1. University of California Budget Overview Librarians Association of the University of California May 13, 2004 Trudis Heinecke Director, Long Range Resource Planning Office of the President

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3. 3 This display shows how UC’s budget as a share of the State’s General Fund has changed over time. UC’s share of State General Funds declined dramatically after Proposition 13 in 1978-79, regained some ground in the 1980s, but began a steady decline with the cuts of the early 1990s. That decline was moderated with the first compact under Governor Wilson in 1995-96. A two-year upturn occurred reflecting the recent surplus at the State level, but the slope has once again continued a steady decline to its lowest point yet. In 2004-05, the UC share will have dropped to 3.5% of the State’s budget.

4. 4 UC introduces “block” funding allocations to campuses during the 1990s. Higher Education Compact with Governor Wilson (1995-96 to 1998-99)  Provide stability after budget cuts of early 1990s and allow for growth through a combination of State General Funds and student fee revenue. Provided State General Fund increases of 4% annually during the 4-year period and anticipated student fee increases averaging about 10% per year. Legislature and Governor provided funding above compact levels, eliminating the need to increase student fees, helping to restore faculty salaries to competitive levels, and providing funds for high-priority research programs and K-14 outreach. General obligation bonds/lease revenue bonds provided annually for high priority capital projects. Partnership Agreement with Governor Davis (2000-01 to 2003-04) Average annual increase of 4% to the prior year’s General Fund base. Funding at agreed-upon marginal cost for all enrollment growth (estimated at 3%/year). Additional 1% increase to State General Fund base budget each year to phase correction of funding shortfalls for libraries, ongoing building maintenance, instructional equipment and instructional technology. One-time funding, contingent on State’s fiscal situation, for high priority needs such as deferred maintenance, libraries, equipment, instructional technology, and capital. Funding for new or expanded initiatives, such as opening of new campuses, special research initiatives, outreach programs, and transition to year-round operations. Revenue equivalent to that which would be generated by annual student fee increases of no more than the increase in the California per capital personal income. $210 million per year, consistent with Proposition 1A, to support capital outlay needs, with additional support envisioned beginning in 2002-03 through support of another general obligation bond measure. Accountability measures related to student access, eligibility and enrollment levels; graduation rates; fees and financial aid; outreach programs; and increases in research funding and private support.

5. 5 The average marginal educational cost per student has declined over the past 20 years, largely due to the deterioration of the student-faculty ratio. Students are paying a larger share of the cost of their education. The amount of student fee revenue supporting educational costs has more than doubled since 1985-86. The share of State funds supporting educational costs has declined dramatically, about a 40% decline between 1985-86 and the proposed 2004-05 budget.

6. 6 The history of undergraduate student fees is shown in the top line of the display. The wide fluctuation in student fees tracks fairly closely with changes in the State’s economy. In good years, fees were held steady or reduced. In years of fiscal crisis, student fees increased dramatically. The display also shows that, when adjusted to account for a family’s ability to pay (using California per capita personal income), fees in 2004-05 (assuming the Governor's Budget proposed 10% fee increase is implemented) would be only slightly higher than they were in 1971 ‑ 72.

7. 7 Beginning in the mid 1960s, the University’s budgeted student-faculty ratio was 14.5 students to one faculty. In the early 1970s, it increased to 17.6:1, where it stayed for nearly 20 years. During the budget cuts of the early 1990s, it rose to 18.6:1. During the 2003-04 budget process, the Governor’s office proposed to increase the student- faculty ratio to 19.6:1 ($34.8 million cut). However, UC treated the cut an unallocated reduction to other programs, so as not to “officially” increase the student-faculty ratio. However, given limited resources, in reality the ratio has probably increased to between 19.5:1 and 20: 1 this year. The Governor’s Budget for 2004-05 proposes to further erode the ratio by raising it to 20.7:1, representing a 10% increase over a two-year period. UC’s student-faculty ratio already compare unfavorably with our eight comparison institutions, where the ratio averages 17:1 at the four public comparison institutions and 10.4:1 at the four private comparison institutions.

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9. 9 ….while Institutional Support has declined in proportion to UC’s total budget. The UC budget has grown significantly since the late 1980s…. Total UC Budget $ in thousands

10. 10 Library Planning and Budgeting Stand-alone Libraries (1960s and 1970s) Opening day “core collections” for new campuses and intercampus bus services. Coordination to Support Regional and Systemwide Services (mid 1970s to mid 1990s) The University of California Libraries—A Plan for Development (1977) “One University, One Library” concept as a foundational principle Development of on-line union catalog State funding of acquisitions based on Voigt-Susskind model, which took into account enrollments and academic program offerings Increases in library staffing and operations cost based on approved enrollment increases.Funding for materials price increases based on actual cost increases for research library materials and campus acquisition patterns. State funding for construction of regional libraries, based on specific planned rates of storage for each campus. Campus deposits to regional libraries became a precondition of State funding for campus libraries, which were based on standard space planning factors. Agreements were fully funded during most of the 1980s. Cooperation to Develop a Shared Digital Collection (1997 to present) The Library Planning and Action Initiative launched in 1996. Acquisition strategies for library materials not sustainable over the long term. Build on collaborative efforts in place and use emerging technology to leverage systemwide approaches to improving services and containing costs. Beginning in 1998-99, State funds were provided for the start-up and operation of the California Digital Library. Under both the Wilson Compact and the Davis Partnership Agreement, funding for libraries provided as part funding for approved enrollment increases. During the three-year period 1998-99 to 2000-01, additional funding was received to restore earlier budget cuts and fund new initiatives.

11. 11 Note that the level of activity for online access to journal articles is counted in the millions, rather than the tens of thousands of interlibrary loans.

12. 12 Library Budget Issues UC Library Budget totals $249 million in 2003-04, with $206 million or 83% funded from UC and State General Funds. Acquisitions-processing represents 55% of the budget. Reference/circulation represents 39% of the budget. Systemwide Library Automation unit (MELVYL) represents 2% of the budget. California Digital Library represents 4% of the budget. Impact of current budget reductions on libraries. In general, most campuses have attempted to protect the collections portion of the library budget, either by exempting collections budgets from cuts or by allocating a more limited reduction to this portion of the library budget. Library staff positions have been eliminated, resulting in the reduction of library services and specialty expertise in certain academic program areas. Staff reductions have resulted in increased response time to patrons,and slowdowns in processing materials, retrieving items, and restocking shelves. Replacement of computer equipment and upgrading of information systems have been deferred. Challenges for funding new library initiatives. Will compete with restoration of budget reductions, funding for enrollment growth, and restoration of competitive salary levels. Need to demonstrate effective leveraging of systemwide library resources and facilities and “efficient” operations. Financial support for growth of shared collections will increasingly depend on funds allocated to the campuses (co-investment strategy). More information about library budget issues is available on the UC Libraries Web page "Library News“ at http://libraries.universityofcalifornia.edu/news/library_budgets.htmlhttp://libraries.universityofcalifornia.edu/news/library_budgets.html