UC President Richard Atkinson has proposed a fundamental change in the system under which the University allocates money to its campuses.
The proposal would do away with "weighted" funding for added enrollments, under which proportionately greater amounts of funds are allocated to campuses for certain classes of students, such as graduate students or upper-division undergraduates. The new system would instead provide campuses with a flat $8,400 per additional student, regardless of student status. (The figure is the sum of $6,800 per student for instruction and research costs, and $1,600 per student for facilities costs.) These funds would be provided, however, as increments on top of existing campus base budgets, with 1995-96 serving as the base-budget year. Thus, existing weighted funding would remain in place for UC's campuses; what would change would be the way in which future enrollment growth would be funded.
The proposal also would also bring about a change in the way UC funds many of its professional schools. Health science, business and law schools that now levy special professional school fees would in the future receive no funding for enrollment growth and no price increase money for anything other than salaries. In addition, capital outlay funding for these schools would be limited to funding for life-safety, "infrastructure," and renovation projections.
In short, the president is proposing that the University cease using state money to fund any growth in certain professional disciplines; future growth would have to be funded from differential fees paid by professional school students. Current base budgets would be funded, however, along with the cost-of-living, merits and "parity adjustments" connected to salaries. Health sciences programs that currently are "over-enrolled" -- that is, which are educating more students than they have been funded for -- will be able to reduce their enrollments without penalty.
The proposal would also greatly lessen the degree to which state funds are designated for specific purposes on the campuses. Whereas now campus allocations flow from the Office of the President to campuses in specific categories, such as maintenance or library acquisitions, in the future campuses essentially would get money under a block-grant formula that funds enrollment growth by headcount and cost adjustments based on the 1995-96 budget years.
In a February 2 letter to UC's chancellors and to Academic Council Chair Arnold Leiman, Atkinson noted that "it is my intent to implement this plan as soon as possible. Certain components can be instituted as early as July 1996, while other elements will need to be phased in over the next two to three years." UC's Director of Budget, Larry Hershman, said the plan has been generally well received thus far. "We've consulted with the chancellors, who by and large want to do this." The Senate's lead committee in reviewing the proposal, the University Committee on Planning and Budget (UCPB) is undertaking a detailed analysis of it. Committee Chair Roger Anderson says his initial look at the plan has indicated it "is basically a good way to go because it will remove some of the distortions [from University budgeting] and make it easier to do planning."
The distortions Anderson is referring to have to do with the current system of providing funds to campuses through means of the differential "weighting" of students by category. In funding faculty positions, for example, the current formula provides one faculty position for every 28 students in a weighted average. Under this system, a lower-division undergraduate counts as one student, an upper-division undergraduate as two, a master's degree student as 2.5 and a Ph.D. student as 3.5.
This kind of weighting is carried out not only with faculty positions, but in connection with many aspects of the University's budget. For example, libraries are funded at a given number of acquisitions per type of student, and academic support money flows to campuses in a differential way by discipline.
What this has led to, many UC budget experts feel, is an incentive for campuses to jigger academic plans in order to capture a greater number of faculty positions and other resources. The new system theoretically would provide no such incentive. With respect to the mix of students on a campus, the $8,400 figure, Hershman says, should be sufficient to provide not only for undergraduates but for "a systemwide average of graduate students at the margin." The money should be sufficient, in other words, for campuses to add graduate students to their student mix in a proportion comparable to the systemwide average of graduate students. If borne out, this prediction would be of great importance to "developing" campuses such as Santa Cruz and Riverside, which have long sought to increase their proportion of graduate students. The net effect of this, Anderson says, should be that "campuses can choose how they want to grow" without the distortions introduced by weighted funding.
The second major benefit of the president's plan, Hershman says, is that it would "allow campuses to plan realistically for the future." In the past, he says, campuses could always entertain notions that if they came up with particularly compelling arguments, they might be granted a disproportionate share of state funds for such purposes as increasing graduate enrollments. What the new system will provide, he says, is a very clear picture of what future resources will be: $8,400 per student plus fixed cost increases.
Anderson notes that the viability of the president's plan hinges on its details, which have yet to be spelled out. It's easy to see, he says, that campuses could still end up jockeying for position under the new system. Imagine a scenario in which a mature campus, with a large proportion of graduate students, decides in the future to add students disproportionately at the undergraduate level. Such a campus would benefit financially, since the $8,400 per-student figure is intended to cover costs for a range of students -- from inexpensive freshmen to expensive doctoral -- and yet would be used in this instance predominately to pay for undergraduates. And, thanks to the fact that the 1995-96 base is preserved in the plan, such a campus would still have a healthy proportion of graduate students.
All parties are agreed that a critical component of the new plan will be the development of solid enrollment plans by all the campuses -- plans that can be defended not only within the University, but before the state legislature, which will be asked to come up with the per-student funds.