200809 University Budget Overview by bxl82158

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									                 University of California, San Diego

                 2008/09 Proposed Resource Allocations



2008/09 University Budget Overview
The California State Legislature has not sent a budget to the Governor. Consequently, the state budget is
not yet final.

The Governor’s proposed January budget increased funding under the “compact” with the University by
$223 million, and then applied a cut of 10% (or $332 million) as a budget balancing reduction. This
would have left the University with a net 3% state funding reduction relative to fiscal 2007/08. Of the
$332 million budget reduction, the Governor’s proposal called for 10% to come from administrative
spending and urged that cuts to instructional programs be minimized.

In May, the Governor submitted a revised budget proposal that restored $98.5 million of the University’s
state general fund support. If the budget bill is enacted as currently written, the University’s state-funded
operating budget will decrease $10 million to $3.26 billion in 2008/09, leaving no new funding for
enrollment growth, mandatory cost increases, or new initiatives.

To help offset the State budget reduction, the Regents approved student fee increases for 2008/09 of 7%
in the Educational Fee and 10% in the Registration Fee. The Regents also approved a 5% increase in
non-resident tuition for undergraduate students. Increases in professional school fees ranging between
7% and 19% were also approved by the Regents. To assist with the budget gap, the Office of the
President (OP) reduced its administrative costs by $28 million, providing some necessary budget relief in
funding the campus’ 2008/09 budgets.

The University’s capital budget requested $488 million, in general obligation (G.O.) bond funding, for
construction and renovation of facilities to address enrollment growth, life safety and infrastructure
renewal needs. This included $100 million to support construction of projects that will continue efforts
by the University’s medical schools and related programs to address statewide shortages in healthcare.
However, due to the State’s multi-million dollar deficit, there is no legislative support for G.O. bonds.
Therefore, the Governor and the University are considering the option of lease-revenue bond legislation
to address the University’s capital needs.


Summary of Allocations to the University of California, San Diego
The campus must take a balanced and planned approach as it prepares to reduce state budgets. To inform
this process, campus Vice Chancellor (VC) units were asked to present to Budget Committee their
strategic priorities in a multi-year planning environment, as well as methods planned to employ should
state budgets decline by 10%. In a multi-year approach, the campus must consider options that address
long-term budget needs, create flexibility and accommodate growing and changing campus priority needs.
 Options must consider leveraging operating balances to mitigate future funding uncertainties and
streamline effort-intensive processes for longer term savings. Specifically, we must:

•   Recognize and continue to protect priority programs;
•   Increase, optimize and diversify resources while strengthening investments;
•   Decrease costs and increase overall efficiencies, without compromising quality.



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                University of California, San Diego

                2008/09 Proposed Resource Allocations


The proposed resource allocation package reflects the official preliminary allocations to the campus from
the Office of the President (OP) received on June 13, 2008, the most current information on actions taken
by the state and other campus allocation information available to date.


A. Directed Allocations

Directed Allocations include funding adjustments that are directed to specific Vice Chancellor (VC) units.

General Campus

1. A permanent allocation of $107,000 for the Rady School of Management, derived from a
   Professional School Fee increase of 10% for resident students and a 5% increase for non-resident
   students, and a corresponding permanent allocation of $52,700 for student financial aid.

2. A permanent allocation of $37,700 for the Graduate School of International and Pacific Studies,
   derived from a Professional School Fee increase of 7% for resident students and a 5% increase for
   Non-Resident students, and a corresponding permanent allocation of $18,500 for student financial
   aid.

3. A permanent allocation of $1,392,000 and a temporary allocation of $930,100 for Graduate and
   Professional University Student Aid Program (USAP). The permanent allocation includes student
   aid funding of $1,319,100 for budgeted student enrollment increases in the regular academic year as
   well as $72,900 for summer. In addition to need-based financial aid, campuses may use designated
   portions of the graduate USAP allocation for Teaching Assistant fee remissions, Research Assistant
   fee remissions, and non-need-based fellowships.

4. A permanent allocation of $24,600 for the Joint Doctor of Education (JEd.D) program derived from
   a Program Fee increase that is equivalent to approved increases for the Educational, Registration and
   campus-based fees. Of this amount, $8,100 is designated for graduate financial aid, $1,200 is
   designated for administrative expenses, and the remaining $15,300 is distributed to the participating
   institutions based on approved funding agreements.

Health Sciences

5. A permanent allocation of $773,300 and a temporary allocation of $179,800 for the Skaggs School of
   Pharmacy and Pharmaceutical Sciences. The allocation includes:
   • $238,700 permanent Professional School Fee and $179,800 temporary Educational and
      Registration Fee support for enrollment workload growth of 40 budgeted student FTE which
      includes 30 Pharm. D. students;
   • $279,500 support derived from Professional School Fee increase of 14.8%; and
   • $255,100 support for student financial aid from Professional School Fee income.




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                2008/09 Proposed Resource Allocations


6. A permanent allocation of $654,100 permanent and a temporary allocation $180,000 for the School of
   Medicine. The allocation includes:
   • $112,600 permanent Professional School Fee and $180,000 temporary State Supplement for
       enrollment growth of 12 M.D. FTE for the Program in Medical Education: Health Equity
       (PRIME-HEq);
   • $325,700 support derived from Professional School Fee increase of 7%; and
   • $215,800 support for student financial aid from Professional School Fee income.

Student Affairs

7. A permanent allocation of $6,885,000 and a temporary allocation of $1,556,500 for Undergraduate
   University Student Aid Program (USAP). The permanent allocation includes an increase of
   $5,747,800 to San Diego’s share of the systemwide USAP allocation based on the Education Finance
   Model and intended to support students during the regular academic year, plus an increase of
   $1,137,200 intended to support students enrolling in the summer.

8. A permanent allocation of $1,534,500, derived from the 10% increase to the Registration Fee, of
   which $470,000 is for inflationary cost adjustments and $1,064,500 is for enhancement of student
   mental health services which includes $65,500 derived from summer fee increases.

9. A temporary allocation of $504,000 from the increase in the Undergraduate Application Fee
   intended to support Comprehensive Review in Admissions.

Business Affairs

10. A permanent increase of $764,000 to support basic operations and maintenance of new space that will
    come online in 2008/09.



B. Components for Campus Allocation

Components for Campus Allocation include funding adjustments that are to be distributed across various
VC units based on agreed-upon allocation policies.

San Diego’s approved budgeted student enrollment for the General Campus remains at the 2007/08 level
of 26,375 FTE. As a result, no additional faculty positions are budgeted.

11. A temporary allocation of $2,668,000 for General Campus Enrollment Growth of 600 budgeted
    student FTE.

12. A temporary allocation of $188,200 for Health Sciences Enrollment Growth of 12 budgeted student
    FTE for PRIME-HEq.




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                2008/09 Proposed Resource Allocations


13. An estimated permanent allocation of $3,300,100 in campus Indirect Cost Recovery (ICR) Funds
    to VC units, attributed to growth in total federal recovery of 5.0% and growth in total private/local
    recovery of 6.6%.

14. A temporary allocation of $947,800 in Indirect Cost Recovery (ICR) generated from the recovery of
    grants issued by the California Institute for Regenerative Medicine (CIRM). CIRM-ICR allocation is
    on a 3-year pilot agreement where VC Academic Affairs and VC Health Sciences have agreed to
    ‘pool’ these resources in support of CIRM. This agreement will be revisited after 2009/10 recovery
    year, taking into consideration the funding requirements for the new San Diego Consortium Stem
    Cell Research facility. These operating funds must be expensed by September 30, 2008 in
    accordance with OP requirements.

15. A permanent assessment of $3,835,000 to the campus’ administrative budgets with funds reallocated
    to campus priorities. The Governor’s January Budget proposal included an expectation that,
    Universitywide administrative budgets be reduced by $32.2 million. Although campuses are given
    broad flexibility in targeting this reduction among administrative activities, campuses should protect
     faculty, teaching assistants, utilities, outreach, and financial aid budgets.

16. A temporary allocation of $1,950,000 to assist the campus in funding Faculty Recruitment and
    Retention. These temporary funds, which have been provided to help address significant enrollment
    growth over the last decade, will be eliminated following the 2009/10 budget year.

17. A permanent allocation of $1,140,100 in State Lottery Funds intended to help the campus address
    constrained budgets.

18. A permanent reduction of $38,000, and related decrease of .48 faculty FTE, for the University
    Faculty Hiring Incentive Program. This is a five-year program designed to promote hiring of
    current or former Presidential Postdoctoral Fellows into permanent faculty positions.

19. A temporary reduction of $819,000 to provide full funding for enrollment growth at UC Merced.

20. A temporary reduction of $217,000 to provide full enrollment funding for continued expansion of the
    Programs In Medical Education (PRIME).

21. A continuing State Energy Budget deficit of $7,300,000 to be funded by a campus VC assessment.

22. A temporary subsidy request of $1,018,500 to provide for the on-going costs related to Information
    Systems upgrades.

23. A temporary subsidy request of $750,000 to support the multi-year funding plan for the Next
    Generation Network.

24. A temporary subsidy request of $600,000 to provide support to the Early Childhood Education
    Center (ECEC) facility to fund debt service costs and provide an operating subsidy.




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25. An estimated permanent allocation of $7,170,000 for Inflationary Cost increases, $5,725,000 from
    Education Fee increases, $915,000 from the 5% fee increase in the 2008/09 Non-Resident Tuition
    (NRT) for undergraduates, and $530,000 from Registration Fees. Funds are intended to support:

    •   Continuation costs for 2007/08 salaries;
    •   Employee benefits cost increases; and
    •   Faculty merit increases.

    As a result of no state funding and insufficient fee income to cover compensation costs, no funding is
    available for non-salary inflationary cost increases.

26. Substantial increases in the General Liability and Property Insurance programs will lead to an
    increase in the payroll assessment rate from $0.34 to $0.46 per $100 of gross payroll. Sufficient
    balances exist in campus liability reserves this year, therefore, no VC assessments are required to
    cover the related additional General and Federal Funds costs for the 2008/09 year. However, VC
    assessments are anticipated in 2009/10.




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                                                                 Schedule 2
                                             2008/09 FUNDS AVAILABLE FOR CAMPUS ALLOCATION

                                                                                                                              Permanent                                  One-Time
A. Directed Allocations
   General Campus
      Rady School of Management Allocation
          Professional School Fee Increase - Operating (1)                                                          $                        107,000          $                                  -
          Professional School Fee Increase - Financial Aid                                                                                    52,700                                             -
      IRPS
          Professional School Fee Increase - Operating (1)                                                                                    37,700                                         -
          Professional School Fee Increase - Financial Aid                                                                                    18,500                                         -
      Graduate/Professional Aid (USAP) - Educational Fee and Summer Fee(2,3)                                                               1,392,000                                   930,100
      Joint Ed.D Program - Program Fee Increase (4)                                                                                           24,600                                         -
              Subtotal                                                                                                                     1,632,500                                   930,100
   Health Sciences
      Skaggs School of Pharmacy and Pharmaceutical Sciences
          Enrollment Growth: Ed, Reg and Professional Fee(5)                                                                                 238,700                                   179,800
                                          (1)
          Professional School Fee Increase                                                                                                   279,500                                         -
          Professional School Financial Aid                                                                                                  255,100                                         -
      School of Medicine
          Enrollment Growth (PRIME): Professional Fee and Institutional                                                                      112,600                                   180,000
              Supplement Equivalent (6)
          Professional School Fee Increase(1)                                                                                                325,700                                         -
          Professional School Financial Aid                                                                                                  215,800                                         -
              Subtotal                                                                                                                     1,427,400                                   359,800
   Student Affairs
      Undergraduate Aid (USAP) - Educational Fee and Summer Fee(3,7)                                                                       6,885,000                                 1,556,500
      Cost Adjustment - Reg Fee Increase (8)                                                                                                 470,000                                         -
      Student Mental Health Support - Reg Fee Increase(8)                                                                                  1,064,500                                         -
      Undergraduate Application Fee Income                                                                                                         -                                   504,000
              Subtotal                                                                                                                     8,419,500                                 2,060,500
   Business Affairs
      Operation and Maintenance of Plant - New Space                                                                                        764,000                                          -
              Subtotal                                                                                                                      764,000                                          -
   Total Directed Allocations                                                                                       $                    12,243,400           $                      3,350,400
B. Components for Campus Allocation
      Enrollment Growth:
          General Campus - Ed and Reg Fee                                                                           $                              -          $                      2,668,000
          Health Sciences PRIME - Ed and Reg Fee                                                                                                   -                                   188,200
              Total Enrollment Growth                                                                                                              -                                 2,856,200
      Estimated Campus Indirect Cost Recovery                                                                                              3,300,100                                         -
      CIRM Indirect Cost Recovery                                                                                                                  -                                   947,800
      Administrative Budget Reduction                                                                                                     (3,835,000)                                        -
      Reallocation of Administrative Budget Reduction                                                                                      3,835,000                                         -
      Faculty Recruitment and Retention                                                                                                            -                                 1,950,000
      Lottery Funds                                                                                                                        1,140,100                                         -
      UC Adjustment: Faculty Hiring Incentive Program                                                                                        (38,000)                                        -
      UC Adjustment: UC Merced Enrollment Growth Assessment                                                                                        -                                  (819,000)
      UC Adjustment: PRIME Expansion Assessment                                                                                                    -                                  (217,000)
      Energy Shortfall                                                                                                                             -                                (7,300,000)
      Information Systems Assessment                                                                                                               -                                (1,018,500)
      Next Generation Network Assessment                                                                                                                                              (750,000)
      Early Childhood Education Center Assessment                                                                                                  -                                  (600,000)
   Total Campus Allocations                                                                                         $                      4,402,200          $                     (4,950,500)
Total Allocations Available for Distribution                                                                        $                    16,645,600           $                     (1,600,100)
                                              (9)
     Inflationary Cost Block Funds                                                                                                        7,170,000                                          -
TOTAL ALLOCATIONS                                                                                                   $                    23,815,600           $                     (1,600,100)

Footnotes:
1.   Professional School allocations reflect the following fee increases:
     • Rady - Residents 10% and Non-Residents 5%          • IRPS - Residents 7% and Non-Residents 5%
     • Medicine - Residents and Non-Residents 7%         • Pharmacy - Residents and Non-Residents 14.8%
2.   Funding for graduate/professional USAP includes 50%/33% of the increase in student fee income associated with enrollment growth and fee increases.
3.   A portion of a temporary $60 surcharge, assessed to all students, will flow to campuses through USAP. Total is $541,863: Undergrad. $407,001 and Grad. $134,862.
4.   Joint Ed D program fee increase: Student Affairs: $1,200, Financial Aid: $ 8,100 and $15,300: Education Studies
5.   Funding includes Ed Fee for growth of 40 budgeted Pharmacy student FTE and Professional School Fee income generated by growth of 30 Pharm. D. FTE.
6.   Funding includes Institutional Supplement of $15,000 per PRIME M.D. FTE and Professional Fee Income generated by growth of 12 PRIME M.D. FTE.
7.   UCSD's share of the systemwide undergraduate USAP allocation is based entirely on the Education Financing Model.
8.   The 10% increase in the Registration Fee supports cost adjustments and student mental health services. Includes Admin Fee for JEdD program support.
9.   The $5.725 million Education Fee Inflationary Cost block funds allocation from OP is allocated centrally and intended for mandatory inflation costs (continuation costs, health benefits;
     and faculty merits). Additional support for compensation is reserved from NRT, Reg Fee, and Summer Fee income.


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