Academic Context for UC Budget. Presentation to The UC Board of Regents Committee on Finance Acting Provost Wyatt R. Hume

Transcription

1 Academic Context for UC Budget Presentation to The UC Board of Regents Committee on Finance Acting Provost Wyatt R. Hume UC Berkeley, November 16,

2 Regents guiding principles for the budget I. The quality of UC shall be maintained and enhanced quality is basic to delivering its mission and is the most important asset that UC offers the state. II. UC shall maintain access and affordability, and honor the Master Plan. The state needs the highly-skilled, well-educated graduates that are produced by UC. 2

3 University of California planning activities Long Range Guidance Team Task Force on Planning for Doctoral and Professional Education Health Sciences Strategic Planning process 3

4 Good news UC offers access and serves undergraduates well All eligible freshmen and transfer students are being accommodated UC enrolls high proportion of low-income students due to an outstanding financial aid program Undergraduates are engaged in their studies and in campus research activities Students are persisting and completing at record rates 4

5 Good news UC continues to excel at research and graduate education Graduate students UC is achieving modest graduate enrollment increases Faculty UC gets 89% of its first choice hires UC Federal research dollars are at record levels Campuses, schools, & colleges are highly ranked California businesses continue to be created from and depend on UC research and intellectual talent 5

6 But UC is nearing a tipping point on other academic indicators UC student/faculty ratio is too large Faculty salaries are not staying competitive Federal research increases leveling off Enormous capital needs Proportion of graduate students is low Graduate student support lags the competition 6

7 UC is Below Others in Percent Graduate 80% 60% 40% 23% 43% 34% 59% 20% Health Sciences 0% UC All 8 Comparison Universities Public Comparison Universities Private Comparison Universities All graduate students as a percent of total enrollment 7

8 Concerns about attracting top graduate students Inadequate student financial support Providing opportunity for California students to advance their education Enrolling talented U.S. students Growing barriers for international students 8

9 Summary UC continues to be a great academic institution but is near the tipping point on key indicators UC is increasing efficiencies, private support, and garnering more federal research funding Adequate state support is essential for UC to maintain quality and access UC must plan for the future to remain superb 9

10 10

11 University of California Working Smarter : : The Business Context for the UC Operating Budget Presentation to The UC Board of Regents Committee on Finance UC Berkeley November 16,

12 Campus Efforts to Reduce Costs by Gaining Efficiencies in Administrative Processes At UC Santa Cruz rethinking service delivery in Strategic sourcing E-procurement Human resources Academic and financial information systems and technology At UC Irvine 14 years of increased workload and enhanced service without increased staffing Administrative Employees vs. Workload Workload ( =1.0) Employees Handling this Workload

13 Challenge is reducing cost of doing business While accommodating unprecedented growth Enrollment (32% increase from to 03-04) 04) Housing (55% increase in beds) Instructional and Research Space (22% increase) Federal research funding (140% increase) Hospitals (14% increase in inpatient days; 15% increase in outpatient visits) And operating in an increasingly complex business environment Regulations and Statutory Mandates at UC Irvine Number of Regulations

14 And meeting the demand for more and better quality services Technology Services Now Required That Were Not Required 10 Years Ago High-speed Internet connection for every bed. Courses have Web sites and teaching and learning technologies. Wireless communication on all campuses. Data super highway for computer visualization and modeling. Online application and admissions information analyzed and distributed online. Network security to protect against hackers, viruses and spam. Web-based based access to employee benefits choices and retirement accounts. Real-time employee access to e and personal productivity tools. 14

15 The combined challenges of Reduced resources Unprecedented growth Increasingly complex business environment, and Demand for more and better quality services Means that we must continue to work smarter 15

16 Finance: Managing debt and modernizing accounting systems Refinancing debt RESULT: $65 million in present value savings Modernized financing structures Modernized endowment and investment accounting system 16

17 Human Resources/Benefits and IR&C: Increasing services and reducing costs Master Record Keeper Project RESULT: Improved and expanded services Renegotiated software licensing agreements and consolidated campus contracts RESULT: $25 million in avoided costs 17

18 Risk Services: Reducing the Cost of Risk Improved Workers Compensation Program Enterprise Risk Management Completed insurance renewal with enhanced coverage and $1.1 million in savings. Property Claims Management Accelerated Claims Closure Project Inclusion of EH&S in Risk Services Medical Review Vendors Training of Occupational Health Physicians Total Cost of Risk to UC in 2004 = $567.4 million Rate per $100 Payroll $4.50 $4.00 $3.50 $3.00 $2.50 $2.00 $1.50 $1.00 $0.50 $0.00 Workers' Compensation Loss Rates FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 Medical Centers Campuses Laboratories 18

19 Building and Operating UC Facilities: Reducing Costs of Project Delivery and Energy Streamlining Delivery of Capital Projects Completion of UC construction cost study in July 2005, with recommendations to be implemented Building Energy Efficient New Facilities RESULT: $4.1 million in annual avoided energy costs plus $5.0 million in rebates Retrofitting for Energy Efficiency in Existing Facilities RESULT: Nearly $2 million in annual avoided energy costs plus $5.5 million in incentives 19

20 Strategic Sourcing Initiatives: Savings From Completed Systemwide Contracts Implementation Date First Quarter Savings Estimated Annual Savings Xerox/Digital Copiers May 1, 2005 $ 340,000 $ 1,400,000 Lanier/Digital Copiers May 1, 2005 $ 604,000 $ 2,400,000 KST Data/PC's September 1, 2004 $ 1,000,000 $ 2,600,000 Fisher Scientific March 1, 2005 $ 635,000 $ 2,500,000 VWR March 1, 2005 $ 303,000 $ 1,200,000 OfficeMax August 16, 2004 $ 864,000 $ 3,500,000 Total Savings $ 3,746,000 $ 13,600,000 20

21 UC Libraries: Increasing services while reducing costs Maintaining regional library facilities (RLF) RESULT: $12.2 million in avoided capital and borrowing service costs Interlibrary loan RESULT: $31 million in avoided purchasing costs in California Digital Library (CDL) RESULT: $37.1 million in avoided purchasing and subscription costs by individual campus libraries 21

22 Legislative Achievements: Signed by the Governor: SB 439 (Simitian( Simitian) [private equity] RESULT: Protecting a portion of UC s s investment portfolio that has returned 37% annually over past 10 years SB 1100 (Perata( and Ducheny) ) [Medi[ Medi-Cal funding] RESULT: An opportunity for UC to secure $461 million in annual baseline federal funding Currently Sponsoring: SB 667 (Migden( Migden) ) [competitive bidding requirements] RESULT: If successful, an estimated $20 million in annual cost savings 22

23 Conclusion 23

24 PRIVATE SUPPORT Total Private Support to Millions $1,400 $1,200 $1.2 billion $1,000 $800 $600 $400 $447 million $200 $

25 PRIVATE SUPPORT Student Financial Support Millions $140 $120 $119 million $100 $80 $60 $40 $39 million $20 $

26 PRIVATE SUPPORT Additions to Endowment Millions $250 $200 $194 million $150 $100 $74.7 million $50 $

27 PRIVATE SUPPORT Total Giving as a Percentage of Core Expenditures at Selected Universities % 25.00% 20.00% 15.00% 10.00% 5.00% 0.00% 11.7% 25.7% 16.8% 28.5% 15.0% 4.6% 3.5% 8.7% 21.6% UC System Harvard MIT Stanford Yale U of Illinois System SUNY-Buffalo U of Michigan U of Virginia 27

28 28

29 Federal Budget Update The Deficit Matters Even More University of California Regents Meeting November 16, 2005 Bruce B. Darling Senior Vice President University Affairs 29

30 OMB Pre-Katrina Discretionary Spending Projections (July 2005) $ Billions of Dollars Defense and Homeland Security Spending Non-Defense Domestic Spending Year 30

31 We re working on a plan for pushing significant reductions in mandatory and discretionary spending..i encourage Congress to push the envelope when it comes to cutting spending. President Bush October 26, 2005 following a meeting with the Speaker of the House and the Senate Majority Leader 31

32 Non-Defense R&D Spending, FY (in billions of constant FY 2005 dollars) Budget Year Department of Homeland Security (DHS) NIH Non-Defense R&D minus NIH and DHS Source: AAAS Analyses of R&D 32

33 FY 2006 Proposed Cuts in Mandatory Programs: Potential Impacts HOUSE: Total cuts proposed = $54 billion over 5 years, including: Medicare none Medicaid $9.5B Student Loans - $14.6B SENATE: Total cuts proposed = $39 billion over 5 years, including: Medicare $5.7B Medicaid $4.3B Student Loans - $8.1B 33

34 Federal Budget Update The Deficit Matters Even More 34

35 UNIVERSITY OF CALIFORNIA November Budget Presentation Displays 1 29 that follow are tables and graphs to be used by Vice President Hershman in his oral presentation on the budget at the November 16 Regents meeting. They are being provided in advance of the meeting to allow time for review. In response to comments from several Regents, the annual presentation on the budget will involve a more integrated approach to help provide academic and administrative context for the budget proposal. This approach will involve presentations from President Dynes, Provost Greenwood, Senior Vice President Mullinix, and Senior Vice President Darling. Those presentations may be accompanied by additional materials that will be provided at the meeting. November 2005

36 UNIVERSITY OF CALIFORNIA UNIVERSITY OF CALIFORNIA BUDGET FOR CURRENT OPERATIONS AND EXTRAMURALLY FUNDED OPERATIONS E X P E N D I T U R E S I N C O M E Change Change Budget Proposed Amount % Budget Proposed Amount % ($000s) ($000s) ($000s) ($000s) ($000s) ($000s) BUDGET FOR CURRENT OPERATIONS BUDGET FOR CURRENT OPERATIONS Instruction: General Fund General Campus $ 2,121,849 $ 2,195,079 $ 73, % State of California $ 2,844,906 $ 2,976,058 $ 131, % Health Sciences 824, ,810 3, % UC Sources 554, ,477 8, % Summer Session 13,687 13, % University Extension 200, ,109 8, % Total General Funds $ 3,399,057 $ 3,538,535 $ 139, % Research 529, ,870 17, % Public Service 186, ,704 4, % Academic Support: Restricted Funds Libraries 267, ,057 4, % State of California $ 59,688 $ 60,586 $ % Other 490, ,982 16, % U. S. Government Appropriations 17,000 17, Teaching Hospitals 3,830,872 4,019, , % Student Fees: Student Services 426, ,062 9, % Educational, Registration & Professional School Fees 1,403,448 1,551, , % Institutional Support 499, ,404 12, % Extension, Summer Session & Other Fees 404, ,671 14, % Operation and Maintenance of Plant 490, ,822 8, % Teaching Hospitals 3,780,113 3,969, , % Student Financial Aid 509, ,632 45, % Auxiliary Enterprises 740, ,694 37, % Auxiliary Enterprises 740, ,694 37, % Endowments 162, ,648 6, % Provisions for Allocation 46,051 47,377 1, % Other 1,421,788 1,471,087 49, % University Opportunity Fund and Special Programs 209, ,482 5, % Program Maintenance: Fixed Costs, Economic Factors , , Total Restricted Funds $ 7,988,869 $ 8,434,167 $ 445, % TOTAL BUDGET FOR CURRENT OPERATIONS $ 11,387,926 $ 11,972,702 $ 584, % TOTAL BUDGET FOR CURRENT OPERATIONS $ 11,387,926 $ 11,972,702 $ 584, % EXTRAMURALLY FUNDED OPERATIONS State of California $ 211,089 $ 211,089 $ 0 0.0% EXTRAMURALLY FUNDED OPERATIONS U.S. Government 2,156,725 2,199,860 43, % Sponsored Research $ 2,478,300 $ 2,541,683 $ 63, % Private Gifts, Contracts & Grants 999,144 1,039,110 39, % Other Activities 1,447,672 1,484,160 36, % Other 559, ,784 16, % TOTAL EXTRAMURALLY FUNDED OPERATIONS $ 3,925,972 $ 4,025,843 $ 99, % TOTAL EXTRAMURALLY FUNDED OPERATIONS $ 3,925,972 $ 4,025,843 $ 99, % TOTAL OPERATIONS $ 15,313,898 $ 15,998,545 $ 684, % TOTAL OPERATIONS $ 15,313,898 $ 15,998,545 $ 684, % MAJOR DEPARTMENT OF ENERGY MAJOR DEPARTMENT OF ENERGY LABORATORIES $ 4,082,089 $ 4,082,089 $ 0 0.0% LABORATORIES $ 4,082,089 $ 4,082,089 $ 0 0.0% Display 1 November 2005

37 UNIVERSITY OF CALIFORNIA Research Expenditures by Fund Sources Total $3.073 Billion Federal Funds $1.751 Billion (57%) State General & Restricted Funds $460 Million (15%) Other Funds $862 Million (28%) Display 2 November 2005

38 UNIVERSITY OF CALIFORNIA $2,400 Federal Research Expenditures at the University of California through ($ in Millions) $1,800 $1,200 $600 $ Display 3 November 2005

39 UNIVERSITY OF CALIFORNIA Private Support for UC: Gifts, Private Grants and Pledges Paid ($ in Millions) $1,200 $1,000 $800 $600 $400 $200 $ Display 4 November 2005

40 UNIVERSITY OF CALIFORNIA State General Funds Support for the University of California ($ in Billions) $3.5 $3.0 $2.0 $1.0 $- Display November 2005

41 UNIVERSITY OF CALIFORNIA 7% UC's Share of State General Funds Percent 3.5% 0% Display 6 November 2005

42 UNIVERSITY OF CALIFORNIA 200% Underfunding per Student Compared to Inflation State and UC General Funds and Student Fees Percent Increase/Decrease 150% 100% 50% Higher Education Price Index State and UC General Funds, and Student Fees Adjusted for Enrollment Growth 0% Display 7 November 2005

43 UNIVERSITY OF CALIFORNIA Funding Components of the Average Cost of Education ( Dollars) $20,000 $17,500 $15,000 $2,070 $1,390 $2,340 $1,620 $4,280 $3,440 $1,670 $5,070 Funding Gap = $2,520 Cost of Education (in Dollars) $12,500 $10,000 $7,500 $5,000 $15,560 $14,530 $1,690 $11,230 $13,110 $1,970 $9,460 $2,500 $ State General Funds UC General Funds Student Fees Display 8 November 2005

44 UNIVERSITY OF CALIFORNIA Display 9 Priorities for Restoring Cuts Critical to UC Academic Quality Funding Needed to Close Shortfall Support to Close $2,500 Education Funding (in millions) Per Student Gap Restoring competitive salaries (General Fund and Student fee-funded portion) $280 Restoring unfunded price increases for non-salary budgets 40 Restoring the student-faculty ratio 60 Restoring funding for core academic support (instructional technology, instructional equipment replacement, building maintenance, and library resources) 100 Restoring student service reductions 20 Total Support Needed to Close Education Funding per Student Gap $500 Funds to Restore Research Cuts and Provide for New Research Initiatives Important to State s Economic Development $50 November 2005

45 UNIVERSITY OF CALIFORNIA Additional Resources under the New Compact State Funds Enrollment growth of 5,000 students per year and : 3% increase through : 4% increase and : additional 1% for instructional support (Libraries, IT, Equipment, and Maintenance) Capital Outlay: $345 Million per year UC General Funds 3% to 4% increases to cover inflation Student Fee Increases Undergraduate: 8% Graduate: 10% Professional: Multi-year plan Display 10 November 2005

46 UNIVERSITY OF CALIFORNIA Priorities Budget Long-Term Goals Student/Faculty Ratio Marginal cost funding + $10 million for partial restoration 17.6:1 Faculty and Staff Salaries & Benefits 4% for salary increases, benefits, and equity/parity Competitive salaries & total remuneration Graduate Students (Numbers and Quality) 45% return-to-aid plus new initiatives Restoration of research dollars. Make competitive offers. Instructional Support (Libraries, Instructional Tech., Equip. Building Maintenance) New marginal cost funding; fund maintenance of core I&R facilities Restoration and catch-up funding for instructional support Enrollment Funding for 5,000 additional students, including 1,000 graduate students Admit all qualified UG students per Master Plan and increase proportion of graduate and professional students Student Fees & Financial Aid Fee increases per Compact, Cal Grants, average 33% return-to-aid (30% UG, 45% grad acad --UG portion includes grants for middle-income needy students), exemption from nonresident tuition for students advanced to candidacy, 33% return-to-aid for professional school students Stable State funding, predictable fee increases, maintain access. Student Academic Preparation (Outreach) Obtain permanent funds in budget act Restore funding for most effective programs Display 11 November 2005

47 UNIVERSITY OF CALIFORNIA Priorities Budget Long-Term Goals Student/Faculty Ratio Marginal cost funding + $10 million for partial restoration 17.6:1 Faculty and Staff Salaries & Benefits 4% for salary increases, benefits, and equity/parity Competitive salaries & total remuneration Graduate Students (Numbers and Quality) 45% return-to-aid plus new initiatives Restoration of research dollars. Make competitive offers. Instructional Support (Libraries, Instructional Tech., Equip. Building Maintenance) New marginal cost funding; fund maintenance of core I&R facilities Restoration and catch-up funding for instructional support Enrollment Funding for 5,000 additional students, including 1,000 graduate students Admit all qualified UG students per Master Plan and increase proportion of graduate and professional students Student Fees & Financial Aid Fee increases per Compact, Cal Grants, average 33% return-to-aid (30% UG, 45% grad acad --UG portion includes grants for middle-income needy students), exemption from nonresident tuition for students advanced to candidacy, 33% return-to-aid for professional school students Stable State funding, predictable fee increases, maintain access. Student Academic Preparation (Outreach) Obtain permanent funds in budget act Restore funding for most effective programs Display 11 November 2005

48 UNIVERSITY OF CALIFORNIA Priorities Budget Long-Term Goals Student/Faculty Ratio Marginal cost funding + $10 million for partial restoration 17.6:1 Faculty and Staff Salaries & Benefits 4% for salary increases, benefits, and equity/parity Competitive salaries & total remuneration Graduate Students (Numbers and Quality) 45% return-to-aid plus new initiatives Restoration of research dollars. Make competitive offers. Instructional Support (Libraries, Instructional Tech., Equip. Building Maintenance) New marginal cost funding; fund maintenance of core I&R facilities Restoration and catch-up funding for instructional support Enrollment Funding for 5,000 additional students, including 1,000 graduate students Admit all qualified UG students per Master Plan and increase proportion of graduate and professional students Student Fees & Financial Aid Fee increases per Compact, Cal Grants, average 33% return-to-aid (30% UG, 45% grad acad --UG portion includes grants for middle-income needy students), exemption from nonresident tuition for students advanced to candidacy, 33% return-to-aid for professional school students Stable State funding, predictable fee increases, maintain access. Student Academic Preparation (Outreach) Obtain permanent funds in budget act Restore funding for most effective programs Display 11 November 2005

49 UNIVERSITY OF CALIFORNIA Priorities Budget Long-Term Goals Student/Faculty Ratio Marginal cost funding + $10 million for partial restoration 17.6:1 Faculty and Staff Salaries & Benefits 4% for salary increases, benefits, and equity/parity Competitive salaries & total remuneration Graduate Students (Numbers and Quality) 45% return-to-aid plus new initiatives Restoration of research dollars. Make competitive offers. Instructional Support (Libraries, Instructional Tech., Equip. Building Maintenance) New marginal cost funding; fund maintenance of core I&R facilities Restoration and catch-up funding for instructional support Enrollment Funding for 5,000 additional students, including 1,000 graduate students Admit all qualified UG students per Master Plan and increase proportion of graduate and professional students Student Fees & Financial Aid Fee increases per Compact, Cal Grants, average 33% return-to-aid (30% UG, 45% grad acad --UG portion includes grants for middle-income needy students), exemption from nonresident tuition for students advanced to candidacy, 33% return-to-aid for professional school students Stable State funding, predictable fee increases, maintain access. Student Academic Preparation (Outreach) Obtain permanent funds in budget act Restore funding for most effective programs Display 11 November 2005

50 UNIVERSITY OF CALIFORNIA Priorities Budget Long-Term Goals Student/Faculty Ratio Marginal cost funding + $10 million for partial restoration 17.6:1 Faculty and Staff Salaries & Benefits 4% for salary increases, benefits, and equity/parity Competitive salaries & total remuneration Graduate Students (Numbers and Quality) 45% return-to-aid plus new initiatives Restoration of research dollars. Make competitive offers. Instructional Support (Libraries, Instructional Tech., Equip. Building Maintenance) New marginal cost funding; fund maintenance of core I&R facilities Restoration and catch-up funding for instructional support Enrollment Funding for 5,000 additional students, including 1,000 graduate students Admit all qualified UG students per Master Plan and increase proportion of graduate and professional students Student Fees & Financial Aid Fee increases per Compact, Cal Grants, average 33% return-to-aid (30% UG, 45% grad acad --UG portion includes grants for middle-income needy students), exemption from nonresident tuition for students advanced to candidacy, 33% return-to-aid for professional school students Stable State funding, predictable fee increases, maintain access. Student Academic Preparation (Outreach) Display 11 Obtain permanent funds in budget act Restore funding for most effective programs November 2005

51 UNIVERSITY OF CALIFORNIA Priorities Budget Long-Term Goals Student/Faculty Ratio Marginal cost funding + $10 million for partial restoration 17.6:1 Faculty and Staff Salaries & Benefits 4% for salary increases, benefits, and equity/parity Competitive salaries & total remuneration Graduate Students (Numbers and Quality) 45% return-to-aid plus new initiatives Restoration of research dollars. Make competitive offers. Instructional Support (Libraries, Instructional Tech., Equip. Building Maintenance) New marginal cost funding; fund maintenance of core I&R facilities Restoration and catch-up funding for instructional support Enrollment Funding for 5,000 additional students, including 1,000 graduate students Admit all qualified UG students per Master Plan and increase proportion of graduate and professional students Student Fees & Financial Aid Fee increases per Compact, Cal Grants, average 33% return-to-aid (30% UG, 45% grad acad --UG portion includes grants for middle-income needy students), exemption from nonresident tuition for students advanced to candidacy, 33% return-to-aid for professional school students Stable State funding, predictable fee increases, maintain access. Student Academic Preparation (Outreach) Display 11 Obtain permanent funds in budget act Restore funding for most effective programs November 2005

52 UNIVERSITY OF CALIFORNIA Priorities Budget Long-Term Goals Student/Faculty Ratio Marginal cost funding + $10 million for partial restoration 17.6:1 Faculty and Staff Salaries & Benefits 4% for salary increases, benefits, and equity/parity Competitive salaries & total remuneration Graduate Students (Numbers and Quality) 45% return-to-aid plus new initiatives Restoration of research dollars. Make competitive offers. Instructional Support (Libraries, Instructional Tech., Equip. Building Maintenance) New marginal cost funding; fund maintenance of core I&R facilities Restoration and catch-up funding for instructional support Enrollment Funding for 5,000 additional students, including 1,000 graduate students Admit all qualified UG students per Master Plan and increase proportion of graduate and professional students Student Fees & Financial Aid Fee increases per Compact, Cal Grants, average 33% return-to-aid (30% UG, 45% grad acad --UG portion includes grants for middle-income needy students), exemption from nonresident tuition for students advanced to candidacy, 33% return-to-aid for professional school students Stable State funding, predictable fee increases, maintain access. Student Academic Preparation (Outreach) Display 11 Obtain permanent funds in budget act Restore funding for most effective programs November 2005

53 UNIVERSITY OF CALIFORNIA Priorities Budget Long-Term Goals Student/Faculty Ratio Marginal cost funding + $10 million for partial restoration 17.6:1 Faculty and Staff Salaries & Benefits 4% for salary increases, benefits, and equity/parity Competitive salaries & total remuneration Graduate Students (Numbers and Quality) 45% return-to-aid plus new initiatives Restoration of research dollars. Make competitive offers. Instructional Support (Libraries, Instructional Tech., Equip. Building Maintenance) New marginal cost funding; fund maintenance of core I&R facilities Restoration and catch-up funding for instructional support Enrollment Funding for 5,000 additional students, including 1,000 graduate students Admit all qualified UG students per Master Plan and increase proportion of graduate and professional students Student Fees & Financial Aid Fee increases per Compact, Cal Grants, average 33% return-to-aid (30% UG, 45% grad acad --UG portion includes grants for middle-income needy students), exemption from nonresident tuition for students advanced to candidacy, 33% return-to-aid for professional school students Stable State funding, predictable fee increases, maintain access. Student Academic Preparation (Outreach) Obtain permanent funds in budget act Restore funding for most effective programs Display 11 November 2005

54 UNIVERSITY OF CALIFORNIA University of California Budget Request ($ in millions) Operating Budget Estimated State General Funds (excluding one-time funds and lease revenue payments) $ 2,681.0 Estimated State and UC General Funds plus student fee income (excluding one-time funds and lease revenue payments) 4,639.9 PROPOSED INCREASES IN EXPENDITURES (Based on the Compact) Fixed Costs Compensation and benefit increases for faculty and staff for merit, COLA, continuation costs related to salary increases, employee benefits, and equity increases (equivalent to 4% of total salaries and benefits) Price increase for non-salary budgets (2.25%) 23.1 Workload and Program Growth Enrollment growth of 5,000 FTE students (includes $8.3 million related to introduction of maintenance of new space factor in revised marginal cost formula) State funds 47.5 Student fee funds (includes $10.4 million related to financial aid for new enrollment) 31.5 Financial aid related to fee increases (33% average total return-to-aid--30% for UG and % for graduate academic students) Graduate student support redirection of $10 million in savings from Strategic Sourcing Initiative -- Initiatives for , including remaining increment of State funds for the Science and Math Initiative and restoration of funding for labor and employment research 3.3 Student academic preparation programs (provide permanent instead of one-time funds) -- Professional school funding 9.4 Restoration of unallocated cuts related to previously proposed increase to the studentfaculty ratio) 10.0 Total Increase Under the Compact $ % increase in State and UC General Funds, and Student Fee Income 6.2% PROPOSED INCREASES IN INCOME State General Funds (3% increase to the base, excludes debt service for capital outlay) 80.4 State General Funds for enrollment growth (based on revised marginal cost rate) 47.5 Initiatives for , including remaining increment of State funds for the Science and Math Initiative and restoration of funding for labor and employment research 3.3 Revenue from an increase in mandatory systemwide student fees Revenue from an increase in professional school student fees 9.4 Increase in fee income related to increase in enrollment 31.5 UC General Funds income (including 5.0% increase in undergraduate nonresident tuition and reflecting decline in revenue related to new nonresident tuition exemption for nonresident graduate students advanced to candidacy) 7.0 Display 12 Total Increase in State and UC General Funds, and Student Fee Income $ November 2005

55 UNIVERSITY OF CALIFORNIA General Campus FTE Enrollment: Actual Enrollment, 1999 Plan, and Higher Education Compact Plan 250, ,000 Actual Enrollment Higher Education Compact Enrollment Plan 150,000 Projected 100, Enrollment Plan 50, Display 13 November 2005

56 UNIVERSITY OF CALIFORNIA Actual and Planned General Campus FTE Enrollment by Level 180, , , ,000 Undergraduate Enrollment 100,000 80,000 60,000 40,000 Graduate Enrollment 20, Display 14 November 2005

57 UNIVERSITY OF CALIFORNIA Graduation Rates by Cohort, Regularly Admitted Freshmen 90% 80% 70% Percent Graduating 60% 50% 40% 30% 20% Entering Cohort Four Years Five Years Six Years Display 15 November 2005

58 UNIVERSITY OF CALIFORNIA Budgeted General Campus Student-Faculty Ratio Regents' Goal 17.6 : State Cuts Display 16 November 2005

59 UNIVERSITY OF CALIFORNIA Faculty Salaries as % Market 115% 100% Estimated 85% Display 17 November 2005

60 10% UNIVERSITY OF CALIFORNIA % Increase/Decrease in State Funding for Staff Salaries 8% 6% Estimated 4% 2% 0% % -4% UC Staff Salary Increase Funding Market - Western Region Source: WorldatWork, Annual Salary Budget Survey Display 18 November 2005

61 UNIVERSITY OF CALIFORNIA $7,000 Resident Undergraduate Student Fee Levels Compared to Fees in Constant 1971 Dollars (Mandatory Systemwide Fees) $6,000 $5,000 Actual Fees $4,000 $3,000 $2,000 Constant Dollars $1,000 $ Display 19 November 2005

62 UNIVERSITY OF CALIFORNIA University of California and Public Salary Comparison Institutions Total Student Fees * Undergraduate Graduate Public Salary Comparison Institutions Fees Resident Nonresident Resident Nonresident University of Illinois $ 8,634 $ 22,720 $ 8,878 $ 21,718 University at Buffalo (SUNY) $ 6,068 $ 12,328 $ 9,427 $ 13,447 University of Virginia $ 7,370 $ 24,290 $ 9,800 $ 20,400 University of Michigan $ 9,213 $ 28,689 $ 14,271 $ 28, Average Fees of Comparison Institutions $ 7,821 $ 22,007 $ 10,594 $ 21, Average UC Fees $ 6,802 $ 24,622 $ 8,708 $ 23, Estimated Average Fees for Public Salary Comparison Institutions 8,212 23,107 11,124 22, Estimated Average UC Fees assuming increases in systemwide fees consistent with the Compact** $ 7,294 $ 26,020 $ 9,398 $ 24,383 * Includes mandatory systemwide fees and campus-based fees, and nonresident tuition for nonresident students ** Increases of 8% for undergraduate students and 10% for graduate students in systemwide fees; and 5% in nonresident tuition for undergraduates. Display 20 November 2005

63 UNIVERSITY OF CALIFORNIA Percentage of Undergraduates Who Receive Pell Grants, % University of California 30% 20% Selected Flagship Public Universities California Research Universities 10% 0% U of Wisconsin U of Virginia Michigan North Carolina Stanford Cal Tech USC UC Irvine UC San Diego UC Average UC Berkeley UCLA Display 21 November 2005

64 UNIVERSITY OF CALIFORNIA 50% Percent with Family Incomes of $60,000 - $99,999: UC First-Time Freshmen and All California Families (2002 Constant Dollars) 40% 30% 20% 10% 0% CA Families 23.7% 24.0% 22.6% 24.9% 24.1% 24.4% 24.7% 22.6% 23.8% 23.8% 23.2% 24.5% 24.4% UC Freshmen 27.3% 27.7% 26.5% 23.8% 24.9% 24.3% 23.9% 23.1% 23.1% 22.6% 22.1% 25.4% 26.1% Display 22 November 2005

65 UNIVERSITY OF CALIFORNIA Scholarships, Grants, and Fellowships by Fund Source, to ($ in Millions) UC Funds Student Fees and State General Funds $ $ $ $ Other University Funds Subtotal $ $ $ $ Other Funds Student Aid Commission $ $ $ $ Federal Private Agency Funds Total $ $ $ 1,036.4 $ 1,104.9 Note: Numbers for and are estimates; Student Fees and State General Funds are based on budgeted amounts. Display 23 November 2005

66 UNIVERSITY OF CALIFORNIA $1,200 Scholarships, Grants, and Fellowships by Fund Source, to ($ in Millions) Actual Estimated $1,000 Private $800 $600 Other UC Funds $400 UC Student Fees & General Funds $200 Federal Financial Aid California Student Aid Commission $ (est.) (est.) Display 24 November 2005

67 UNIVERSITY OF CALIFORNIA Estimated Average Net Cost for Undergraduate Needbased Aid Recipients at UC and Public Comparison Institutions, $20,000 $15,000 $10,000 $5,000 $0 UC Average Michigan Illinois SUNY Buffalo Virginia Total Cost $19,433 $19,967 $18,180 $14,812 $17,465 Gift Aid $8,425 $6,699 $5,043 $4,850 $8,237 Net Cost $11,008 $13,268 $13,137 $9,962 $9,228 Display 25 November 2005

68 UNIVERSITY OF CALIFORNIA UNIVERSITY OF CALIFORNIA FEES FOR SELECTED PROFESSIONAL SCHOOL STUDENTS Veterinary Business Theater, Public Public Int'l Rels. & University of California Medicine Dentistry Medicine Law Admin. Optometry Pharmacy Nursing Film & TV Health Policy Pac Studies Resident Fees Average of mandatory systemwide, campus-based, & professional fees (incl. supplemental prof. fee increases) $ 22,211 $ 24,515 $ 21,701 $24,149* $23,668* $ 17,675 $ 19,519 $ 11,556 $ 13,964 $ 12,503 $ 12,275 $ 12,612 Comparison Institution Fees Resident Fees Public Salary Comparison Institutions University of Michigan $ 22,433 $ 23,227 $ 32,919 $ 33,989 $ 15,737 $ 14,553 $ 14,387 $ 16,069 $ 15,991 $ 15,991 University of Virginia $ 28,700 $ 28,300 $ 32,300 $ 9,815 $ 9,810 $ 9,810 $ 9,810 University of Illinois (Urbana/Champ) $ 15,958 $ 17,488 $ 18,118 $ 9,364 $ 8,878 University of Illinois (Chicago) $ 26,230 $ 21,184 $ 14,570 $ 13,448 $ 10,134 University of Buffalo (SUNY) $ 21,356 $ 17,431 $ 14,741 $ 9,581 $ 15,011 $ 9,427 Additional Fee Comparison Institutions for Selected Programs University of Alabama $ 14,516 Cornell University (statutory college) $ 22,062 University of Maryland $ 15,677 Michigan State University $ 16,030 University of Minnesota $ 19,328 $ 12,586 $ 12,586 University of Missouri $ 17,302 Ohio State University $ 15,960 University of Wisconsin $ 15,936 University of Washington $ 8,507 $ 8,257 Public Comparison Institution Average Resident Fees for $ 24,680 $ 20,614 $ 17,863 $ 23,362 $ 23,497 $ 15,926 $ 15,106 $ 12,605 $ 10,747 $ 11,570 $ 11,816 $ 12,464 Private Salary Comparison Institutions, Harvard University $ 38,391 $ 37,906 $ 40,028 Massachusetts Institute of Technology $ 41,484 Stanford University $ 40,186 $ 37,192 $ 43,167 Yale University $ 39,150 $ 38,800 $ 38,315 * For law, total charges range from $23,525 at Davis to $24,581 at LA. For business, total charges range from $22,783 at San Diego to $26,039 at LA. These ranges reflect differences among campuses in professional school fee levels as well as differences in campus-based fees. Display 26 November 2005

69 UNIVERSITY OF CALIFORNIA State Funded Capital Budget ($ in Millions) $1,000 $750 $500 $250 $ (est.) Prior Gen. Obligation Bonds Lease Revenue Bonds/Other State Planned Bonds (2006 and future) Display 27 November 2005

70 UNIVERSITY OF CALIFORNIA Percent of CPEC Space Standards 120% 100% Actual If State Capital Funding in the Compact Is Provided 80% 60% If State Capital Funding in the Compact Is Not Provided 40% Projected 20% 0% Display 28 November 2005

71 UNIVERSITY OF CALIFORNIA BUDGET FOR STATE CAPITAL IMPROVEMENTS Campus Project Future Total Prefunded Budget Funding Requirements Project Cost ($000) ($000) ($000) ($000) Berk Seismic Safety Corrections P 1,055 WC 24,616 RB ,671 Giannini Hall C [2,498] X [2,498] Berk Birge Hall Infrastructure PWC 10,350 * ,350 Improvements Dav Veterinary Medicine 3B P 3,100 WC 62,400 65,500 CE [24,450] G [24,450] Dav King Hall Renovation and PWC 17,925 * ,925 Expansion PC [3,924] G [3,924] Irv Biological Sciences Unit 3 PWC 53,712 * E 3, ,980 PWCE [17,372]LB E [3,268] X [20,640] Irv Social and Behavioral PW 2,850 * C 37,582 * E 2,780 43,212 Sciences Building E [2,780] X [2,780] Irv Primary Electrical PWC 2,571 * ,571 Improvements Step 3 Irv Humanities Building PW 1,749 * CE 24,762 * 26,511 LA Life Sciences Replacement PWC 54,242 C 38,576 * ,818 Building PWCE [45,500] LB [45,500] Mer Social Sciences and PW 2,667 CE 39,164 41,831 Management Building Riv Student Academic Support PW 1,650 C 18,035 E ,572 Services Building Riv Geology Building Renovations PWC 9,025 * ,025 Phase 2 Riv Culver Center for the Arts P [500] G WC 8,065 8,065 C [4,300] G [4,800] Riv Boyce Hall and Webber Hall P 900 WC 30,100 31,000 Renovations Display 29 November 2005

72 UNIVERSITY OF CALIFORNIA Campus BUDGET FOR STATE CAPITAL IMPROVEMENTS Project Future Total Funding Project Prefunded Budget Requirements Cost ($000) ($000) ($000) ($000) SD Mayer Hall Addition and PWCE 29,100 C 13, ,226 Renovation SD Structural and Materials PWC 75,057 * E 3,000 78,057 Engineering Building E [4,000] X [4,000] SD Chilled Water and Electrical P [150] X WC 3, ,157 Distribution Improvements [150] SF Medical Sciences Building PWC 18,351 C 16, ,730 Improvements, Phase 2 SF Electrical Distribution P 525 WC 12,587 13,112 Improvements Phase 2 SB Electrical Infrastructure WC 7,305 * C 6,328 * ,633 Renewal, Phase 2 PW [782] X C [2,367] X [3,149] SB Arts Building Seismic PW 1,855 C 19,145 21,000 Correction and Renewal SB Davidson Library Addition P 1,250 WCE 58,350 59,600 and Renovation SB Phelps Hall Renovation PW 1,100 C 9,300 10,400 SB Infrastructure Renewal P 489 WC 9,511 10,000 Phase 1 P [251] X W [4,899] X [5,150] SC McHenry Addition and PWC 38,845 WC 6,821 CE 36,258 81,924 Renovation Project SC Digital Arts Facility PW 2,218 C 19,751 E 1,037 23,006 SC Infrastructure P 777 WC 7, ,610 Improvements Phase 1 SC Biomedical Sciences Facility PW 6,490 CE 67,710 74,200 SC Infrastructure P 367 WC 6,320 6,687 Improvements Phase 2 ANR Kearney REC Pressure PWC 998 * Irrigation System Display 29 (continued) TOTAL 339, ,311 P = Preliminary Plans G = Gift Funds W = Working Drawings LB = Long-Term UC Financing C = Construction RB = State Lease Revenue Bond Fund E = Equipment X = University Funds * "Streamlined" State processing during implementation. November 2005

73 Academic Quality, Institutional Competitiveness, and Student Access and Affordability UC Regents Meeting November 16, 2005 Senior Vice President Bruce B. Darling

74 Key Questions Is a University of California education accessible and affordable for students? Why have student fees increased at the University?

75 % of Graduates With Student Loan Debt & Average Debt at Graduation, $13,522 $14,157 $15,100 $16,418 $16,825 51% 31% 56% 60% 42% Virginia UC Illinois SUNY Buffalo Michigan

76 Manageability of Student Debt at Graduation, Did not borrow Debt within manageable range 4% 3% 24% 31% Debt below manageable range Debt above manageable range 1% 14% 22% <1% 7% 12% 35% 30% 29% 44% 63% 80% $0-$40,000 $40,000- $80,000 $80,000- $120,000 Parent Income $120,000+ Parent Income in 2002 Constant Dollars

77 Student Work Hours Per Week, Do Not Work 1-9 Hours Hours 21+ Hours 15.1% 17.6% 14.8% 13.0% 19.0% 28.2% 29.1% 26.2% 18.2% 18.7% 14.8% 14.9% 38.0% 38.5% 44.3% 49.8% $0-$40,000 $40,000- $80,000 Parent Income $80,000- $120,000 $120,000+ Parent Income in 2002 Constant Dollars

78 40% 30% 20% 10% 0% UC Continues to Lead in Enrolling Low-Income Students Pell Recipients, University of California Selected Flagship Public Universities California Research Universities Wisconsin U of Michigan North Carolina Stanford Cal Tech USC UC Irvine UC San Diego UC Average UC Berkeley UCLA U of Virginia

79 Despite Fee Increases, About Same % Freshmen from Middle-Income Families 40% 30% 20% 10% California Families UC Freshmen Percent with Family Incomes of $60,000 - $100,000: (2002 Constant Dollars) 0%

80 Average across all housing types: on/off campus & commuters Average In-State Cost for Needy Families After Grants/Scholarships, Total Cost $17,465 Total Cost $14,812 Total Cost $19,443 Total Cost $18,180 Total Cost $19,967 Net Cost $9,228 Net Cost $9,962 Net Cost $11,008 Net Cost $13,137 Net Cost $13,268 Virginia SUNY Buffalo UC Average Illinois Michigan

81 UC Total Cost of Attendance Still Well Below Privates $50,000 $40,000 $30,000 Room & Board, Books & Supplies, Personal, Transportation, Health Insurance $20,000 $10,000 $0 Room & Board, Books & Supplies, Personal, Transportation, Health Insurance Systemwide and Campus Fees University of California Tuition Average for Stanford, Cal Tech and USC

82 Students are Expected to Contribute by Working and Borrowing $25,000 Low-Income Middle-Income $20,000 Cost of Attendance $15,000 $10,000 $5,000 $9,500 $9,500 $9,500 $9,500 $9,500 $0 $20,000 $40,000 $60,000 $80,000 $100,000 Typical Students Student Loan/Work

83 Family Contribution Is Based Upon Ability to Help $25,000 Low-Income Middle-Income $20,000 Cost of Attendance $15,000 $10,000 $2,460 $5,730 $12,600 $12,600 $5,000 $9,500 $9,500 $9,500 $9,500 $9,500 $0 $20,000 $40,000 $60,000 $80,000 $100,000 Typical Students Student Loan/Work Parent Contribution

84 Grants Go to Those Who Need Them Most $25,000 Low-Income Middle-Income Cost of Attendance $20,000 $15,000 $10,000 $12,600 $10,140 $2,460 $6,870 $5,730 $12,600 $12,600 $5,000 $9,500 $9,500 $9,500 $9,500 $9,500 $0 $20,000 $40,000 $60,000 $80,000 $100,000 Typical Students Student Loan/Work Parent Contribution Grant Assistance

85 Federal Tax Credits Also Help Middle-Income Families $25,000 Cost of Attendance $20,000 $15,000 $10,000 $5,000 $12,600 $9,500 Low-Income $10,140 $2,460 $9,500 Middle-Income $1,230 $500 $6,870 $11,370 $12,100 $5,730 $9,500 $9,500 $9,500 $0 $20,000 $40,000 $60,000 $80,000 $100,000 Typical Students Student Loan/Work Parent Contribution Grant Assistance Federal Tax Credits

86 Some Middle-Income Students Also Receive Scholarships Cost of Attendance $25,000 $20,000 $15,000 $10,000 $12,600 One in five UC students receives $3,400 a scholarship averaging $3,400 Low-Income Middle-Income $1,230 $500 $6,870 $10,140 $11,370 $12,100 $5,730 $2,460 $3,400 $3,400 $3,400 $3,400 $5,000 $6,100 $6,100 $6,100 $6,100 $6,100 $0 $20,000 $40,000 $60,000 $80,000 $100,000 Typical Students Student Loan/Work Scholarships Parent Contribution Grant Assistance Federal Tax Credits

87 Key Questions Is a University of California education accessible and affordable for students? Why have student fees increased at the University?

88 Growth (Decline) in General Fund Spending Per Capita on California s 4 Largest Programs, (Constant Dollars) 175% 165% 150% 125% 100% 75% 50% 25% 0% -25% -9% 37% 31% Higher Ed K-12 HHS Prisons Source: Legislative Analyst s Office, 2004

89 Student Fee Increases Have Partially Offset State Budget Cuts $20,000 $17,500 $15,000 $2,070 $1,390 $2,340 $1,620 $4,280 $3,440 Funding Funding Gap Gap = = $2,520 $2,520 $1,670 $5,070 Cost of Instruction ( Dollars) $12,500 $10,000 $7,500 $5,000 $15,560 $14,530 $1,690 40% Decline in State Subsidy $11,230 $13,110 $1,970 $9,460 $2,500 $ State General Funds UC General Funds Student Fees

90 Public Universities Are Falling Further Behind the Privates Faculty salaries Student/faculty ratios Academic support Graduate student support

91 Accommodating Enrollment Growth Undergraduate Enrollment California Research Universities Growth (Decline) % Change Stanford 6,561 6, USC 14,904 16, % Cal Tech % UC 113, , , %

92 Academic Quality, Institutional Competitiveness, and Student Access and Affordability