Subject: [HR] Budget Update

From: Human Resources

Date: Mon, 18 May 2009 09:07:39 -0700 (PDT)

The following message is forwarded on behalf of Senior Vice President and Provost Jim Bean:

Colleagues:

The critical May 15 Revenue Forecast has been released. It shows that state revenues are down approximately $3.6B from the original forecast. The shocking thing is that this is considered good news. Some had predicted drops of up to $5B which led to plans for 30% budget cuts for all agencies. As the economy has begun to firm up, the losses have slowed. We are now expecting cuts in the range of 15% to 20% of our state appropriation. While this is challenging, it is a far cry better than the 30% scenario.

We are still facing some uncertainties. Yield for out-state students for next fall appears slightly soft. This is not surprising given the depth of the economic challenges facing California and Washington. Thanks to good planning by those managing enrollment, we kept a waiting list for the first time this year. We have admitted students on that list and hence believe that we will be close to our target of 3900 new students this fall.

While the smaller budget cuts will substantially moderate tuition increases for next year, non trivial increases will still be necessary to continue current operations and programs. We will need between 5 and 10% increases. The legislature is discussing tuition caps. So long as they are reasonable, we should be ok. If they get too stringent, they will have turned a reasonable scenario into a crisis. We are working to communicate this.

As we come to the end of this fiscal year, there are many renewal contracts to be signed. Yet we will not know the budget situation until after July 1. After consultation with FAC and a strong recommendation from the Budget Planning Committee, we have concluded that the least disruptive approach to this dilemma is to simply delay all renewal contracts until the budgets are resolved during the summer (exceptions are granted for visa issues, grant funded appointments and new hires).

Those of us whose employment extends past July 1 will be working without a new notice of appointment. This does not imply that you will not get paid, or that you will not get a notice of appointment when the picture clears. The General Counsel assures me that the University will pay those whose employment continues this summer even if new notices of appointment have not been issued. In order to make sure that everyone that is working is paid, please process your planned renewal contract documents as usual. Unclassified Personnel Services will ensure that all renewals received are set up for payroll and will issue contracts when the budget is resolved.

I understand that this is unsettling but we must retain the flexibility to augment contract language if mandated by the Governor or State Board of Higher Education. As mentioned above, we have reason to be optimistic. Still no layoffs planned.

Please let me know if you have any questions.

Regards, Jim