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REGENTS MEETING

The Board of Regents meeting is scheduled Tuesday-Thursday (July 12-14) in the Community Center at UCSF Mission Bay. Click for the agenda and related documents.

Besides the UC budget and a new tuition increase for 2011-12, the agenda also includes the following:

• UC Accountability Report — Third annual report measuring campus and universitywide performance in meeting key goals across a wide range of areas.

• UC Retirement Plan Experience Study — In which an actuarial reviews the plan’s assumptions for possible updating.

In light of the study, UC President Mark G. Yudof is recommending a change in the plan’s mortality assumptions, reflecting longer life expectancies for UCRP members, as well as changes in other assumptions, including assumed age at retirement and disability incidence.

Based on the most recent actuarial valuation, the net financial impact of the proposed changes would boost the plan’s actuarial accrued liability by $1.77 billion, or 3.7 percent.

�ٺ���Ƶ is likely to escape further budget cuts in 2011-12, despite the state's decision last week to slash an additional $150 million in funding for the UC system.

But students are facing their second tuition increase of the new academic year: 9.6 percent, on top of the 8 percent that the Board of Regents approved in November and that took effect with this summer session.

For California resident undergraduates, as an example, the 8 percent increase pushed mandatory systemwide charges from $10,302 to $11,124 annually, and the newly proposed 9.6 percent increase, if approved by the regents next week, would push the charges to $12,192, starting in the fall.

The new total is almost twice the amount of five years ago, $6,141.

The tuition increases correspond with declining state support — with this year’s hit totaling $650 million. Together with $362.5 million in fixed-cost increases (for utilities, health care, retirement benefits and the like), the university system faces a budget shortfall in excess of $1 billion.

Early on in the state budget process this year, the Legislature and Gov. Jerry Brown signed off on a $500 million cut in UC funding for 2011-12 — leaving the system with a deficit of $862.5 million.

The 8 percent tuition increase covered about $116 million of that, while the UC Office of the President and the campuses took steps to cover the rest with new revenue (beyond the additional tuition), efficiencies and cuts.

Then, last week, when lawmakers and the governor reduced UC’s funding by an additional $150 million, UC officials said they had nowhere to go — except to students, for more tuition. “Campuses have informed the Office of the President that they are out of options for further cutbacks,” UCOP staff wrote in the agenda packet for next week’s regents meeting. See box for details.

The first cut, of $500 million, translated to a $73 million loss for �ٺ���Ƶ — 14.6 percent of the total reduction in UC funding. Fixed-cost increases of $34 million pushed �ٺ���Ƶ’ total shortfall to $107 million — and the academic and administrative units are now finishing up their budget plans to cover the deficit, according to a plan laid out by the chancellor and the provost.

The state’s second cut to UC, of $150 million, translates to an estimated $22 million loss for �ٺ���Ƶ, based on the same percentage.

But, with UC President Mark G. Yudof’s recommendation to fully offset the $150 million cut with a tuition increase, �ٺ���Ƶ does not expect to order any further budget reductions.

Note, however, that with the 9.6 percent tuition increase coming too late for summer session, UC would not bring in the full $150 million in the first year — leaving the university with about $10.4 million to make up.

Also, if state revenue does not meet projections in 2011-12, the university faces a midyear cut of $100 million.

Therefore, the university is considering a number of one-time funding strategies, including a drawdown as needed from the employee-retiree health care reserve.

Budget solutions for $1 billion shortfall

The tuition increases — the 8 percent already in effect and the 9.6 percent to be acted on next week — would cover about one-quarter of UC’s total budget shortfall of $1.01 billion in 2011-12.

The regents’ agenda packet outlines how the university is making up for the rest.

For example, the is “fundamentally changing the way the university does business,” contributing $500 million to the bottom line over five years. The Office of the President has already tallied a positive fiscal impact of nearly $160 million toward that goal, according to a progress report to be presented at next week’s regents meeting.

The Working Smarter Initiative takes in 30 projects around the system, including �ٺ���Ƶ’ Organizational Excellence and its shared service center project.

Also, the university is enrolling more non-California residents, who pay more in fees. “Campuses remain committed to enrolling California resident students first, consistent with the Master Plan (for Higher Education),” the agenda packet states. “However, campuses are equally committed to providing a high quality education, and nonresident students can help protect quality and add to diversity.”

Effective with summer session, mandatory systemwide charges for nonresident undergraduates went up to $34,002 annually, taking into account the 8 percent increase that the regents approved last November.

The new tuition increase of 9.6 percent would boost mandatory system charges for nonresident undergraduates to $35,070 annually.

According to , nonresidents account for 13.9 percent of all students — new freshmen and transfers — who submitted statements of intent to register, compared with 10.7 percent for fall 2010.

The increase is consistent with a recommendation of UC’s . Even so, the commission also recommended a 10 percent cap for nonresident undergraduate enrollment. Today, the figure is less than 6 percent, and UC expects the percentage will stay well under the 10 percent cap for the foreseeable future.

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