Last quarter, the Council on Planning and Budget (CPB) reviewed the budget model for the 2015 fiscal year. This model is aimed at allocating funds for units that grant undergraduate degrees, after campuswide mandatory costs and strategic initiatives are funded. The model’s allocations were approved by Chancellor Howard Gillman and will be managed by Interim Provost Michael Clark.
For instructional workload allocations, $3 million will be allocated to workload adjustment and $2 million will be allocated to smoothing adjustment. An amount of $905,000 will be permanently allocated to non-salaried employee retention funding and an amount of $2,696,000 will be allocated as seed funding for new full-time equivalent faculty hires. This funding model is based on a formula that takes into account undergraduate instruction (as measured by student credit hours), number of majors, number of degrees awarded as well as time to degree.
During CPB’s November meeting, after reviewing the university’s budget, council chair Abel Klein reported that UC President Janet Napolitano did not consult with the CPB about the tuition increase, which was later voted and approved by the UC regents. However, the council did concur with the tuition proposal, as it saw no other alternatives. Chair Klein also reported that if Governor Jerry Brown does not give his previously promised 4 percent increase in state funds to the UC, the university will have to restrict enrollment of students who receive financial aid, increase enrollment of non-resident students, and reduce its return-to-aid formula. Currently, the 4 percent increase is contingent upon the university continuing to freeze its tuition.
In December, CPB analyzed the system-wide faculty salary costs in relation to the tuition increase. It found that UC faculty salaries lag by 12 percent in comparison to at least eight other institutions that are part of the General Campus Ladder Rank Faculty study. Compared with the same study’s findings in 2009, UC salaries has fallen even further below market from 10% under in 2009. The board reported that under the UC’s 3-year sustainability plan, UC plans on increasing the compensation of all staff, both represented and non-represented academic and non-academic staff by 3% each year for the next three years.
For faculty, this would be followed by a 1.78 percent merit pool, which makes it a total of 4.78 percent increase in salary for the next five years. The total salary and benefits costs for this plan is estimated at about $1.4 billion. In this regard, CPB recommended that the 3 percent general increase be an across-the-board salary increase, and proposed a faculty salary raise of 5.6 percent increase per year for the next five years, in order to close that 11.6% salary gap and keep pace with comparator institutions. This proposal will cost an estimated $1.65 billion for the five years.
The Council on Planning and Budget meets on a bi-monthly basis. We will provide another update of this board at the end of this quarter.