Editor's note: Legislators came to a budget deal on Feb. 19, a day after Dateline UC Davis went to press with the following article. It reports on Chancellor Larry Vanderhoef's Feb. 12 brown bag chat—a session dominated by budget talk. Even with the state budget deal, which Gov. Schwarzenegger was expected to sign on Feb. 20, the UC system still faces huge financial challenges. Look for updates in future editions of Dateline, and at budgetnews.ucdavis.edu.

Chancelllor Larry Vanderhoef said last week that the state budget crisis means “we have to get used to doing things differently.” But “different” does not necessarily mean employee furloughs — saying that the UC system was not considering furloughs at this time.

The chancellor’s comments came during his winter quarter brown bag on the Davis campus. About 80 people turned out for the noontime chat Feb. 12 in MU II at the Memorial Union.

For 2008- 09, UC Davis is dealing with a shortfall of $46 million so far. “That’s why all of you in one way or another are feeling the pinch,” Vanderhoef said.

The shortfall includes a $5 million midyear cut that Provost and Executive Vice Chancellor Enrique Lavernia ordered Feb. 11, one day before the chancellor’s brown bag.

“We know these are anxious times,” Lavernia told the brown bag audience. “We very much appreciate the sacrifices that everyone is making.”

The provost said he will set budget targets soon for 2009-10, when UC Davis will face an estimated shortfall of $35 million. “We anticipate these cuts will be permanent,” said Lavernia, who took up the provost’s post Jan. 1.He echoed the chancellor’s comments on doing things differently, and explained how faculty-staff committees had begun the task of reviewing the budget, with a goal of recommending systemic changes for 2010-11.

“Fundamentally, I believe that if we pull together, we can end up in a better place,” Lavernia said. Still, “it’s going to be painful.”

Vanderhoef borrowed from UC Regent Russell Gould in saying that the economic crisis hitting the nation is more than a recession: It is a “reset” — and not just in the housing market.

The reset also applies to California state government, Vanderhoef said. “The state has been overspending,” he said. “We are going to have to get used to smaller budgets, to spending less.”

Gov. Schwarzenegger and the Legislature wrestled with that problem all last weekend and into this week, without success by the time Dateline went to press early on Feb. 18.

Still, the UC system is forecasting a $65 million midyear cut in state funding, and expects that this cut will be permanent. UC Davis’ share of such a cut is $9.1 million annually.

On top of this, UC Davis must figure in the cost of the employer’s share of renewed retirement contributions, scheduled to begin April 15, 2010, as well as recent contract settlements with the American Federation of State, County and Municipal Employees (representing service workers and patient-care staff), and the California Nurses Association.

Another union, University Professional and Technical Employees, or UPTE, is still negotiating a new contract — and several people identifying themselves as UPTE members came to Vanderhoef’s brown bag to ask his support for pay increases.

Before the meeting, the UPTE contingent handed out single roses and loaves of bread — with a spokeswoman telling the chancellor that the roses symbolized “our professional dignity” and the bread “our need to survive.”

Vanderhoef pointed out that the UC Office of the President handles all labor negotiations. “Hopefully, UPTE will be next (with a settlement),” the chancellor said. “I’m sorry that, in the meantime, it will be tough times.”

A handful of students voiced their support for continued funding of gender education programs, including instruction in women’s self-defense, through the Women’s Resources and Research Center.

Regarding the budget cut, Student Affairs Vice Chancellor Fred Wood said talks are continuing with students.

Vanderhoef advised the students to continue pressing their cause, but he cautioned that for these students — and anyone else fighting budget cuts — the solution cannot be simply to say: “Cut everybody else but us.”

Indeed, the chancellor noted: “As we decide to spend more money on anything, it’ll have to come from someplace else.”

The overall goal, he said, is “to make sure we land on our feet.”

UC Davis started the 2008-09 fiscal year with nearly $17 million in permanent cuts. Then, in October, UC Davis took an additional hit of $5 million from the state, prompting then-Provost Barbara Horwitz to order a 3 percent levy on nonfederal, self-supported activities.

For the new $5 million cut, Provost Lavernia has given deans and vice chancellors the discretion to cut where they like — so long as they meet the provost’s targets: 25 percent of 2007-08 travel and entertainment expenses from general funds, indirect cost funds, professional degree funds and lottery funds; and 0.24 percent of 2007-08 general and unrestricted expenditures.

Vanderhoef said rumors of layoffs and furloughs are being prompted in part by what Gov. Schwarzenegger is doing. As the budget stalemate dragged on, the governor threatened to send out thousands of layoff notices, after previously ordering two-day-a-month furloughs for thousands of employees.

But, as much as he may want UC to go along, the governor has no authority over the UC work force.

The UC Office of the President made cuts in a different way — by curtailing undergraduate enrollment growth, and by freezing the salaries of top administrators and significantly restricting compensation for a large group of senior leadership.

Vanderhoef said furloughs “are not something that have been on UC’s mind so far.”

And, he said, as far as he knew, if UC rolls out a furlough plan, it would be systemwide. This would appear to quash a suggestion from UC Berkeley that it would start its own furlough plan.

STATE OF THE CAMPUS

Chancellor Larry Vanderhoef is due to deliver his annual address to the Academic Senate at 2:10 p.m. Feb. 24 in MU II at the Memorial Union.

Budget updates.