The University of California rolled out its proposed budget for 1997-98 in October, with the watchwords for it being "continuation" and "stability." A few new items were added to UC's budget request, however, and its provisions made clear that the University has a growing problem with the adequacy of its physical plant.
UC's budget proposals have, in recent years, been strongly conditioned by the four-year "compact" the University signed with Gov. Wilson in 1995. That agreement calls for UC to receive state-funded increases of 4 percent per year, both next year and in 1998-99. In October, UCOP proposed asking for exactly that from the state (an $80.5 million addition), and made a case for a $55.5 million budget augmentation gained from other sources, chief among them a proposed general student fee increase (of $330), as well as increases in professional school fees and non-resident tuition. A net of $4 million would also come from one of the new items in the budget, an "Instructional Technology Fee." Under the administration's proposal, students would be assessed $40 for the fee in 1997-98, a figure that would rise to $200 over the next several years. (See Instructional Technology Fee story.)
General fee increases of 10 percent per year are called for in the governor's compact and the $330 increase proposed for 1997-98 is in line with this provision. For the last two years, however, the state has "bought out" similar proposed fee increases by providing special augmentations to UC's budget. Whether this will take place next year is unknown, but it is clear that such buyouts are not an unalloyed benefit to the University. If the state buys out next year's proposed increase, it will have covered nearly $100 million of such fees in three years. The feeling among UC budget experts is that state funding of UC is a zero-sum exercise; to the extent that the state is covering student fee increases it is unable to pay for other, perhaps more needed, University expenditures. With next year's budget request, state support of the University would rise to slightly more than $2 billion, a figure that shows how severe the budget cuts of the early 1990s were: $2 billion in state support is less than UC received in 1989-90.
The proposed budget calls for UC faculty salaries to continue their movement back toward parity with the salaries paid by "comparison-eight" institutions. All UC employees would receive a 2 percent cost-of-living adjustment under the proposal, but faculty would, in addition, receive a 3 percent "parity adjustment." Once this becomes effective (in October 1997) UC faculty salaries would lag comparison-eight salaries by about 3 percent - a lag that UC expects to erase altogether in 1998-99. The administration held out the possibility, however, that the faculty salary lag could entirely be made up next year, rather than in the coming two years. Should additional state funds become available, the Regents were told, UCOP's highest budget priority would be an acceleration of faculty salary increases. An additional $16.9 million in state funding would be required to reduce the faculty salary lag to zero in 1997-98.
The budget proposal calls for non-resident tuition to be increased by $590 next year (to a total of $8,984), but the administration noted in its presentation that it would like to lower non-resident fees for doctoral students who have been advanced to candidacy. The move is aimed at retaining top-notch foreign students who come to UC for graduate education. U.S.-born graduate students ordinarily become California residents after a year in the state, but foreign students may not be granted California residency. A reduction in fees for students advanced to candidacy would be in line with the practices of other major research universities and would "allow UC to continue to be competitive for the best graduate students," UC Budget Director Larry Hershman told the Regents.
The budget presentation made clear that UC has both short- and long-term problems with its physical plant. In the short term, UC annually receives some $60 million less than it requires to maintain its buildings. As a result of years of this underfunding, the University currently has a backlog of more than $480 million in deferred maintenance. "This is a terrible problem," Hershman told the Regents. "Our dilemma is that we have no money in the budget for deferred maintenance. None." A four-year plan was approved by the Legislature last year to begin to address this problem, but it was dealt a setback when Gov. Wilson vetoed a $7.5 million legislative appropriation for it. Next year's budget calls for another appropriation of $7.5 million (matched by UC), but it remains to be seen whether this will be funded.
UC's problem in the long term is not just maintaining the buildings
it has, but having the funds to construct new ones. The University
currently has adequate space to carry out its research and teaching,
UC budget officials say, but in coming years it will need about
$250 million annually in capital funding to construct the buildings
it needs, assuming moderate enrollment growth. State officials
project, meanwhile, that the most UC can hope for in capital funding
in the future is about $150 million annually (the amount it now
receives). The limit on this figure is driven in large part by
California's debt-service load, currently at an all-time high.
The disparity between capital need and available resources grows
if larger enrollment increases are factored in, and grows still
more in connection with plans for a 10th campus. At present, UC
budget officials say, they cannot see a solution to this dilemma.