California political leaders say the economic fallout from COVID-19 is expected to pose significant challenges to the state’s budget, including funding for the University of California.
Its impacts could be felt beyond the current 2020-21 fiscal year, said Gerry Bomotti, vice chancellor of Planning, Budget and Administration.
Gov. Gavin Newsom signed a budget June 29 after reaching a deal with state legislative leaders. The plan includes spending cuts, although the full impacts may not be known until later this fall.
Here’s what we know so far:
How has the coronavirus affected the state budget process?
Newsom’s January plan initially proposed an increase to UC’s core educational budget, which was $9.4 billion in 2019-20. It also included $25 million for the UCR School of Medicine.
That changed after the coronavirus began to affect the state economy in March. With a revised plan in May, Newsom proposed a 10% funding cut to UC of $370 million.
Following negotiations, Newsom and legislators reached a deal that includes $14 billion in total cuts that could be reversed if federal funds the state has requested as part of COVID-19 relief are provided by mid-October.
What is the immediate impact of the budget plan?
The deal reached by Newsom and legislators would cut UC funding by $260.8 million or 7%. The proposed cuts would be restored if the federal government provides additional COVID-19 relief to states by Oct. 15.
The budget does not outline the specific impacts to each campus, which will be determined by the UC Office of the President and the chancellors of each campus.
Fall quarter enrollment and state tax receipts, which will not be fully known until later this fall, are also factors that will determine UC’s finances.
Half of UCR’s core funding comes from the state with the other half from tuition fees, which the Board of Regents has agreed not to increase in the near future.
The California Legislature has indicated it may call a special budget session in August or September, depending on the state revenue outlook as more information becomes available.
How is UCR planning for the budget impacts?
In an email message Monday, Interim Provost and Executive Vice Chancellor Thomas Smith said deans and other unit heads are engaging faculty and staff members in budget reduction exercises. The Budget Advisory Committee is holding a series of town hall meetings to share information and gather input.
“Our focus is on protecting the unique features of UCR that make us a world-class university, including research, graduate training, undergraduate student success, and promoting upward social mobility for our students,” Smith said.
More information is available at rpb.ucr.edu/budget-reduction.
What is the budget impact to the UCR School of Medicine?
The budget deal includes the full $25 million in increased funding for expanded enrollment and operations the campus requested. The state had previously approved $100 million in funds for a new SOM education building.
How much of UCR’s budget comes from the state general fund?
UCR’s operating budget for 2019-20 is approximately $1 billion, about $575 million of which makes up the core budget for teaching and research operations. Of that, 44% comes from the state’s general fund, 50% from tuition paid by students, and about 6% from the extra payment from nonresident students.
