University of California Plans to Slash Spending


By CARI TUNA

The University of California was set to unveil plans for a sweeping financial and administrative overhaul that could reduce annual operating expenses by more than $500 million, as the much-scrutinized public university system moves to deal with a widening budget shortfall.

Under the efficiency plan, which will be presented at a UC Board of Regents meeting Wednesday, the system intends to streamline, consolidate and standardizeoperations across its 10 campuses. Among other things, UC plans to roll out common supply-procurement and human-resources systems to replace individual campus systems.

Other measures include accelerating energy-efficiency projects, consolidating information-technology operations and loaning campuses money for equipment leases in lieu of more-costly third-party loans.

The overhaul followed steps taken by universities nationwide to cut administrative fat amid falling state funding and withering endowments.

In total, UC’s plan was expected to save more than $500 million from its $20 billion annual budget within five years of implementation, including at least $100 million from supply procurement, UC officials said.

The plan will also result in administrative job cuts, though officials declined to say how many jobs would be eliminated, citing the early state of the restructuring.

“We’re forced to make some fundamental changes in the way this place operates,” said Peter Taylor, UC’s finance chief. “We don’t have a choice.”

[UCCUTS]

Robin Garrell, a chemistry professor at the University of California, Los Angeles and chair of its faculty body, welcomed an operational overhaul. “This is an area where there certainly are opportunities to save money with little impact on academic programs,” Prof. Garrell said. But, she added, “I would be wary of a one-size-fits all model,” especially for cutting administrative jobs, because “each campus has its own needs and character.”

Nationwide, in fiscal 2009, which began July 1, 2008, for most states, state funding for higher education fell $2.8 billion to $77.9 billion, though the drop was largely offset by $2.3 billion in stimulus funds, the State Higher Education Executive Officers, a nonprofit policy association, reported.

The UC system is closely watched as the nation’s largest university system by budget, and it has been hit particularly hard by California’s fiscal troubles.

Over the past two fiscal years, California has cut funding per student by 22% to $7,570, UC officials said. Adjusted for inflation, state funding per UC student has fallen 54% since the 1990-91 fiscal year, they said.

According to the State Higher Education group, excluding federal stimulus, total state and local funding for higher education in California fell 24% per student between the 1990-91 and 2008-09 fiscal years, compared with an 11% drop nationwide.

The budget shortfall for UC, which has around 230,000 students, has grown as a result. The budget gap is projected to rise to $1.2 billion for 2010-11 from $1 billion for the 2009-10 year, according to UC officials.

In response, UC has cut $232 million in operating costs over the past two years by laying off 1,900 workers, furloughing employees and cutting academic programs, among other measures. Some of the moves, including raising undergraduate fees 32%, have sparked student protests across the state that at times have turned violent.

Even with higher fees and a possible $305 million restoration in state funding, UC remained $237 million in the red for the coming 2010-11 fiscal year, officials said.

UC officials are considering other proposals to shore up its finances. One is to offer online courses for university credit, which drew sharp criticism from a group of UC Berkeley faculty last week.

Some fear such online courses could undermine faculty control over curricula and degrade instruction quality, said Wendy Brown, a political-science professor and co-chair of the Berkeley Faculty Association.

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3 responses to “University of California Plans to Slash Spending

  1. Pingback: It’s the May Regents Meeting! (MRM) « UC Regent Live(blog)

  2. This article was extremely interesting, especially since I was searching for thoughts on this subject last week.
    I have been coming to this blog for a couple of days now and i’m very impressed with the content!

    thanks & regards
    avid – online university

  3. University of California Berkeley. Chancellor finds $3,000,000 to hire consultants to do the woek of his job at the expense of students & faculty then fires 900 using Operationa Excellence (OE). Are you prepared to act? 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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