Dear Campus Community,
We write to provide an update on the annual budget process and campus planning over the next two years. The impact of the COVID pandemic and the ensuing budget crisis cannot be overstated. While the campus has built robust health and safety protocols to address the pandemic, we must be equipped to navigate our collective budget challenges, now and in the coming years.
We are grateful to campus organizations and units for preparing their proposed budget plans, during an already strained period. We further wish to recognize the data-driven analyses and recommendations provided by the Budget Advisory Committee (BAC), in their report on current financial challenges.
In response, we offer the following context and next steps for the campus:
- For FY21 alone, the campus originally estimated an 8.4% core budget shortfall, which is equivalent to approximately $42 million; and campus units have already initiated budgetary actions to address this reality. However, as outlined in the BAC report, the projected shortfall over the next two years is anticipated to be in the 16-20% range (when student financial aid expenditures are excluded); this represents $77 million at the lower end and nearing $100 million at the higher end. These permanent budget reductions will undoubtedly be challenging, and all parts of the university will endure significant hardship as a result.
- Given the above context, schools, colleges, and administrative units (e.g., information technology, research infrastructure, pre- and post-award grant support functions) that support campus priorities for graduate education, research, and student success for our highly diverse undergraduate population will still need to realize permanent budget reductions of approximately 9-13% over the next two years. The likelihood of fiscal restoration from the state is very low, so unit heads will be expected to demonstrate leadership in implementing strategic reductions that reimagine both the structure and operation of our research and teaching activities.
- Most central campus administrative units will likely need to implement permanent budget reductions of at least 15% (and possibly more) to help protect our core research and teaching functions from larger reductions. Of note, UCR is presently conducting a review of Intercollegiate Athletics in order to identify programmatic and budgetary options for the future, with recommendations expected in February 2021. Additionally, we are carefully reviewing the annual subsidy to the School of Medicine, following the state’s appropriation of $25 million; and return on investment for the university’s fundraising operation.
- In order to effect campus-wide budget reductions, all schools, colleges, and administrative units will need to first identify their core priorities, including opportunities for revenue generation in the future; and second, be ready to carefully scrutinize long-held assumptions about their operations, and be prepared to reduce or eliminate those programs or activities that no longer serve their area’s priorities. Unfortunately, this may mean sunsetting those programs that can no longer be supported, under the new fiscal realities or significantly reduced staffing. In short, strategic actions will need to occur across every part of the university.
- Interim Provost and Executive Vice Chancellor Tom Smith will work directly with Vice Chancellors, Deans, and other organizational leads to ensure budgets will be aligned with campus priorities and financial projections. More specifically, Interim Provost Smith will communicate budget reduction targets to relevant unit heads, by December 15th, 2020. With this information, all campus units should have their FY21 budget plans clearly defined and ready to begin implementing in January 2021. Up to half (50%) of reductions will need to be undertaken this fiscal year, with the remaining budgetary actions implemented in FY22 (pending further information from the state regarding the economic recovery).
- These budgetary reductions will take a significant toll upon our entire campus community, and in particular, among our very lean and already highly efficient staff. We acknowledge that any reduction in staff will have an impact on what we can reasonably accomplish and will potentially increase turnaround times. During this period, we expect each member of the community to be mindful of colleagues and continue to work towards providing a safe and supportive work environment for all. This year’s Campus Culture Task Force report provides important recommendations in this regard.
While the campus tackled enormous budgetary uncertainty during the Great Recession, UCR emerged demonstrably stronger as an institution. In planning for our post-pandemic future, we should remain committed to our shared mission and values, flexible in responding to a range of present and unforeseen challenges, and empathetic towards one another and ourselves as we persevere through the next few years together.
Sincerely,
Kim A. Wilcox,
Chancellor
Thomas M. Smith,
Interim Provost and Executive Vice Chancellor