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University of California2016-17 Budget for Current Operationsand Three-Year Financial Sustainability PlanExecutive Vice President Nathan BrostromAssociate Vice President Debora ObleyNovember 19, 2015
UC Remains Committed to its ThreePillars of Excellence Access– Expanding access for qualified residentundergraduates from across California Affordability– Ensuring finances are not a barrier forqualified students Quality– Providing top quality instruction, world-classresearch, and high-value public serviceDisplay 2
The Upshot (New York Times), September 17, 2015:“Colleges Doing the Most for Low-Income estudentsNet r student1UC Irvine5,44940% 13k1.91 11k2UC Davis5,06331% 14k1.62 24k3UC Santa Barbara4,59731% 14k1.61 11k4UC San Diego5,21828% 13k1.55 24k5UC Los Angeles5,68428% 13k1.53 65k6U of Florida6,34824% 9k1.52 29k7UC Berkeley4,67723% 13k1.37 92k8Vassar66222% 12k1.36 352k9Amherst46620% 11k1.33 930k10 Pomona39618% 9k1.32 1.147mDisplay 3
UC serves a higher proportion of low-incomestudents than other top research universitiesPercentage of Undergraduates from Low‐IncomeFamilies (Pell Grant recipients), lected Public Flagship InstitutionsUSCUniversity ofCaliforniaCalifornia Research UniversitiesDisplay 4
UC has reduced expenditures on aper-student basisState General FundsUC General Funds 24,100 3,070 2,210 22,000 23,200 4,330 5,420Student Tuition and Fees 2,140 2,110 19,700 18,900 5,990 7,920 2,400 18,820 14,470 3,200 16,730 11,310 7,7801990‐911995‐962000‐012005‐062015‐16 (est.)Average inflation‐adjusted resources per general campus student. Excludes financial aid.Display 5
The University’s budget is funded from avariety of sources State support, tuition, and UC General Funds providethe core support for UC’s basic operations.Medical Centers28.9% 8.2BOther Salesand Services22.3% 6.3BGov'tContracts& Grants14.3% 4.0BCore Funds25.8% 7.3BPrivate Support7.3% 2.1BUC GeneralFunds4.0% 1.1BStateGeneralFunds10.4%Tuition and Fees 3.0B11.4% 3.2BOther Sources1.4% 0.4BDisplay 6
Funding Framework:Predictable State Funds 4% base budget increases extended through2018-19– More than 500 million over next four years One-time funds to address deferredmaintenance and energy projects in 2015-16 One-time funding for UCRP unfunded liabilityover three years, contingent on implementationof State pensionable salary capDisplay 7
Funding Framework:Predictable Tuition Plan for Future Years No tuition increase for 2015-16 or 2016-17 Student Services Fee to increase by 5%,providing significant revenue for studentmental health services PDST increases may be proposed atprograms other than law Nonresident Supplemental TuitionincreasesDisplay 8
Budget Act of 2015:Key Elements 4% base budget adjustment, consistent with theframework 25M beginning 2015-16 if UC shows that it willenroll 5,000 more CA undergraduates by2016-17 (over 2014-15 base)– UC to demonstrate sufficient actions toaccomplish this goal by May 1, 2016– DOF will release 25M to UC at that time Dream Loan ProgramDisplay 9
UC’s 2016-17 Operating Budget Plan Expands access for California residentundergraduates Assumes no tuition increase Requires substantial contribution from UCin cost savings and alternative revenues Addresses UC’s mandatory and highpriority costs Invests in academic qualityDisplay 10
Sustained Expanded Access forCalifornia Undergraduates UC proposes 5,000 more CA undergraduatesby 2016-17 compared to 2014-15– Meaningful growth at every campus– Increase in CCC transfer enrollments– Graduate enrollment increase of 600 Increases in 2017-18 and 2018-19 will resultin 10,000 total increase in CA undergraduatesDisplay 11
Sustained Expanded Access forCalifornia Undergraduates (Cont’d) 25M from the State supports one-half of theundergraduate enrollment increase UC will fund the other half– Repurposing of financial aid funds for futurenonresident undergraduates – 14M in 2016-17 Existing nonresident students will not beaffected Additional savings in future years– One-time 25M in 2015-16 will be used astemporary bridge fundingDisplay 12
Trends in CA Resident 0010,000growthover 4years170,000160,000Figures represent total full‐time equivalent (FTE) enrollment of California undergraduates, including summerDisplay 13
UC’s 2016-17 Operating Budget Plan:Cost Savings/Alternative Revenues Asset management 40M Centralized procurement30M Fiat Lux/Risk Captive15M Philanthropy10M Redirected nonresident aid14M Subtotal 109MDisplay 14
UC’s 2016-17 Operating Budget Plan:State General Funds Permanent FundsUndergraduate enrollmentGraduate enrollment*4% base budget increaseSubtotal 25.0M6.0M125.6M156.6M 25.0M25.0M One-Time FundsPrior year enrollment fundingDeferred maintenance**Not included in the frameworkDisplay 15
UC’s 2016-17 Operating Budget Plan:Other Revenue Tuition and FeesStudent Services Fee (5%)Growth-related tuition revenueRevenue for financial aidSubtotal UC General FundsNonresident tuition 8.7M55.2M33.1M97.0M 68.7MDisplay 16
UC’s 2016-17 Operating Budget Plan:Mandatory Cost IncreasesRetirement contributions 24.1MEmployee health benefits28.4MAnnuitant health benefits4.2MContractually committed compensation26.9MFaculty merit program32.0MNon-salary price increases29.7MSubtotal 145.3MDisplay 17
UC’s 2016-17 Operating Budget Plan:Enrollment / High Priority Costs / Financial Aid Enrollment5,000 undergraduates and 600 graduates High Priority CostsCompensationDeferred maintenanceCapital outlaySubtotal Financial AidDream LoanReturn-to-aidSubtotal 56.0M129.4M50.0M15.0M194.4M5.0M30.6M35.6MDisplay 18
UC’s 2016-17 Operating Budget Plan:Investment in Academic Quality 50M available as a pool to campuses for:– Improved student-faculty ratio– Modernizing instructional technology– Graduate student support– New faculty supportDisplay 19
Three-Year Sustainability Plan:Key Elements Enrollment growth– 5,000 CA undergraduates and 600graduate students by 2016-17– 2,500 CA undergraduates and 700graduate students in 2017-18and 2018-19 Relies upon State marginal cost fundingof 10,000 per student after 2016-17Display 20
Funding Components Increases in State funds and tuition revenueconsistent with the framework State marginal cost funding for growthbeyond 2016-17 Growth in alternative revenues and costsavings from UC initiatives Continued investment in academic quality Moderate increases in mandatory andhigh-priority costsDisplay 21
Alternative Approach Assumptions provided by the Departmentof Finance (DOF) did not includeenrollment growth Alternative approach is consistent withDOF instructions included in the Appendixto the Plan Alternative approach does not reflectUC’s preferred path forwardDisplay 22
Budget Act of 2015: Key Elements 4% base budget adjustment, consistent with the framework 25M beginning 2015-16 if UC shows that it will enroll 5,000 more CA undergraduates by 2016-17 (over 2014-15 base) - UC to demonstrate sufficient actions to accomplish this goal by May 1, 2016 - DOF will release 25M to UC at that time
