Budget Update, June 2009

Financial Stability

Chancellor Block shares three possible plans under consideration for reducing the pay of all UC employees.

During town hall meetings with staff and faculty, and in several recent campuswide communications, Executive Vice Chancellor Scott Waugh, Vice Chancellor Steve Olsen and I have discussed with you the need for the University of California and UCLA to realize massive cost savings through a number of measures. I appreciate all we have already accomplished by deferring hiring and eliminating vacant positions where possible, reducing travel costs and other expenses, and increasing operational efficiencies.

However, throughout the past several weeks, it has been clear that one component of our plan would be salary reductions and/or furloughs for our faculty and staff. Now, in response to the financial emergency we are facing, the University of California Office of the President has drafted descriptions of three possible plans under consideration for reducing the pay of all UC employees.

As this latest communication from UCOP again highlights, this is an extremely difficult period for all of us, and I am fully aware that decisions about our university’s finances are having a real and immediate impact on your lives. I am extremely concerned about the effect of these cuts, not only on UCLA’s academic mission, but also on the welfare of our faculty and staff and your families.

The best way to make your voice heard about the proposals is to forward feedback by July 1 to your department head, human resources representative, or Lubbe Levin, associate vice chancellor, Campus Human Resources, at llevin@chr.ucla.edu.

UC President Mark Yudof will consider input from employees before making his recommendation to the UC Regents, who ultimately will approve the plan that is implemented at their mid-July meeting.

Whichever plan is eventually chosen would be in effect from August 1, 2009, until July 31, 2010, unless extended by further action by the Regents. Briefly, the plans under consideration are as follows:

• Option 1: Salary reduction. Salaries for all faculty and staff earning $46,000 or more would be reduced by 8 percent; salaries for faculty and staff earning less than $46,000 would be reduced by 4 percent. Projected cost savings to the University of California general fund: $193.5 million.
• Option 2: Unpaid days. Staff and faculty salaries would be reduced by 8 percent through a combination of certain unpaid holidays and scheduled furlough days totaling as many as 21 days; the number of unpaid holiday/furlough days would be fewer for employees earning less than $46,000, academic year faculty and fiscal year faculty. Projected cost savings to the University of California general fund: $195.4 million.
• Option 3: Hybrid of salary reduction and unpaid days. Employees earning $46,000 or more would take a combination of unpaid holidays, scheduled holidays and salary reduction that would produce an overall salary reduction of 8 percent; for employees earning less than $46,000, the combination would yield an overall salary reduction of 4 percent. Projected cost savings to the University of California general fund: $194.1 million.

Each one of us — myself included — will be affected by the plan President Yudof recommends, so please familiarize yourself with the details of the proposed options and voice your opinion. Especially at times like this, I truly value your contributions to our campus and your sacrifices for the continued excellence of the university.