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Campus Budget Update

August 28, 2020
Kim A. Wilcox
Chancellor
August 28, 2020

Dear Campus Community:

Thank you to the many members of the UC Riverside community who have taken the time to respond to surveys, make budget suggestions, participate in town halls, view videos, and otherwise participate in our process to respond to the budgetary challenges that have resulted from the COVID-19 pandemic. 

We are ready to enter the next phase of this process. 

Status of the Budget
As we have noted before, UCR’s “core” budget covers our main instructional and research operations, and is funded primarily by the state, student tuition, and nonresident student supplemental tuition. State funding to UCR’s core budget in fiscal year 2021 is being reduced by 10.4% percent (without adjustment for School of Medicine special funding). 

This reduction in permanent state funding does not include additional losses incurred by campus auxiliary services (e.g., housing, dining, and hospitality services; transportation and parking services), annual increases in operating expenses, reductions in resident and nonresident enrollment, and other one-time expenses caused by COVID-19 (testing, sanitation, technology infrastructure, and more). 

The result of this once-in-a-lifetime convergence of factors is the need to prepare for significant budget reductions over at least the next two years, as the state budget outlook for FY 2022 is worse than FY 2021.

Budget Advisory Committee Recommendations
The preliminary set of recommendations from the Budget Advisory Committee (BAC) is available at this website. As their name states, the role of the committee is advisory to the provost and chancellor. Please take the time to review their recommendations and supporting documents. 

The committee recommends that every major organizational unit on campus – academic and non-academic – develop plans to reduce their core budgets by a range of 10-15 percent over a two-year period (FY 2021 and FY 2022).

The Budget Advisory Committee’s recommendations are informed by significant engagement and communication with the campus community. In addition to surveying students and employees, the committee held multiple campus forums and engaged groups including but not limited to the Academic Senate Planning and Budget Committee, ASUCR, Graduate Student Association, Staff Assembly, represented staff, and others.

Thank you to the faculty and staff on the committee for their diligent efforts to deliver thoughtful and detailed recommendations at a time where talking less about investment and more about reductions.

Why Two-Year Plans
We anticipate a reduction in state support of approximately $32 million this year. In addition, the California Department of Finance is currently predicting an $8.7 billion deficit for FY 2022 – an even greater reduction than for FY 2021. So as challenging as this year has been economically, we must anticipate at least two years of reductions. And while we hope for a speedy economic recovery and will continue to strongly advocate for federal relief funds and additional state funding, we must be responsible stewards of our finances and prepare for a multi-year economic downturn.

What Comes Next
In mid-to-late September, each organizational leader (principally deans and vice chancellors) will present their budget reduction strategies to the Budget Advisory Committee for additional feedback. Around that time the university should have more information about other factors that affect our budget such as fall quarter enrollment, federal relief funding, and UC-wide personnel actions. 

Who Makes the Decisions
Once the presentations have been completed, the provost and chancellor will make final decisions on specific budget reductions. Following this, deans, vice chancellors, and organizational heads will be responsible for implementing their budget reduction strategies. The approach toward budget reduction may vary across campus organizations. The presentations to the Budget Advisory Committee will help ensure that one organization’s budget reduction strategy does not create unintended consequences for other organizations on campus.

Will Every Unit See the Same Budget Reduction 
No. While every unit will be asked to make plans for a range of cuts, ultimately the reductions will be differential. The specific reduction for each unit will be communicated to organizational heads by the provost after the presentations to the Budget Advisory Committee have been completed.

There is no way to sugarcoat the financial realities that our campus, state, and nation face. The way the campus has come together and adapted to the COVID-19 pandemic keeps me confident in our ability to overcome these extraordinary financial challenges, make wise decisions on our priorities, and emerge well-positioned to continue UCR’s rise as one of the country’s great research universities.