Chancellor: Cash-strapped UC Berkeley faces tough decisions

AP News
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Posted: Feb 10, 2016 5:25 PM

BERKELEY, Calif. (AP) — The University of California, Berkeley, is running a $150 million deficit this year and must undertake a top-to-bottom review of expenses if it hopes to sustain its national standing as a premier public institution, the school's chancellor warned Wednesday.

The university faces difficult decisions as it works to preserve its long-term financial footing, Chancellor Nicholas Dirks said. Consolidating academic departments, evaluating spending on athletics, shedding staff and admitting fewer doctoral students are some of the changes that will be considered, he said.

"We are fighting to maintain our excellence against those who might equate 'public' with mediocrity," Dirks wrote in a letter to the campus. "What we are engaged in here is a fundamental defense of the concept of the public university, a concept that we must reinvent in order to preserve."

Inadequate state funding and other factors have created "a substantial and growing structural deficit" at UC Berkeley, Dirks said. To address it, the chancellor said he was initiating a restructuring process aimed at cutting costs, increasing revenue and preserving the strongest programs.

A budget review prepared by Berkeley administrators blames the deficit, which represents 6 percent of the campus' $2.7 billion operating budget, on reduced state funding for instruction and construction, increased pension costs and five years without in-state tuition increases.

After a series of increases during the recession, tuition and fees for undergraduate students from California has remained $12,291 since the 2011-12 academic year. It is not expected to rise until 2017-18 under a deal UC President Janet Napolitano struck with Gov. Jerry Brown.

In response to a public outcry, Napolitano, who is a former U.S. secretary of Homeland Security and Arizona governor, also capped the percentage of higher-paying students from outside the state that Berkeley and UCLA could enroll.

Dirks' letter did not include many details on how the scope of Berkeley's academic and extracurricular offerings might change. On the academic side, the chancellor said some programs would be beefed up, while others would be given a narrower focus or rearranged to "ensure sufficient scale."

"We are committed to maintaining affordable access to an excellent education. But in order to do these things we recognize we must become not only more financial sustainable but self-reliant," he told reporters during a conference call Wednesday.

The campus will get input on the planning from faculty, staff, students and alumni, with some changes coming as soon as the summer and others requiring several years to implement, the chancellor said.

Along with looking at how the university spends money, the review Dirks has ordered also will appraise opportunities for the campus to bring in more revenue through licensing, donor-supported athletic scholarships and online courses, he said.

Even though revenues from Cal's athletic program are not keeping pace with its costs, cutting sports teams is not among the options under review. "It turns out that wouldn't be very helpful," Dirks said.

The administration expects to take five years to eliminate the deficit, Vice Provost Andrew Szeri said. Sixty percent would come from cost-savings and 40 percent from additional income, he said.