UC at crossroads on budget cutbacks

by Clifton B. Parker
June 05, 2009

UC President Mark G. Yudof told legislators during a June 1 hearing that California’s commitment to higher education is “unraveling,” due in part to $800 million in state funding cuts to UC over the last 14 months.

Testifying at the Capitol, Yudof urged the Legislature’s joint budget committee “to arrest this race to the bottom,” and he expressed his hope for the preservation of Cal Grant financial aid for students — a program that Gov. Schwarzenegger seeks to phase out in his quest to fill the state’s $24 billion deficit.

Outside the committee room, Yudof said he “just can’t imagine” how the university can solve its budget crisis without furloughs, pay cuts and more layoffs. The system is looking at a $531 million gap in state funding for 2009-10, based on Schwarzenegger’s May budget revision — which the Legislature had not acted on as of midweek.

But while Yudof on May 29 announced a 5 percent pay cut for himself and other senior leaders, including chancellors, there had been no announcements regarding employees’ pay and work schedules as of June 3 when Dateline went to press.

Back on campus, Provost Enrique Lavernia said: “No decision to furlough employees or cut pay can be taken lightly. It’s a poor reward for the hard work and dedication that the faculty and staff of UC Davis bring to their jobs every day.

“But such a step could help us avoid more drastic measures later, and ease the transition to a more stable budget,” the provost said in a May 28 message to the campus community.

The Davis campus also is considering a voluntary separation program, said Karen Hull, associate vice chancellor for Human Resources. The UC Davis Health System and UC Berkeley have already implemented such programs.

UC Davis estimates a $68.2 million shortfall for 2009-10, based on Schwarzenegger’s May budget revision.

Budget planners estimate that six-day-a-year furloughs across campus (including the medical center) would cut wage costs by $33 million, including $10 million from general funds, based on 2007-08 payroll data. A furlough of two days per month — which already applies to many state employees — would save $130 million, $38 million from general funds.

“Should it become necessary to implement a program of furloughs or pay cuts at UC Davis in the context of a systemwide budget reduction strategy, we will attempt to do so with wide consultation and proper notice, and implemented in a way that is as fair and equitable as possible,” Lavernia said.

He said Staff Assembly’s recent survey “has already provided useful information that will be considered in designing any policy.”

Survey cites need for equity

Staff Assembly conducted the survey from April 8 to 20, and reporting collecting some 1,400 responses — with people answering questions and submitting 600 comments as well. The Staff Assembly Executive Committee reviewed the data and identified “what we believe would be a representative recommendation to the campus administration.”

The recommendations:

Furloughs are preferable to pay cuts and layoffs.
Furloughs should affect all employees equally.
Furloughs should be taken on the same days.
Furloughs should avoid impacting benefits and retirement calculations.

START participants should be given an opportunity to withdraw from the program before furloughs are implemented. START is the Staff and Academic Reduction in Time Program, under which eligible employees can reduce their percentage of time worked from 10 percent to 50 percent.

(From July 1, 2008, when START took effect, through April 2009, the university realized nearly $1.2 million in salary savings, the result of 182 employees participating in START. The program is not in effect at the health system.)

Furloughs should not be applied automatically to people who are already furloughed by various departments or operating units.

The university should provide a transparent process in its decisions, the impact of furloughs, and the benefits.

The survey section on equity drew 206 comments, many of which expressed “concern that faculty and senior administrators will not be impacted or will not be impacted in the same manner,” Staff Assembly declared in a summary.

Several people suggested a tiered system, in which people at lower salary scales would be subject to fewer furlough days or none at all.

Other comments suggested that furloughs would be unfair to people who are not paid with state funds, and that furloughing such employees would adversely impact research. Indeed, some researchers responded quickly to the provost’s May 28 memo, saying they hope to be exempted from furloughs.

Nevertheless, the Staff Assembly Executive Committee stated: “It would be very difficult to have people in the same department treated in different ways in a furlough implementation because of their classification, their source of funding, or their standing in either an academic or nonacademic position.”

The Executive Committee acknowledged that furloughs have their limitations, especially for academic and exempt employees, many of whom work long hours at night and on weekends and holidays.

“However, Staff Assembly recognizes that it may be far more important to consider equity and avoid a divisive force that would impact the university in far more profound ways than monetarily.”

For now, administrators do not have the answers about how a furlough program would work, pending direction from the Office of the President.

Cal Grants in jeopardy

At the June 1 legislative hearing, Yudof joined the leaders of the California State University system and California Community Colleges, and hundreds of students in pleading for the preservation of Cal Grants.

More than 46,000 UC undergraduates receive Cal Grants, which provide $293 million for students from lower-income California families. Cal Grant recipients at UC Davis total 7,083 in 2008-09, receiving a total of $48.8 million.

The governor’s phase-out plan would eliminate all new Cal Grants starting in 2009-10; at UC Davis, this would mean the elimination of some 2,060 awards. Existing grants would be renewed, but without additional money to cover systemwide fee increases, affecting some 5,000 awards at UC Davis.

In comments following his testimony to the legislative committee, Yudof said, “The effect on families making less than $60,000 is really unbelievable.”

Max Mikalonis, who said he expects to graduate from UC Davis in December with a double major in political science and economics, testified to the importance of Cal Grants in supporting UC students’ contributions to California and all of society.

The former president of the Davis College Democrats said he has received $7,500 to $8,000 a year in Cal Grant money. “It’s enabling me to pursue a career in public service,” said Mikalonis, who started at UC Davis as a biochemistry major.

‘Setting me up for success’

Stephanie Alder testified not so much as a UC Davis student but as someone who benefitted from Extended Opportunity Programs and Services, or EOPS, at Woodland Community College. She began her college education at UC Davis in 2001, but ended up leaving due to financial problems.

“It was a blessing in disguise,” she said, noting that she was not ready for UC. She said she started over at Woodland Community College, where EOPS “set me up for success.”

Now Alder is back at UC Davis as a third-year student majoring in human development and psychology.

She joined dozens of community college students from around the state in urging legislators to maintain EOPS funding in the state’s two-year colleges.

UC faces the loss of its academic preparation programs for kindergarten through 12th-grade students, budgeted at $31 million.

This potential cutback, along with the loss of Cal Grants and other state funding, threaten the access that UC is known for, Yudof said.

Citing data that has been adjusted for inflation, he said state funding provided nearly $16,000 for each UC student in 1990. By 2005, state support had declined to the range of $10,000, and, if the governor’s May budget revision is enacted, state support will drop to $7,700.

“In many ways this will be the unraveling of the Master Plan for Higher Education,” he told legislators.