1. Jerry Kissler UCOP Budget Office BUDGET AND PLANNING A Universitywide Perspective April, 2002

2. Jerry Kissler UCOP Budget Office UC CONTEXT l California in a Global, Knowledge-Based Economy

3. Jerry Kissler UCOP Budget Office NOW, HIGHER INCOMES LINK TO EDUCATION

4. Jerry Kissler UCOP Budget Office UC CONTEXT l California in a Global, Knowledge-Based Economy

5. Jerry Kissler UCOP Budget Office UC CONTEXT l California in a Global, Knowledge-Based Economy l UC Is Large and Complex SC B D SF SB LA R I SD M

6. Jerry Kissler UCOP Budget Office UC CONTEXT l California in a Global, Knowledge-Based Economy l UC Is Large and Complex l University Revenues (Excluding the DOE Labs) Exceed 3Com and Union Carbide Combined l $15 Billion Annually (Including the DOE Labs) Equal to Top 125 U.S. Corporations

7. Jerry Kissler UCOP Budget Office CALIFORNIANS TAKE PRIDE IN UC QUALITY The University of California The Best Public University System in the World

8. Jerry Kissler UCOP Budget Office ECONOMIC CONDITIONS FLIPPED QUICKLY l Capital Gains and Stock Options Bubble

9. Jerry Kissler UCOP Budget Office CALIFORNIA’S BUBBLE

10. Jerry Kissler UCOP Budget Office ECONOMIC CONDITIONS HAVE FLIPPED QUICKLY l Concern about Economic Slowdown, Layoffs, Lower Tax Receipts l September 11, 2001 l Capital Gains and Stock Options Bubble More Than $12 Billion Budget Problem for California over Two Years

11. Jerry Kissler UCOP Budget Office SHARP GROWTH IN THIS DECADE Can We Maintain Quality during This Period of Exceptional Growth?

12. Jerry Kissler UCOP Budget Office SHORT-TERM vs. LONG-TERM l Cycles: California Had Financial Problems in Early 1980s and 1990s

13. Jerry Kissler UCOP Budget Office COSTS TO UNIVERSITIES HAVE RISEN STEADILY

14. Jerry Kissler UCOP Budget Office UC SPENDING LAGGED AND THEN CAUGHT UP

15. Jerry Kissler UCOP Budget Office SHORT-TERM vs. LONG-TERM l Cycles: California Had Financial Problems in Early 1980s and 1990s »Better Funding When Economy Improves »Fundamentals of California’s Economy Are Strong; Funding Should Improve Again

16. Jerry Kissler UCOP Budget Office SHORT-TERM vs. LONG-TERM l Cycles: California Had Financial Problems in Early 1980s and 1990s »Better Funding When Economy Improves »Fundamentals of California’s Economy Are Strong; Funding Should Improve Again l Lags: Faculty Hiring and New Buildings Lag behind Student Increases and Then We Catch Up at Enrollment Plateau

17. Jerry Kissler UCOP Budget Office ARE WE ON TRACK? l Slow Moving Indicators »Graduation Rates for Undergraduates »Rankings of Departments and Programs l Early Warning Indicators »Undergraduate Enrollment »Graduate Enrollment »Faculty Hiring and New Buildings »Salaries »Academic Support »Financial Aid »Graduate Student Support

18. Jerry Kissler UCOP Budget Office WHERE DO WE GET OUR RESOURCES?

19. Jerry Kissler UCOP Budget Office STATE DOLLARS & STUDENT FEES ARE THE FOUNDATION Enrichment Core UC Support UC’s Diversified Funding Adds Stability State Funds Student Fees Private Fund Raising Research Hospitals, Dorms, Athletics D.O.E.

20. Jerry Kissler UCOP Budget Office STATE FUNDING DROPPED IN EARLY 1990s

21. Jerry Kissler UCOP Budget Office STUDENT FEE INCREASES COVERED ONLY 1/4TH

22. Jerry Kissler UCOP Budget Office PRIVATE FUND RAISING HAS BEEN A TERRIFIC SUCCESS

23. Jerry Kissler UCOP Budget Office SO HAS THE GROWTH IN FEDERAL RESEARCH

24. Jerry Kissler UCOP Budget Office BUDGET DEVELOPMENT UC Drafts Budget Request January July Year 1 President Meets with Dept. of Finance Regents Approve Budget Request Governor’s Budget Leg. Analyst Recommendations Subcommittee Hearings

25. Jerry Kissler UCOP Budget Office BUDGET DEVELOPMENT UC Drafts Budget Request January July Year 1 President Meets with Dept. of Finance Regents Approve Budget Request Governor’s Budget Leg. Analyst Recommendations Subcommittee Hearings Conference Committee Senate and Assembly Approve Budget Bill Line Item Veto and Gov. Signature

26. Jerry Kissler UCOP Budget Office BUDGET MANAGEMENT January July Year 2 UC Expends Funds Fiscal Closing

27. Jerry Kissler UCOP Budget Office ALLOCATIONS TO CHANCELLORS 1996-97 UC Budget Initiative Changed Internal Budget Allocations Decentralization of Authority Can Go Hand-in-Hand with Accountability

28. Jerry Kissler UCOP Budget Office BUDGET MANAGEMENT January July Year 3 Reporting / Accountability for Results Fiscal Closing

29. Jerry Kissler UCOP Budget Office SUMMARY l UC Is More Important to California l A Decade of Exceptional Growth l UC Is Best Public University System l But There Are Some Early Warning Signs l California’s Short-Term Economic Problems l Long-Term Economic Strength l Expectation Management on Campus

30. Jerry Kissler UCOP Budget Office SATISFACTION IS RELATED TO EXPECTATIONS