To all members of our campus community:
We are writing to let you know about our planning for next year’s budget, as we consider the implications of Governor Jerry Brown’s announcement of a proposed $500 million cut to the budget of the University of California. We do not yet know the full extent of the reduction for our campus, but based on past experience we might expect a cut of about 15% of the $500 million; this represents another significant challenge to Berkeley.
Together with the Office of the President and our Government Relations staff, we are working very hard to persuade the Governor and our legislators in Sacramento to reduce the cut and to ensure that, if additional cuts are handed down in June, we are not further impacted. However, realizing how dire the budget situation is for the State, it is unlikely that we can expect to be spared sharing any of the pain facing Californians in the next year. Realistically, we need to prepare for a major cut to our operating budget while also calling on you to continue to advocate with your representatives in Sacramento to reinvest in public higher education.
Fortunately, for several years now, we have been developing a multi-year strategy to reduce our dependence on State funding and stabilize our budget. To mitigate the shock of solving a huge budget gap in one year, it is our intention to reach equilibrium between our resources and our needs over a three-to-four-year period. In the meantime, we are augmenting our multi-year strategy of permanently decreasing expenses and increasing income, by identifying temporary budget measures using one-time resources to bridge us toward that end. The temporary measures that we are considering do not include furloughs.
As a campus, we are working diligently to reduce our costs and find new revenues. Our efforts to-date in Operational Excellence will reduce expenses on campus by some $30 million annually by restructuring and reducing the manager ranks on campus and through early improvements in purchasing. It is imperative that we continue to move ahead expeditiously with the OE initiatives to realize at least the full $75 million in permanent annual savings that we have identified. Tuition revenue is scheduled to increase by 8% in 2011-2012 and we will continue to implement our strategy to enhance income and strengthen our educational programs by increasing non-resident enrollment. The Campaign for Berkeley will almost certainly cross the $2 billion mark this spring and, in general, fundraising has been and is strong in spite of a difficult economy. We continue to develop new approaches to augment our investment returns and financial management measures to improve our balance sheet.
Our funding sources include the federal government, the state government, student fees, philanthropy from individuals, foundations and corporations, and income from our endowment. The balance among these is changing but our commitment to fulfilling our public mission is not. We are working closely in constant consultation with the Academic Senate and in communication with our student leaders and staff as we develop our budget strategies.
We remain firmly committed to Access and Excellence and will not compromise on these values that make Berkeley unique in public higher education. We have invested in faculty recruitment and retention, with 70 new positions being recruited this year, and are committed to recruiting as many as 70 new faculty in 2011-12. We have invested in maintaining the undergraduate curriculum by providing funding from fee revenues to increase and enhance Reading and Composition courses as well as gateway courses in Mathematics and the Physical Sciences. Our goal is to facilitate students obtaining the courses they need to graduate in timely fashion. We are about to fund an expansion of foreign language courses as well. We have maintained our financial aid programs in order to keep costs as low as possible for students from low-income families. We are hopeful that the state and federal governments will continue to be reliable partners in providing aid for our students who face significant financial challenges. We are increasing the funding for outreach activities using non-resident fee revenues. Through OE we are investing in providing training and tools to enable our staff to become highly effective in their work and to support the vital contribution that they make to campus, while continuing to reduce the cost and complexity of our administrative operations.
In the coming weeks, we will continue shaping our multi-year strategy and bridging measures. As we face this latest budget challenge and develop our response to it, we will keep you informed of progress. We appreciate that many of us have had to do more with less during these difficult budget times and we thank everyone for your efforts in supporting Berkeley’s excellence and, particularly, for your participation in Operational Excellence. We continue to invite constructive suggestions from all members of our community; these can be sent to email@example.com
Robert J. Birgeneau, Chancellor
George Breslauer, Executive Vice Chancellor and Provost