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December 19, 2003
To: Deans, Vice Chancellors, University Librarian
From: Martin M. Chemers, Interim Campus Provost and Executive Vice Chancellor
Re: State Budget Update
Dear Colleagues:
I am writing to provide you with information about the actions Governor Schwarzenegger and the legislature are taking to address the state’s budget crisis.
They reached agreement to seek voter approval in March for Propositions 57 and 58 to borrow a $15 billion bond to pay the current year deficit, place a cap on future spending, and build a reserve. It appears that Proposition 55, the $12 billion bond measure for education facilities, will also be on the March 2004 ballot. All of these measures are important to the University.
Governor Schwarzenegger has proposed a series of mid-year budget reductions totaling $2 billion. Among the proposed reductions are:
- Allocating a $15.7 million undesignated cut for the UC in the current year, growing to a permanent reduction of $47.2 million in 2004-05;
- Eliminating state funds for the University's outreach programs. This translates into a $12.2 million mid-year cut and a $33.3 million reduction in 2004-05.
- Reducing $2 million in current year funding for UC labor institutes, growing to $4 million in 2004-05.
When the governor originally proposed the mid-year cuts it was assumed that they would not be enacted until they received legislative approval. We have since learned that the Governor exercised his executive authority yesterday to order the implementation of $150 million in mid-year state budget cuts in order to preserve scheduled payments to local governments in California. The mid-year cuts include $29.9 million in cuts at the University of California.
A press release issued by the UC Office of the President indicates: "While state funding to the affected areas apparently will stop flowing immediately, UC officials emphasized that programs and jobs in the affected areas will not come to an immediate end. The University will continue operations at current levels for the time being and will not make decisions in response to the governor's announcement until after the governor's full state budget proposal for the 2004-05 fiscal year is issued in January."
In addition, Governor Schwarzenegger issued several executive orders designed to restrict spending in the current year. These executive orders continue to impose a hiring freeze and to limit the commitment of further expenditures through contracts. Consistent with the terms of the executive orders, President Dynes has committed the University to complying with the intent of these executive orders to a level that will not interfere with meeting our educational mission. Attached is a copy of President Dynes' letter to the Chancellors, along with the executive orders, asking that campuses exercise caution and discretion with respect to exceptions.
I would like to thank everyone for their continued hard work and particularly those who have participated in the Executive Budget Committee planning and initiative process. This is a time of unprecedented budget uncertainties for all of us. I am confident that the EBC process will help to provide us with effective solutions in the long term.
I will keep you posted as new information becomes available.
Sincerely,
Martin M. Chemers
Interim Campus Provost and Executive Vice Chancellor
Attachments (and this letter, in PDF format)
cc: Chancellor Greenwood, Academic Senate Chair Galloway
Maintained by:pioweb@ucsc.edu