Regents to discuss financial future of university in upcoming meeting

Following its July meeting, fueled by the emotion and drama of a 9.6 percent systemwide fee increase, the UC Board of Regents will meet again this week to address the long-term financial future of the university.

The board, which will meet for three consecutive days starting Tuesday at UC San Francisco’s Mission Bay campus, faces the issues of long-term financial stability, uncompetitive compensation for campus chancellors and financial support for students in the university’s graduate program.

Read Daily Cal reporters’ annotations on meeting agenda items.

The board’s Committee on Finance will take the lead in discussing the university’s financial future and finding solutions to the effects of decreasing state funding.

Although the university cut costs through administrative efficiency programs such as Working Smarter — a strategy launched by the university in July 2010 to save money without fee increases — the board will have to address a $1.5 billion budget gap caused by a variety of factors, including decreasing state funding for higher education, according to a meeting agenda item.

One solution discussed will include a multi-year budget plan for the university, which would schedule fee increases every year. Under the “optimal scenario” in a multi-year funding plan, state funds and tuition fees would each increase by 8 percent annually to support the basic operating budget of the university, according to the agenda item.

The board will also be presented with cost-saving options, such as letting graduate education “erode.” But efforts to reduce costs in such a way would “destroy UC’s historic commitment to quality,” according to the agenda item.

In light of this “historic commitment,” the Committee on Educational Policy will discuss the issue of graduate student support. Because graduate students are a vital part of the university’s excellence, from both an educational and research standpoint, the board will be forced to address evidence that fewer prospective graduate students are making UC graduate programs their top choice.

Of graduate students who were admitted to at least one non-UC institution in 2010, 48 percent indicated that they would attend UC, which was down from 52 percent in 2007, according to a survey published by the Office of the President.

Board members will also be confronted with evidence of lagging financial support to graduate students from the university when compared to competing universities. In 2010, the per capita net stipend for UC graduate students was $2,697 less than that of non-UC net stipends, according to the survey.

The survey also says the university is seen “somewhat negatively” by prospective graduate students for its financial offers and high cost of living.

In light of these problems, the board will address whether graduate student educational fees should increase along with undergraduate increases. They will also discuss whether reducing funding for other programs could potentially support shortfalls in the university’s graduate programs.

The board will also discuss compensation for campus chancellors, which is significantly below market, according to an August report on 2010 employee pay.

Cash compensation for senior management group members, which includes chancellors, was 22 percent below market, while total compensation, which includes non-cash items such as health, pension and retirement benefits, was 14 percent below their counterparts at comparable institutions.

Damian Ortellado covers higher education.