1. NATIONAL CENTER FOR THE STUDY OF COLLECTIVE BARGAINING IN HIGHER EDUCATION AND THE PROFESSIONS Institutional Collaboration in Times of Fiscal Crisis Patrick J. Lenz Vice President for Budget and Capital Resources University of California, Office of the President April 20, 2009

2. Overall State Fiscal Condition 2008-09 State Budget assumes a deficit of $14.8 billion. 2009-10 State Budget assumes a deficit of $41.6 billion. No funding for Capital Projects; State nearly issues IOU’s. Special Session Plan $21 billion in expenditure reductions; $15.8 billion in additional revenues; $5 billion shifting lottery revenue from state funded programs; $358 million in borrowing; $4.7 billion in Reimbursement Warrants to meet the cash flow needs. Display 1

3. Special Session Ballot Initiatives Prop. 1A – Rainy Day Reserve, Spending Cap, Extends Taxes Prop. 1B – Additional $9.3 Billion to K-12, CCC over 6 Years Prop. 1C – Mortgage the California Lottery Prop. 1D – Shift Tobacco Tax designated for Children’s Programs Prop. 1E – Shift Funding for Mental Health Services Prop. 1F – Cap State Elected Officials Salaries Display 2

4. UC Budget (2008-09, 2009-10) Special Session Budget Reductions $115.5 million Governor’s Veto, Fund Shift $255.0 million UC Budget Shortfall $450.5 million – Special Session Budget Reductions $115.5 million – Over-enrollment, Student Access $121.8 million – UC Mandatory Cost Increases $213.2 million (health benefits, utilities, collective bargaining agreements, faculty merits) Display 3

5. Average Expenditure Per Student Over Time Display 4

6. UC Regental Action UCOP and UC Campus administrative reductions Regents curtail enrollment growth for FTF Regents decision on student fees/financial aid Regents address collective bargaining Issues Salary increases, despite budget reductions Funding for increasing health care costs Retirement Program Display 5

7. UCOP and UC Campus Administrative Reductions UC, Office of the President Reduced by 30 percent, $30 million savings Regents freeze senior management pay Regents postpone prior year bonuses UC Campuses $115 million reduction, $450 million fiscal impact Shared Governance Consultation – Faculty, Staff, Students, and Administrators Focus on Administrative efficiencies and reductions Prioritization of Administrative and Academic Programs Protecting Classroom Instruction and Student Services Programs Display 6

8. UC Over-enrollment and Plans to Slow Enrollment Growth in 2009-10 Display 7

9. UC Undergraduate Fees and Cost of Attendance Proposed 9.3% fee increase will increase fees by $662 from $7,126 to $7,788. UC’s total cost of attendance remains comparable to other public institutions. UC’s strong financial aid program reduces the total cost by nearly half for needy students. Display 8

10. Financial Aid UC’s Return-to-Aid program Blue and Gold Opportunity Plan Support State Cal Grants Increase in Federal Pell Grants Federal Tuition Tax Credits Display 9

11. Address Collective Bargaining Issues Salary Increases Have collective bargaining agreements with 2 of 8 unions 4% 2008-09, 3% next four years for low-paid employees 2% - 8% over next three years for University police Health Care Funding UC pays 93-96% monthly premium for staff earning $46,000 or less UC pay “one-time” subsidy where 36,000 lower-paid employees will see a reduction in 2009 net monthly rates Retirement Program 18-year UCRP contribution holiday, State saved more than $2 billion State contributed $4.5 billion to CSU and CCC plans during that time State treat UC employees equitably and pay its share Display 10

12. Collaboration in Times of Fiscal Crisis – Maybe? UC Needs to Improve its Collaborative Relationships Challenges during collective bargaining process Transparency with all UC funding resources Shared Governance Communication – Especially with Students UC Constituents groups – Focus on Common Enemy Proposition 1A Higher Education is a State Funding Priority Hold Policymakers Accountable with their Vote on the State Budget Display 11