UC's proposed $17 billion budget for 2007-08 includes a $15 million research initiative and $10 million to help make up for previous cuts to instruction, as well as a 5 percent pool for employee compensation increases.

The budget proposal, approved by the Board of Regents on Nov. 16, provides for enrollment growth of 2.5 percent, or 5,340 full-time equivalent students.

The $17 billion spending plan includes money from all sources for all activities except the UC-managed national laboratories. UC is asking for state funding of $3.3 billion, an increase of $247.9 million, or 8.1 percent, over 2006-07.

The proposal is based on the university's compact with Gov. Schwarzenegger, an agreement that outlines state funding expectations and UC accountability expectations over a multiyear period. The proposal includes state investments beyond the compact.

"This is a budget that continues to provide access to the University of California for all eligible students and also makes strategic investments to strengthen our contribution to the state's economy, health and quality of life," President Robert Dynes said.

"Universities need to be in the business not just of research and development, but research, development, and delivery that translates knowledge into societal benefit," he added. "This budget invests in efforts to continue expanding the university's ability to deliver new contributions to the people of California."

Student fees on a systemwide basis remain an open question. Campus-based fees ($1,435 for UC Davis undergraduates in 2006-07), however, are subject to automatic adjustments for inflation.

The Board of Regents raised systemwide fees by 5 percent to 10 percent for 2006-07, but the state covered the cost — in effect "buying out" the increases.

UC officials said they do not know if the state will have sufficient resources for a buyout in 2007-08. As a result, the regents withheld action on student fees until after Schwarzenegger unveils his 2007-08 budget in January; the regents' budget proposal assumes $71 million in funding from either student fees or state income, or about 10 percent more than this year.

Kelly Ratliff, associate vice chancellor for budget resource management at UC Davis, said budget planning information will be distributed to the campus after the governor presents his budget next month. He is due to issue a revised proposal in May, and then the Legislature and governor are supposed to act by July 1.

Graduate student support

All students pay fees, but only nonresidents pay tuition. Under the proposed budget, nonresident undergraduates would pay an extra $900 tuition, or 5 percent, in 2007-08. Tuition would be frozen for graduate academic students for the third year in a row, as part of the university's effort to attract the most talented graduate students from around the world.

In proposing a $15 million research initiative, UC officials are asking campuses to invest at least 50 percent to 60 percent of that money to help support all graduate students, resident and nonresident, as research assistants.

For the 2006-07 academic year, UC Davis Provost Virginia Hinshaw allocated $2.5 million for a 25 percent "buy-down" of fees and tuition for graduate student researchers paid with external or nonuniversity funds. Ratliff said the provost will continue the buy-down in 2007-08.

The UC budget proposal's $10 million in extra funding for student instruction would help restore money that was cut in the irst part of the decade. This would be the third increment of funding in a three-year period aimed at improving the student-faculty ratio.

The proposed 5 percent pool for faculty and staff compensation increases would cover such categories as merit-based and equity-based salary increases, and health and welfare benefit cost increases. "This increase is intended to begin closing the market pay gap affecting many UC faculty and staff," a news release stated.

Retirement plan funding

UC is asking the state for $60 million for the first phase of reinstating employer contributions to the UC Retirement Plan. Employee members also are due to start making contributions July 1, 2007. A contribution "holiday" has been in effect for 16 years, because earnings on the plan's reserve kept the plan sufficiently funded.

Now, however, university officials say the plan will become underfunded within the next several years. Therefore, the regents decided that renewed contributions are necessary, eventually to a maximum 16 percent, split between the university and plan members. The split has not been decided, nor have the starting contributions.

Collective bargaining is under way with UC unions regarding the employee contributions. In the first year, UC is proposing to simply redirect the 2 percent that most employees are now required to put into individual defined contribution plans. Under the UC proposal, that 2 percent would instead go into the retirement plan.

More information is available online, budget.ucop.edu and www.universityofcalifornia.edu/news/ucrpfuture.