Tuition hike delay, reduced state funding leave UC Berkeley’s financial future ‘uncertain’

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In the early hours of Friday morning, Chancellor Carol Christ released a CALmessage to the campus community detailing the campus’s financial progresses and woes.

The message, co-authored by Executive Vice Chancellor and Provost Paul Alivisatos, revealed an update on the campus’s efforts to create a “strong, stable and sustainable financial foundation.”

The CALmessage was peppered with optimism, relaying the fact that the campus is on track to cut its budget deficit nearly in half by July 2018 and eliminate the deficit altogether by 2020. It pointed to fundraising efforts and new professional and self-supporting degree programs as two of the ways the campus was able to increase revenue.

Campus administrators have been attempting to increase transparency regarding key issues such as the budget, as evidenced by the CALmessage and a talk Jan. 26 with campus Vice Chancellor and Chief Financial Officer Rosemarie Rae — part of a new series of talks with campus administrators.

Rae’s talk and Christ and Alivisatos’ CALmessage both echo many of the same sentiments: concern with Gov. Jerry Brown’s proposed budget appropriation for the UC system, which will leave UC Berkeley with $7 million less than it was anticipating, and unease about the postponement of the UC Board of Regents vote on tuition hikes last week — both of which affect the campus’s financial planning.

“All told, the impact of reduced state funding and a failure to implement a moderate increase in tuition would result in a gap in our already-stressed finances in the range of $30 million,” read the CALmessage.

In total, state funding is about $375 million or 14 percent of the campus budget, while $700 million comes from tuition and fees. $225 million of that $700 million is from out-of-state tuition.

The campus has been operating with a structural deficit for about a decade. After former chancellor Nicholas Dirks announced an annual $150 million deficit in February 2016, staff and faculty voiced discontent with having been kept in the dark about the severity of the deficit and plans to reduce costs.

The campus exceeded its cost-cutting target of a $110 million deficit for the 2016-17 year, reducing the deficit to about $77 million.

The CALmessage concluded with a plea for patience as continued budgeting work unfolds.

“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 public we serve,” the message read.

Ani Vahradyan is the university news editor. Contact her at [email protected] and follow her on Twitter at @anivahrad.