A brightening state budget picture prompted the University of California Regents to ask in November whether UC could bring its faculty salaries up to competitive levels within the next two fiscal years, as opposed to the three it has been planning on.
Following a discussion of the idea at their November meeting, the Regents went on to direct the Office of the President to make a case to the state for this kind of "acceleration" of faculty salary increases, and UC budget officials report they have now taken this request to the state's Department of Finance. The question is how the state's policy makers -- the governor and the legislature -- will react to the idea.
The Regents were moved to discuss the issue following the release of a state Legislative Analyst's report that predicted a $900 million surplus in state coffers by the end of the current fiscal year. The prime reason for the surplus is an upturn in collections of sales, personal income, and business taxes.
Within state government there is no shortage of ideas about what to do with unallocated funds of this sort. California Gov. Pete Wilson has indicated he is interested in reducing taxes for Californians and in building up a state financial reserve. Prison-building is an idea with a political constituency and, thanks to Proposition 98, K-14 schools would stand to receive about half of any additional state expenditures. This does not mean, however, that there is no room in state planning for a UC faculty salary increase.
"Is it plausible that we could get more money? The answer is yes," says UC's Budget Director Larry Hershman. "How do we stack up against tax relief or building up a reserve? I just don't know."
Under a four-year "compact" with the state agreed to last year, faculty salaries at UC are slated to be brought up to the level of UC's "comparison-eight" institutions over the next three fiscal years. This would be accomplished by trimming the current lag-to-parity, of 7.5 percent, by 2.5 points per year. Projections call for UC to grant merit and "range" increases of 6.5 percent per year over the next three years, while comparison-eight increases are predicted to rise by only 4 percent per year. The UC increases would have three components to them: merit adjustments of 1.5-percent per year, cost-of-living increases of 2 percent and "parity adjustments" of 3 percent.
If this movement to parity were to be accomplished in two years rather than three, one plausible scenario, Hershman told the Regents, would be for COLAs and parity adjustments to rise at a combined 6.5 percent in 1996-97, rather than the 5 percent called for now. The resulting total increase would presumably leave a 3.5-percent lag-to-parity to be made up in 1997-98. The "extra" cost of an additional 1.5-percent increase in 1996-97 would amount to about $8.5 million, Hershman said. This would come on top of the $17 million UC would need to fund the 3-percent parity adjustment that is part of the existing compact with the state.
The Regents seemed to be unanimous in their support for a faster closing of the salary gap. Every Regent who spoke to the issue agreed that increasing faculty salaries is the University's first priority. Academic Council Vice-Chair Duncan Mellichamp, who has been chairing a Senate subcommittee on faculty salaries, told the Regents that the faculty would "welcome an acceleration of the catch-up," particularly, he said, since the work of his subcommittee has convinced him that UC's current salary comparison methodology understates the size of UC's salary lag to some degree.
The movement on faculty salaries came within the context of the Regents' November adoption of an "expenditure plan" for 1996-97, a document that differs from a completed budget in that it does not specify what the University's sources of revenue will be for the year. The central stumbling block to adopting a full budget was student fees: Given UC's projected expenditures and its other sources of revenue, general student fees would have to be raised by 7.1 percent for the 1996-97 budget to be brought into balance.
Last year, however, a UC proposal for a 10-percent student fee increase brought such stiff opposition from the state Senate that the plan was dropped in exchange for a state revenue enhancement that made up for about three-quarters of the proposed increase. Given the continued sensitivity to fee increases, the Office of the President will not come to the Regents with a fee proposal until after Gov. Pete Wilson sets forth his state budget in January. A 7.1 percent increase would raise general student fees by $270, meaning that mandatory fees for California residents would average $4,409 across the system.