As UC Berkeley’s budget deficit dwindles, the campus community can be cautiously optimistic

article image



We're an independent student-run newspaper, and need your support to maintain our coverage.

FEBRUARY 01, 2018

Over the course of the past three years, UC Berkeley has been involved in a concerted effort to address a significant budgetary deficit and provide the campus with a strong, stable and sustainable financial foundation for the future. Given the stakes involved, we are pleased to report that real progress has been made and that there is now cause for cautious optimism. We are currently on track to reduce the budget deficit from where it once stood at $149 million to $57 million by July 2018, and then eliminate it altogether by 2020.

Fortunately, much of this progress is the result of hard work by staff and faculty across the campus to increase revenues — a key part of a financial strategy that is helping us sustain our commitment to comprehensive excellence and remain true to our public mission. New professional and self-supporting degree programs have been developed by schools and colleges. At the same time, executive education, summer sessions and university extension programs continue to expand. These academic programs will contribute more than $18 million of new revenue to the campus.

In addition, our fiscal year-to-date figures show that we have already raised $272.4 million in philanthropic gifts and pledges, exceeding last year’s totals for the same time period by 6.7 percent. Notable gifts during this time period include a $10 million donation providing discretionary support to the libraries, School of Social Welfare, Haas School of Business and the Chancellor’s Impact Fund. On top of that, the campus also received two eight-figure gifts in January which will be dedicated to supporting faculty and serving underrepresented and undocumented students, at the request of the donors.

At the same time, we recognize that our financial progress has also been the result of difficult and often painful reductions. While great effort has been made to protect UC Berkeley’s academic core and the student experience, we are acutely aware of the budgetary and operational burdens that cost reductions have created across the campus as well as the impact they have had on students, staff and faculty. So, even as efforts continue to identify and invest in new opportunities for revenue generation, we will continue to keep close watch on how service reductions are affecting our core educational and research missions and will make necessary adjustments whenever possible. In that context, we are committed to communication and full transparency through information provided at the Office of the Chief Financial Officer’s regularly updated website and at this data-rich site known as “Our Berkeley.”

This fiscal year — 2017-18 — our goal is to reduce the deficit to $57 million. It is encouraging that $24 million of this reduction target is projected to be met through new revenue. Early philanthropy projections are also favorable.

Yet, even as our efforts are having the desired results, external forces outside our control add an unfortunate element of uncertainty to our financial future. Most pressingly, the governor’s proposed budget appropriation for the University of California is less than what was originally promised, reducing UC Berkeley’s anticipated share by up to $7 million. Due in part to this unexpected development, we made the decision to advocate for a 2.5 percent increase in tuition to make up for the shortfall, but the UC Board of Regents’ vote to increase tuition was delayed until May. All told, the impact of reduced state funding and a failure to implement a moderate increase in tuition results in a gap of approximately $30 million for our already stressed finances.

Despite our reluctance to increase tuition, we see little choice in the short term, given the funding decisions pending in Sacramento. Barring new tuition revenues coming from a moderate increase, students will have less access to professors, less ability to enroll in the classes they need and less potential to graduate in four years. We also want to emphasize a key point often lost in media coverage of tuition issues: Our low-income students — those receiving financial aid — will not be harmed from a tuition increase because their financial aid package will cover any increase in tuition. You can read more about the tuition raise here.

It is clear the time has come for the campus and our alumni to engage in a strong and sustained advocacy effort to urge our elected representatives to honor obligations previously made, acknowledge all that we have done to put our financial house in order and take the steps necessary to make the proposed tuition increase unnecessary. In order to maintain our excellence, ensure access to Californians regardless of their means and origins and advance discoveries that benefit our state and its economy, we must have the full support of our partners in the legislature. We will, in the near future, provide the campus with suggestions and tools that will help us collaborate and advance this effort.

We ask you — our entire campus community — for your continued patience and understanding as together we work to achieve our academic, financial and advocacy goals. Like you, we look forward to the time — just a few short years away — when we will have a balanced budget and the ability to expand our investments in areas that will benefit the campus and the public we serve.

Thank you for reading and for being part of the effort to ensure a bright future for Berkeley.

Contact Carol Christ at 


FEBRUARY 01, 2018