In the wake of adoption of the final 2001-2002 California state budget late last month, Dateline recently sat down with John Meyer, vice chancellor for resource management and planning, and Marj Dickinson, assistant vice chancellor for government and community relations, to discuss the impact of the budget and the state's fiscal future on the UC Davis campus.
Q: As the budget was amended and trailer bills added, did the funding situation change for UC Davis or the University of California?
MD: First, it's important that people understand that while the budget isn't the same one proposed by the governor, we had a good increase in our budget, a 4.7 percent increase in our overall budget from the state general fund, and at the same time overall state expenditures dropped 1.7 percent. We need to be careful not to overstate that this is a bad budget. It's not as good as what was proposed in January, but there were some external factors related to the economy and to the energy situation.
JM: I think that most people would argue that given the budget might not be as robust as people would like, the university was clearly a high priority for the Legislature and the governor. Relative to other programs (such as state agencies which had their budgets cut), it fared very well.
Q: What impact, if any, will we feel around campus from this year's smaller state budget allocations?
JM: The capital budget (for building projects) fared very well. It's not reliant on the general fund but reliant on the last year of a bond fund. This year's capital allocation is approximately $230 million systemwide, but campus is getting approximately $51 million.
MD: Our major share of that is for the sciences laboratory building's construction costs.
JM: That's great news because it's a classroom and teaching laboratory, which will really help address enrollment growth. That project will be coming on-line at just the right time.
There are some small pockets of reductions that affect instructional technology, library materials and I believe there are reductions to outreach activities, which I think every campus is trying to best respond to and also keep our commitment to those schools with which we have a relationship. Those will bring big challenges.
Q: How are campus departments handling the loss of funds?
JM: I think the specific units are trying to evaluate those effects. Student Affairs is working now I'm sure on how to realign the (outreach) program without any dramatic reduction in services.
Q: What good news came out of the state budget for UC and UC Davis?
MD: The overall good news is that we were treated quite well, all things considered. We have enrollment growth fully funded, which is very important. And there is enough money to avoid systemwide fee increases for the seventh straight year; those are good things.
JM: Also, there is about $8 million to compensate our campus for increases in energy costs. So if the Office of the President didn't negotiate that type of increase, we would be in a very difficult situation to absorb the very dramatic increase in energy costs this year.
MD: The budget includes substantial money for Internet II for infrastructure costs and pretty substantial increases in clinical teaching support for the five (UC) teaching hospitals.
JM: The capital program is intact and not affected by the budget. Building projects that were in the queue for next year can proceed.
MD: I don't think we can overstate how important the $44 million for the construction of the Sciences Laboratory Building is. And there is key, very key funding for the next steps of (the new School of Veterinary Medicine lab building) Vet Med 3A - $3.3 million in the budget for working drawings and another $3.7 million for infrastructure costs. This leaves us very well positioned for the next step, which will be construction dollars.
Q: Any other funding issues we should have our eye on in the near future?
Legislation authorizing a bond measure will be considered by the Legislature. It's strictly for construction projects. When the Legislature is on vacation at the end of this month there's likely to be very intense action on the size of the bond measure, the distribution, whether it wll be a combined higher ed and K-12 bond or not, and the timing - what ballot it goes on. It needs to go on the March or November ballot in 2002.
Q: Does UC Davis have specific projects that would be funded through this measure?
JM: The $70 million construction of Vet Med 3A is the primary one, the first that would benefit from the bond. In addition, there's some expansion of sciences, agricultural and environmental sciences facilities and then infrastructure improvements that make all of this happen.
Q: Beyond the next year what do you expect the state's budget picture to look like?
JM: In the next few years it's going to be very difficult because in this year's budget, the state consumed a significant amount of its reserve. You can do that once, but just to stay steady-state next year, the state will have to entertain reductions. It's my understanding that state agencies have been asked for reduction scenarios of various percentages. We believe that the university will be able to get funding for enrollment growth, but supplemental funding for special programs will be a challenge.
Q: Will UC go after the restoration of the Partnership Agreement as one of its key priorities for next year's budget?
JM: Absolutely. Whether or not they can sustain that is the question. This year the partnership is holding hands; it's not a full hug. I just think it's going to be a very difficult for the state.
MD: It's pretty hard to find a year that had such major changes mid year as the turnaround in the economy and the energy crisis did this year. I think most people coming a year ago thought the governor had been very conservative as to how much of the surplus he had spent in the 2000-'01 budget. In just a few months, demand on the surplus and the decline in state revenues has proven that prudence was well founded.