Budget Deficit Surpasses Predictions
Californiastate Governor Jerry Brown recently announced that the state has accrued a budget deficit of $16 billion, far worse than the $9 billion deficit estimated in January.
The governor had planned to make $2 billion worth of cuts and raise $7 billion with a new revenue initiative; however recent calculations revealed an even larger chance of cuts.
“We’re part of something much larger,” Meredith Michaels, UC Irvine’s vice chancellor of planning and budget, said. “We’ve come out of this huge recession, federal fiscal deficit, state structural deficit.”
The University has already had to deal with almost $100 million worth of cuts from the state along with mandatory funds, which led to an adjusted budget of about $236 million. Although state contribution makes up only a portion of the revenue that comes into the University, the severity of the state cuts required major action. Other forms of funding come from private donations, housing revenue, the hospital income, student fees, out-of state fees,UCIextension, and federal funding.
“Everybody was asked to reduce their budget but, the highest priority was in the academic areas.” Michaels said. “
The academic units took cuts of about 2-5 percent, while some administrative areas took cuts up to 25 percent. Tuition fees were increased, faculty and staff salaries were cut by 10 percent, and staff positions were reduced. This has forced faculty members to teach additional courses with larger class sizes, leaving them less time and attention to devote to each student.
In a struggle to offset the consequences of the budget deficit, the University began increasing admission rates for out-of-state and international students, which provides greater revenue than accepting in-state students. Moreover, the university decreased the amount of off-campus leased space to further cut costs.
“It was a watershed year for the university because this was the year that it flipped and for the first time, students were contributing more than the state,” Michaels said.
For the first time, each individual student was paying about $8,310 for their education, while the state was only paying about $6,750 per student.
In the 1990-91 school year, the state was paying about $16,720 per student, while each student was paying about $2,680. In the last 20 or so years, the state has cut University funding by over half of what it used to be.
In the 1990-91 school year, the state was paying about $16,720 per student, while each student was paying about $2,680. In the last 20 or so years the state has cut University funding by over half of what it used to be.
“For my family it’s been a little tough because they’re immigrants and work blue-collar jobs to support my sister and me in school,” said Alex Khou, a fourth-year majoring in business information management.
Unfortunately, the state’s current situation predicts even more cuts to public education. In January, the estimated cuts to the University were about $100 million and perhaps $200 million if the governor’s new revenue initiative does not pass on the November ballot. Now, the University might be facing cuts up to $250 million if the revenue initiative does not pass in November. While the state promised to give the University $90 million to cover retirement costs in January, now, the state is only offering $52 million.
“We’re at risk,” said Vice Chancellor Michaels. “I think that higher education is really at a crossroads. We’re the engine that runsCaliforniaand the state needs to understand that.”
“I think that if the state has education as one of its lower priorities, expect a workforce that is not as skilled and expect students to go to cheaper schools or drop out,” Khou said. “Quality is going to take a hit.”
Currently, the Budget Work Group, the Academic Planning Group, the Dean’s Council, and the Academic Senate are working together to plan what steps the University will be taking to deal with the anticipated state cuts. However, final plans cannot be made until the exact numbers are finalized after the November ballets.
“I think students have to make their voices heard in a really productive way because investing in the University really is investing in the future,” Michaels said. “They need to be informed that what’s on that ballet in November makes a difference in their future.”
As for how the University will deal with state cuts and where the money for mandatory expenses will come from, there are no definite answers.
“What will happen in this next year?” Michaels said. “I don’t know.”