SAN FRANCISCO — A committee of the UC Board of Regents approved the university’s almost $27 billion budget for the 2015-16 academic year during its meeting at UCSF on Wednesday.
The budget, which includes a $459 million increase in proposed revenue and expenditures, incorporates additional funds from the state government and a proposed fee increase. The plan proposes that the university spend about one-fourth of those funds on mandatory cost increases, with the rest invested in academic quality, enrollment growth and high-priority costs such as deferred maintenance.
The proposal approved by the committee on finance will be officially passed in a vote by all members of the board Thursday. Traditionally, this vote is a formality.
The plan contains a 4 percent increase in state funding, totaling about $120 million. Per the governor’s funding plan, the state plans to increase funding by 4 percent in each of the next two academic years.
These increases, however, are contingent on a freeze in university tuition and fees, which has been in effect for the last three academic years. The 2015-16 budget incorporates a 5 percent fee hike amounting to almost $100 million. The increase can be avoided if the state provides additional funding.
Funds from tuition and fees have made up a greater percentage of the university’s revenue than state funds since the 2011-12 academic year. The budget notes that the average per-student funding from the state has decreased by almost 25 percent over the last 10 years.
Patrick Lenz, vice president of budget and capital resources, and Lt. Gov. Gavin Newsom discussed at the meeting whether the university, by raising tuition, was breaking a promise to the state. Lenz said the university had never promised it wouldn’t raise tuition, but Newsom disagreed.
“(The promise was) reinforced ad nauseum in the media, in Legislative Analyst Office reports and other institutions,” Newsom said.
The budget states that this increase is not enough to cover cost increases due to inflation, leading to the increase in systemwide fees. The total increase in revenue and expenditures amounts to less than 2 percent of the $26.9 billion budget.The 4 percent state funding increase represents an increase of 1.7 percent in the university’s core funds — the money used for faculty pay and campus buildings, as opposed to expenditures for the university’s hospitals, for example.
The budget also proposes enrolling 2,000 more nonresident students, which, along with a 5 percent increase in supplemental tuition for nonresidents, would bring in an additional $50 million.
Lenz emphasized his priority on California residents but stated that enrollment of out-of-state students could be increased to generate revenue.
“If this budget does not come to fruition, that certainly is one of your revenue options,” he said.
About $125 million of the increase in expenditures is deemed mandatory, incorporating increases in retirement contributions and expenses related to employee health benefits. The faculty merit program — through which faculty are generally eligible for a pay raise every three years — represents $32 million of this increase.
Faculty and staff will receive a salary increase of 3 percent under the budget plan, at a cost of about $110 million. A compensation study commissioned by the university and conducted by a consultancy firm found that UC faculty salaries currently lag behind the market by 12 percent.
The plan includes $60 million for “academic quality” — improving the faculty-student ratio and addressing faculty salary gaps, for example — and $22 million to support 5,000 more California resident students.
Christopher Kan, the student observer on the finance committee, said if the state will not provide additional funding, the budget should be balanced by freezing enrollment, not by increasing tuition.
“The budget tries to distract from the effects tuition increases will have,” he said. “It does offer predictability for UC families — a predictably horrible future.”
A total of about $70 million is allocated to deferred maintenance and capital improvements addressing seismic safety and modernization, among other items.
Regent Frederick Ruiz, chair of the finance committee, was critical of what he called the state’s lack of support for the university.
“The UC cannot maintain and enhance quality and public service without state support,” he said.