CoTF – Fiscal Challenges and Strategies


Continuing Liveblog, EVP Nathan Brostrum (hailing from UC Berkeley) is now talking about the fiscal context which the UC is now worknig on for the next couple years.  He’s trying to give context for the new budget situation which the CoTF is working on right now.

Even if the Gov’s budget passes in favor of the UC – we’re still be facing a 237m of Budget Gap. Over the past 20 years, the state has declined from 16.5k per student in 1990, to now 7.5k in 2010.  That’s 54%.  That means student fees have gone from 2.6k in 1990 to 6.3k 2010.

“We’re coming to a time where the contribution from the students will soon outpace the contribution from the state”

In the past two years, ~4,000 positions have been eliminated from our campuses.  Those are people’s jobs who have been lost.

This is the big one: by 2020, we will have a budget gap of 4.9billion dollars between our estimated costs, and our estimated income.  DAMN.  In four years, we’re facing a gap of 3.2B.  This is no increase in student fees, no budget increase, etc.etc.

Major cost drivers in that model is inflation, with over 2.5Billion dollars.  The other one is Retirement and Annuitant health costs – 700m and 900m respectively.

Fee increases obviously will not provide muchof an answer – with a yearly fee increase of 4%…even with a state budget increase annual of 4%…will still leave us with 2.9B gap in 2020.  We need a drastic shift in public funding, apparently!

The model presented to the CoTF to match the cost drivers, include ~11% annual fee increases, plus a 15% onetime extra jump on fee increases.  Overall production, over 2.3B dollars by 2020 created.   EVP Brostrum characterizes it as a “draconian fee increase”.  It’d also double the number of nonresident students…would create 175m dollar budget revenue.

Gould: Every Director of Finance report shows 20b deficit for the next several years.  We’re looking at needing something like 1.7b extra revenues needed for UC to be proficient.

Also a good note brought up by Alan Zuckerberg – the 4.9b gap doesn’t include our salary lag to the market with workers, staff, and faculty.

Yudof: The cost of instruction/cost of a credit hour has not increased very much – to the cost of inflation.  The Student fees have gone up so much not because faculty are more expensive, but because the state subsidy has decreased so much.  “The state’s co-pay!”

Yudof just affirmed that the state government is privatizing the public higher education by reducing our costs co-pay.

Victor Sanchez (UCSA): Notes that Regent’s Priorities don’t include low student fees…just financial aid.  Also, notes that the Regents haven’t projected out any of the alteratnative creative revenue creation.

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One response to “CoTF – Fiscal Challenges and Strategies

  1. University of California Berkeley. Fiscal context of Cal Chancellor. A legacy of waste in UC Berkeley Chancellor’s Office: easily grasped by the public, lost on University of California’s President Yudof.
    The UC Berkley budget gap has grown to $150 million, & still the Chancellor is spending money that isn’t there on $3,000,000 consultants. His reasons range from the need for impartiality to requiring the consultants “thinking, expertise, & new knowledge”.
    Does this mean that the faculty & management of UC Berkeley – flagship campus of the greatest public system of higher education in the world – lack the knowledge, integrity, impartiality, innovation, skills to come up with solutions? Have they been fudging their research for years?
    The consultants will glean their recommendations from faculty interviews & the senior management that hired them; yet $ 150 million of inefficiencies and solutions could be found internally if the Chancellor & Provost Breslauer were doing the work of their jobs (This simple point is lost on UC’s leadership).
    The victims of this folly are Faculty and Students. $ 3 million consultant fees would be far better spent on students & faculty.
    There can be only one conclusion as to why inefficiencies & solutions have not been forthcoming from faculty & staff: Chancellor Birgeneau has lost credibility & the trust of the faculty & Academic Senate leadership (C. Kutz, F. Doyle). Even if the faculty agrees with the consultants’ recommendations – disagreeing might put their jobs in jeopardy – the underlying problem of lost credibility & trust will remain. (Context: greatest recession in modern times)
    Contact your representatives in Sacramento: tell them of the hefty self-serving $’s being spent by UC Berkeley Chancellor Birgeneau & Provost Breslauer.
    Let there be light!

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