last decade UC tday relies n the same abslute level f funding as in , even thugh it educates 73,000 mre students, perates ne additinal campus, and ffers scres f new prgrams and degrees Overall amunt spent per student frm UC s cre surces f funding has declined by nearly 20% in the past 20 years State s cntributin t UC, n a per-student basis, has declined by 60% since
6 Pillar #2 Wise financial stewardship Implementing efficiencies and rganizatinal restructuring thrugh Campus effrts Systemwide Wrking Smarter initiatives Wrking Smarter targets $500 millin in psitive fiscal impact Financial management Risk management Energy strategies Enterprise systems 6
7 Pillar #3 Leveraging UC s ther strengths UC enterprise is bth strng and diverse Research Private philanthrpy Medical enterprise Other pprtunities Nnresident student enrllments Self-supprting academic prgrams 7
8 Pillar #4 Predictable funding frm ther surces Decline in State funding has created uncertainty and vlatility in UC tuitin plan Striving fr a tuitin plan that is Mderate Affrdable Predictable Prtecting lw- and middle-incme students Increases in student tuitin are generally in respnse t State funding reductins 8
9 UC cannt rest n just tw pillars UC needs A cnsistent and reliable funding agreement with the State A student tuitin plan that prvides mdest and predictable increases t the benefit f bth UC campuses and students and their families 9
10 UC s Budget Shrtfall $1,000 $1,112.5 millin $1,112.5 millin $750 Mandatry Csts, $362.5M Shrtfall, $846.7M $500 $250 $0 State Supprt Reductin, $750M Additinal 9.6% Tuitin Increase, $150M* Nvember % Tuitin Increase, $115.8M 24% Dllars in millins. * Annualized revenue impact. 10
11 Gvernr s UC Budget Prpsal State General Funds General Obligatin Bnd debt service State s bligatin t UCRP Increase in UC s LRB debt service Annuitant health benefits Shift Subject Matter Prject funding t State Department f Educatin Ptential buy-ut fr tuitin Mid-year budget trigger reductin if Gvernr s revenue initiative fails $2.57 billin millin 90.0 millin 10.2 millin 5.2 millin (5.0 millin) $125.4 millin ($200 millin) 11
12 Gvernr s UC Budget, Capital Facility Financing $2.5 billin f lease revenue bnd (LRB) bligatin will shift t UC s balance sheet (debt service fr LRBs already in UC s base budget) UC will retain savings if debt service reduced belw level and gain flexibility in cnstructing buildings General bligatin bnds will nt shift t UC, thugh debt service will be included in UC s base fr calculating base budget adjustment UC will cntinue t participate in future general bligatin bnd initiatives Increase each year culd be used t finance a regular and predictable capital utlay prgram 12
13 Gvernr s Cal Grant Recmmendatins Use federal TANF funds t ffset Cal Grant csts ($736 millin) Raise Cal Grant grade pint average requirements ($131 millin) Change Cal Grant award amunt fr independent, nnprfit clleges and universities frm $9,708 t $5,472 ($112 millin) Change Cal Grant award amunt fr private, fr-prfit clleges and universities frm $9,708 t $4,000 ($59 millin) 13
14 Gvernr s UC Budget, Prpsed Multi-Year Agreement Seeks lng-term fiscal stability fr the University Annual base budget adjustments, beginning in Mderate, predictable, affrdable tuitin and fee increases Accuntability metrics graduatin rates, CCC transfers Changes in the funding f UC s Capital Imprvement Prgram 14
15 Gvernr s Revenue Initiative Increase persnal incme tax (PIT) n annual earnings ver $250,000 fr seven years Increase sales and use tax (SUT) by a quarter-cent fr fur years Adds t Cnstitutin a tax shift t lcal gvernments t pay fr incarceratin and State services realigned in 2011 Allcates temprary tax revenues with 89% ging t K-12 schls and 11% ging t cmmunity clleges. Revenues cunt tward Prp 98 minimum guarantee, ptentially freeing up millins f dllars fr ther purpses 15
16 Gvernr s Revenue Initiative Estimated revenues in : between $6.8 billin (LAO) and $9 billin (DOF) Estimated revenues in thrugh : between $5.4 billin (LAO) and $7.6 billin (DOF) Estimates vary due t vlatility f PIT revenues UC and CSU wuld face $200 millin mid-year trigger cut if measure fails 16
17 17
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