Chancellor's Report to Campus
from Budget Reduction Town Halls
July 2, 2009
Dear UC San Diego Campus Community:
The University of California faces a fiscal crisis that is unparalleled in its long history of exceptional service to the citizens of the state. Everywhere I go, faculty, staff, students, and our friends in the community relay their intense concern about maintaining the excellence of our University.
To contend with a predicted $800+ million shortfall to UC, President Mark Yudof proffered for UC system discussion three budget reduction scenarios. The plans range from an across-the-board salary cut to a combination of furloughs and salary reductions (Details of the reduction options may be found here). To hear your views, I scheduled five Town Hall meetings on the General Campus, at Scripps Institution of Oceanography, and at Thornton and Hillcrest Medical Centers. I’m pleased to provide this summary and will provide this range of viewpoints to President Yudof as he prepares a proposal for UC Regents action later this month.
I want to thank you for your dedication to the University and to your colleagues and our students. Your loyalty and commitment are clear: over 2,300 people attended the Town Halls and nearly 1,700 emailed comments. Many offered alternate budget reduction proposals. The comments and conversations resounded with deep concern about the impact of these significant budget cuts on our teaching, research, service and patient care mission.
Themes from the Town Halls and Comments
As I read the emails and listened to your comments at the Town Halls, a number of themes emerged:
“One-Size-Fits-All” Proposals: The University of California is a complex organization that derives its funding from a large variety of sources. With only 12% of the budget at UC San Diego from the State of California, our faculty and staff have relied on an entrepreneurial spirit, intelligence and creativity to aggressively seek extramural funding. With such a diversity of funding sources, many email writers and Town Hall participants objected to what appears to be one-size-fits-all scenarios. As one researcher noted, “A one-size-fits-all solution leaves us all poorly dressed!”
Furloughs Over Straight Pay Reduction: An across-the-board salary reduction of 8% for those with salaries about $46,000 and 4% for those below $46,000 proved unpopular with nearly everyone. The majority of people said that if they must have their salaries reduced, they prefer the furlough option. As one staff member stated: “If I am going to get less money, I would rather spend more time with my family.”
Staff argued for the opportunity for personal savings in the event of a furlough. In addition to the option they may have to earn additional income on the furlough days, Town Hall attendees and email writers noted that with a furlough, they would save child care and gasoline costs.
Prospect of Unpaid Holidays: The furlough options included various numbers of unpaid holidays, in addition to furlough days. Most emails writers rejected the proposals, citing their interest in the ability to spend additional time with family or to seek outside income.
Preservation of Retirement Benefits: Hand in hand with the message about the desire to receive time for a reduction in salary, the emails and Town Hall speakers encouraged the President to seek Regental action to preserve employees’ base salary and service toward the calculation of retirement benefits. The comments of individuals who had provided years of dedicated service and were near retirement were particularly poignant. Reductions in salary now will mean a lifetime reduction in benefits, they said.
Faculty and Staff Paid on Grants: Perhaps no single issue generated greater consternation — and alternate proposals — than the issue of salary reductions for individuals on research grants. In putting forward the proposal that all faculty and staff regardless of funding source must share in salary reductions, President Yudof had cited the need for equity among employees. In response, faculty and staff on research grants noted that reductions in salaries paid by grants will return to the granting agency and will not be available to alleviate UC’s budget shortfall. And, they added, those reductions could lead to decreased revenue in indirect cost recovery (overhead) to the University. Those on research grants overwhelmingly objected to the salary reduction proposals.
Often, faculty and staff stated their understanding of the goal to treat all employees equitably, but they provided data that illustrated how an 8% reduction would affect both their grant and the University’s overhead revenue. A neuroscience faculty member wrote, “Our research program is funded entirely by external grants. If we reduce salaries by 8%, UC will potentially lose associated indirect (overhead) costs totaling $116,000.”
Senior Vice Chancellor Paul Drake and I have relayed these issues to the Office of the President. We have recommended that if UC moves ahead with a furlough for all employees, the University should investigate the option to allow faculty to “buy back” the furlough time from their grant. In his message to the campus earlier this week, President Yudof acknowledged this important issue and has stated that he is taking facts about faculty and staff on research grants into consideration.
I am grateful to the creativity of our faculty and staff who have proposed alternatives regarding those who are paid on research grants. Please be assured that your messages about the effect of a salary reduction for those on research grants have been received and have been communicated to the Office of the President.
A Sliding Scale for Salary Reductions: At the staff Town Hall at the Price Center, an overflow crowd of more than 1,000 resoundingly called for additional tiers upon which to base the salary reductions. Many staff expressed the view that those who earn higher salaries were better able to absorb salary reductions. Only one cutoff (at the $46,000 mark) was not adequate, they said.
A staff member in Auxiliary and Plant Services asked, “Many of us have spouses who are out of work and deep cuts will force our families into deep hardships. My concern is that there are not more than two tiers in which to decrease salaries. Why not more tiers to spread that pain and hardship?” From the Medical Center I’ve heard, “An 8% pay cut would be way too harsh, and would impact us tremendously. I am currently a single homeowner and am working very hard not to lose my home.”
I’ve received many emails with suggested cut-off points and various percentage reductions. Once again, this message is one that President Yudof has heard from both UC San Diego and our sister UC campuses.
Flexibility and Decision Making on the Campus: Throughout the discussions the Senior Vice Chancellor and I have had with the Office of the President we have stressed the importance of flexibility for the campus leadership.
In the Medical Centers, flexibility in handling budget reductions is vital to our ensuring that Thornton and Hillcrest have the mandatory staffing levels required for patient care. Vice Chancellor David Brenner, as well as Medical Center CEO Rich Liekweg, have communicated this critical need. Greater flexibility will help them to avoid a disruption in health care operation and retain excellent faculty and staff. One clinical professor wrote, “Cutting salaries to medical school faculty and staff will harm the patient care, teaching and research missions of the University of California.” And a staff member added, “I believe we risk losing excellent staff and faculty, gaining a tarnished reputation and compromising the welfare of our patients.”
Our Academic Senate has underscored the desire for flexibility, noting the need in a resolution passed at an emergency meeting of the Senate Council earlier this week.
Efficiencies Across the Campus: Many of you have included ideas on how we can streamline and improve efficiency. I want to thank you for those ideas. Over the course of the next several months, all units on the campus will be continuing to seek efficiencies to help reduce costs.
Additional Comments from Our Campus Community
I’ve paraphrased and quoted emails you have sent to me. In addition, you may read excerpts that are posted on our Budget Line Web site at budgetline.ucsd.edu. I welcome your input, suggestions and ideas. You can email me at chancellor@ucsd.edu or make suggestions through the Budget Line homepage.
Thank you for your feedback, patience and hard work as we weather one of the worst financial crises in the history of our University. I also thank you for being a part of this stellar University. UC San Diego is a world-class because of you — our extraordinary faculty, staff and students.
Marye Anne Fox
Chancellor
