Carol Christ teases budget, plans to halve $110M deficit

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Jihoon Park/File

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Incoming Chancellor Carol Christ has completed her budget decisions for the fiscal year 2017-18 — decisions that must cut the campus’s $110 million budget deficit by nearly half.

The UC Office of the President stipulated for campus to reduce the deficit by about $53 million for this fiscal year, bringing the deficit to $57 million, according to a statement by Christ released Tuesday.

The deficit is projected to be completely eliminated by 2020. To meet such extensive reductions, Christ has emphasized a campuswide investment in “revenue generating activities.”

Revenue was originally targeted to meet half of all required deficit reductions. “Revenue generating activities” have since exceeded the deficit reduction target by 2 percent.

This is the good news,” Christ said in the statement. “We will continue to seek ways to increase revenues to offset the need to make cuts.”

Christ added, however, that the cuts “are nonetheless painful.”

To the extent that divisions do not meet targets, workforce decisions — attrition and layoffs — will be made by divisional leadership.

The main sources of increased revenue are UC Berkeley Extension, Summer Sessions, self-supporting degree programs and philanthropy, Christ said in a sit-down with The Daily Californian. In addition, there has been a renewed effort to monetize campus-owned real estate, increase entrepreneurial activity and produce contracts and grants.

In completing the budget, Christ first sent divisions — including schools, colleges and administrative units — letters announcing the expense cuts. A frequently asked questions page regarding the budget process has been posted on the campus website. Official budget expenses will be posted on a presently undisclosed date.

All scholarships and fellowships, programs funded with student fees and all instructional salaries and utilities were excluded from the cuts, according to the statement. Student Health Insurance Program and the sexual harassment prevention program were also excluded.

Division cut targets were not made straight across the board; instead, the targets are “highly differentiated,” Christ said.

Instructional divisions are charged with cutting about 1 percent of cost, though many instructional divisions will meet targets entirely through revenue activities, according to Christ. In the past fiscal year, the number of full-time equivalent employees has dropped by about 450.

Administrative, research and service-division cut targets are between 4 and 5 percent.

The budget is part of a larger five-year plan. Reduction targets for fiscal year 2016-17 were $40 million, which was primarily achieved through cost reductions, not revenue increases.

Assumed in the budget is a 2.5 percent growth of in-state tuition each year and a total growth of nonresident supplemental tuition by 5 percent — while maintaining the nonresident enrollment cap at 24 percent.

State support is projected to increase by 4 percent up until fiscal year 2018-19, dropping down to a 3 to 3.5 percent increase thereafter.

“By June 30, 2020, we have to have eliminated our deficit and we will — we’re on course for it,” Christ said to the Daily Cal. “I have absolutely no question that we’ll be able to get there.”

Audrey McNamara is the executive news editor. Contact her at [email protected] and follow her on Twitter at @McNamaraAud.

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  • California Defender

    Christ has emphasized a campuswide investment in “revenue generating activities.”

    Sounds like Berkeley is moving towards becoming a private university.

    Sounds good to us.

    -Taxpayers of California

  • Anonymous

    Summer Sessions (for which the students pay extra) should not be a profit center. Some departments are shifting courses to SS, cutting courses in the regular semester, thus “requiring” students take an SS course. Profit off the backs of students! The devil is in the details, folks. Somebody needs to drill down on this budget to see who is really going to pay. I was a victim the last time they did this nonsense. The staff didn’t get raises for 3 years to pay of the debt for IT infrastructure (the excuse that time “oh we overspent and didn’t notice until it was too late” HAH!

    • California Defender

      How are you a victim? Are you Californian? If so, taxpayers already pay for 64.8% of your tuition. The average student at Berkeley gets a whopping $22,914 a year in public money.

      And those figures are just for tuition. That obviously doesn’t include the full operational cost of Berkeley which taxpayers also cover.

      Student contributions need to be increased dramatically at Berkeley and at all CA universities. They have been too low for too long and this crippling budget deficit is the direct result.

  • Several UC Berkeley economics professors who support “income inequality” research each earn more than $300,000 a year – Marc Joffe, a policy analyst / California Policy Center. Professor Robert Reich – former secretary of labor under Bill Clinton’s administration who in 2013 helped produce the film “Inequality for All” – earned $263,592 in 2014.

    • Kurt VanderKoi

      California pays its governor $177,467. Professors at public universities should not be paid more than the governor!

  • Kurt VanderKoi

    The UC Berkeley education model is OBSOLETE (and costly). Students are required to live in the VERY EXPENSIVE area around Berkeley and physically attend class in large OBSOLETE (and costly to maintain) lecture halls. The MODERN Distance Learning education model does not require your physical presence or large lecture halls.
    See: ASU Online http://asuonline.asu.edu/

    • California Defender

      Many liberal arts courses can easily be taught in an online setting, but not sciences, medicine, engineering, and other hands-on technical courses.

      But you’re right, the days of sitting in a large lecture hall with 500 students taking literature, philosophy, or the nauseating buffet of *fill in the blank* studies classes, are coming to an end.

  • Killer Marmot

    In the year 2000, there were more than double the number of faculty as administrators. Today there are roughly the same number of faculty as administrators.

    I suggest that cutting back on bureaucracy and administrative programs would be a good place to start.

  • jim hoch

    “revenue generating activities.” Casinos, cannabis dispensaries?