On Friday, May 7, 2010 there was a UC Berkeley staff forum on the University budget organized by the Berkeley Staff Assembly.
Most of the 50 or so campus staff members in the audience were middle aged white women which seems homogeneous but may actually be a fairly representative sampling of the mid-level career staff who populate campus offices.
There were three presenters. The first, Kieran Flaherty is the campus director of State Governmental Relations. He was standing in for Chris Treadway who was on the agenda but couldn’t attend.
During his presentation he noted:
Term limits are a factor with “a lot of jockeying” for office among legislators.
The threshold of requiring two-thirds legislative approval for the budget is something that exists only in California, Rhode Island, and Arkansas state government.
The University has “an ever shrinking small part” of state funding. Good news for the 2010-2011 UC budget is that the Governor proposed increasing the UC allocation by $370 million dollars over this year when there were $305 million dollars in cuts to State funding to UC.
However the UC share of the State budget has fallen from about 5-6% in the 1980-81 fiscal year to about 4% in 2008-09. “This has more or less steadily declined.”
Since 1990, Flaherty said, State funding per UC student has fallen by 54% a situation he called “ridiculous”. While the decline of higher education funding by the State continues the share of the budget that goes to prisons has increased. From 1967 to 2010 higher education funding fell from 13.4% to 5.9% of the State budget while the share for prisons rose from 4% to 9.7%.
The University budget process begins formally in November when The Regents start budget work but then is heavily influenced in January when the Governor makes a budget proposal to the Legislature including his recommendations on UC funding.
The next important step is the “May revise” in which the Governor, in mid-May, releases an updated projection of state revenues and budget recommendations. The budget is supposed to be approved by June 15 but adoption usually lags months behind.
(Update. May 14 the Governor produced discouraging budget numbers that downgraded revenues, but protected UC and California State University funding in his revised budget proposal).
Flaherty noted that just as the crucial period for State budget negotiations begin in May and June the University is always “losing a mass of active advocates to the rest of their lives” as students graduate or go off on vacation and faculty leave the campus for the summer.
Flaherty said that “being technically a state agency for purposes of the budget process we are prohibited from doing a lot of the advocacy that is effective” like making campaign contributions to legislators.
However there is an organization “UC for California” which is housed on the California Alumni Association website in part because “they have a little more leeway to engage in advocacy than the rest of us.”
“We need to convince them (the State government) that UC is a good investment. We need to convince them that UC educates people that provide revenue so they don’t have to make the difficult decisions” about budget cuts in future years.
He concluded that the University’s Office of General Counsel has advised that “you can go on your work computer to receive an e-mail / action alert on the budget” and also forward it on, although UC employees “can’t be campaigning for votes from work, you can’t be fundraising” for candidates or campaigns from work.
At one point in his presentation Flaherty projected a slide that recited the State Constitutional requirement that “the University shall be entirely independent of all political and sectarian influence.” After reading it out loud he said, “That’s a laugh line.”
The second speaker was Claire Holmes the Assistant Vice Chancellor for Public Affairs and a relative newcomer to the campus. “Thank you to all of you” she led off. “You do a lot of hard work for the University.”
Holmes gave a brief overview of the campus public relations activities including media coverage. She said “This is a very critical time for us. We’re really trying to make the case in the pubic arena on why this place is worthy of investment.”
She played a video clip combining news excerpts from the past year about the campus including Professor Oliver Williamson winning the 21st Nobel Prize for a Berkeley faculty member.
“We do enjoy very favorable media results”, Holmes said. “We’re in the New York Times 25-30 times a month”. When her office looked at a year of San Francisco Chronicle coverage, she said, they found an average of about one item a day about the Berkeley campus, of which only about 80 were characterized by her as “negative stories.”
However, she added, “the media is in a huge transition. There is no viable business model for on-line web communications” but that’s where people are now going to get much of their news while newspaper circulation and revenue declines and journalists are laid off.
“There are so few higher education reporters left in the country” and “mostly we now find ourselves in a ‘generalist’ category” of journalism. So reporters who contact the campus to do stories are not necessarily experienced in writing about higher education or familiar with Berkeley because of past writing.
“We are also working in social media spaces,” Holmes said, noting the BerkeleyBlog where leading faculty comment on contemporary issues.
She said, “Journalism is now becoming a conversation.” The campus has launched a speakers bureau and, Holmes said, “last year we placed 200 op eds” (opinion pieces) in publications. Campus leaders also meet frequently with the editorial boards of publications.
She mentioned last fall’s campus budget protests as a generator of bad coverage for the campus but said that feared effects had not come to pass. “(student) applications are not down, faculty aren’t quitting, staff are not leaving in droves…”
Holmes urged staff to engage in advocacy on behalf of the University and echoed Flaherty that “one of the most powerful ways to reach a legislator is through direct contact.”
A staff member in the audience asked about media reaction to “Operation Excellence” the campus budget cutting initiative. “The story in the Chronicle was OK”, Holmes said, except for a headline. “We had a positive story in the Contra Costa Times.” “From a media perspective and an image perspective I think it’s gone OK.”
She said, “we’ve gotten probably 100 responses to the final (consultant) report. Probably 60 of them were focused on childcare”, referring to the consultant suggestion that childcare services could be outsourced rather than operated by campus employees.
The third and final speaker was Erin Gore the Associate Vice Chancellor for Budget and Resource Planning. Like Holmes she said she is a relative newcomer to the campus but she seemed very familiar with the budget.
She outlined the basics of the UC budget explaining that revenue comes from eight primary sources including direct state allocations, tuition and fees, federal government grants, private gifts, auxiliary enterprises, sales of goods and services, and local government funds.
The Berkeley campus operates with a budget of about 1.8 billion dollars a year. Of that, direct state funding provides about 500 million or about 28%.
Last year with cuts in the State allocation the campus had an initial budget shortfall of about $209 million. That was met with about $92 million in Federal stimulus funding, a $24 million fee increase on students, and a series of cuts including $67 million in permanent budget cuts, campus employee work furloughs that temporarily cut salaries to yield about $31 million, and about $17 million in temporary cuts.
The budget breaks down into:
o About 37% “restricted” funding (such as Federal grants for specific programs)
o About 36% “unrestricted designated” funds
o About 27% “unrestricted general” funds.
Of the latter, representing about $483 million, $410 million comes from the State and in the 2009-2010 fiscal year about $128 million had to be cut. That was the core of the budget crisis in the past year.
Good news for the coming year, Gore said, is that “The Governor put us at the top of the heap” in funding priority in January and the University “had a strong statement from him two weeks ago” reaffirming support. However, “he said he would give us more but he didn’t say how much.”
While growth in research grants and contracts is “good” and “our research is growing exponentially” Gore noted that the financial picture in that area is not completely positive since the campus believes that the overhead costs for research grants—the money that goes to the University to pay for things like buildings and other services—are higher than the standard reimbursement rate.
For every research dollar grant received, the University gets to use about 53.5 cents for expenses, like buildings, supporting the research activities but the University’s actual costs are greater, Gore said.
She added that the campus budget is “very decentralized” with many decision makers at different levels and departments.
In answering a question Gore said one of the biggest challenges for the coming year is meeting pension obligations. The University is projecting a need to increase retiree pension contributions not only from employees but also from University funds. The amount that both employee and University pension fund contributions will have to be increased isn’t exactly decided.
It’s the “80 million pound gorilla that is out there” she said. “In terms of things I worry about for the overall budget model that’s at the top of my list.”
The key message she said is that the University needs direct State of California contributions to the pension system.
Other questions addressed the campus program of work furloughs for employees now in effect. The program temporarily cut salary and work hours for many UC employees.
Will they continue, Gore was asked? “We’re estimating no”, she said. UC President Yudoff has said they won’t continue. But “that’s clearly one of the things we won’t know for sure” until the 2010-11 budget is settled.
Another question was whether the START program would be continued. It allows employees to temporarily take a voluntarily reduction in work hours and salary while keeping their full-time vacation and sick leave and retirement service credit accruals.
While Gore said there is “nothing definitive” she added, “it would be a very useful tool” to renew the START program.
Norris Lincoln is the pseudonym of a UC staff member who is not active in the Berkeley Staff Assembly that organized the forum.