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Future Funding Strategies for the University of California Presented by Peter J. Taylor April 12, 2010. Table of Contents. The Budget Gap Commission on the Future Funding Strategies Workgroup: Develop advocacy campaign for state funding for UC

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Future Funding Strategies for the University of California Presented by Peter J. Taylor

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Future Funding Strategies for the

University of California

Presented by Peter J. Taylor

April 12, 2010


Table of Contents

  • The Budget Gap

  • Commission on the Future

  • Funding Strategies Workgroup:

    • Develop advocacy campaign for state funding for UC

    • Identify, promote, and adopt best practices in admin efficiencies

    • Revise ICR practice & policy for non‐federally funded research

    • Improve ICR rates with federal agencies

    • Develop multi‐year tuition plan

    • Increase nonresident enrollment

    • Advocate for federal Pell PLUS augmentation grants

    • Examine faculty compensation plans

    • Allow for possibility of differential tuition by campus


Section I: The Budget Gap


The University faces an ongoing budget challenge

$1,223.4

Gap Fillers

$1,223.4

Gap Causes


The State budget is not getting any better

  • According to the LAO:

  • There is no way CA can avoid reprioritizing its finances

  • Link between state funding and enrollment has been disrupted

  • Fees projected to continue rising

  • Federal funds provided only a one-time budget solution

Billions…

  • Key choices facing Legislature:

    • How much enrollment should be accommodated?

    • How much should higher-education cost?

    • How should the universities reduce operating costs?

…for at least the next five years


Section II: Commission on the Future


“Reimagining” the University

  • On July 16, 2009, Board of Regents Chairman Russell Gould announced UC Commission on the Future

  • The Commission was charged with developing a new vision for the University within context of UC’s mission and budget, and its commitment to quality, access, and affordability

  • Five workgroups were established:

Funding

Strategies

Education

&

Curriculum

Funding

Strategies

Size & Shape

of UC

Access

&

Affordability

Research

Strategies


Section III: Funding Strategies Workgroup


Funding

Strategies

Workgroup Submitted nine recommendations to the Commission on March 23:

  • Develop grassroots advocacy campaign

  • Implement a best practices system

  • Revise ICR practice/policy for non‐federally funded research

  • Improve ICR rates with federal agencies

  • Develop multi‐year tuition planning framework

  • Increase nonresident enrollment

  • Advocate federal Pell PLUS augmentation grants

  • Examine faculty compensation plans

  • Allow possibility of differential tuition by campus


#1: Develop grassroots advocacy campaign

  • Rationale:

    • Public institutions must have backing of those who pay taxes to support it

    • Activism is strongest at the local level

    • Political leaders can gain from a relationship with UC

  • Challenges:

    • Development of an adequate campaign infrastructure

    • Development of campaign messaging

    • Doing it the UC Way (not just another political campaign)

    • Internal constituencies need to be educated and “buy in” to the campaign


#2: Implement a best practices system

  • Rationale:

    • Administrative activity pervades any large organization, and especially complex public research universities

    • Our funding model may be misaligned with our efficiency goals

    • A penny saved is a penny earned

  • Challenges:

    • We must follow through this time

    • There is a time and place for campus autonomy

    • Cost-cutting cannot mean quality-cutting


#3: Revise ICR policy for non‐federally funded research

  • Rationale:

    • Total cost recovery is our principle

    • Core funds subsidize research

    • Significant revenue potential

  • Challenges:

    • State-funded research (it’s less than half that charged to federal)

    • Understanding among the faculty

    • Differing effects on different disciplines


#4: Improve ICR rates with federal agencies

  • Rationale:

    • Total cost recovery is our principle

    • Successful comparators have a dedicated negotiating team

    • Significant revenue potential

  • Challenges:

    • Multiple funding agencies involved (and huge disparities among them)

    • Understanding among the faculty

    • Tendency towards campus autonomy


#5: Develop multi‐year tuition planning framework

  • Rationale:

    • Creates an integrated planning framework

    • Change misleading nomenclature

    • Simultaneously maintain focus on state funding (and exhibit interconnectedness with the state)

    • Utilize market headroom

    • Increase predictability

  • Challenges:

    • Continue to pursue state funding

    • Enrollment and other impacts

    • Complex implementation

    • Avoid guarantee misunderstanding (and continue to address affordability)

    • Avoid Reg Fee misunderstanding


#6: Increase nonresident enrollment

  • Rationale:

    • Significant revenue generation

    • Positive impact on the state (and undergraduate experience)

    • Market headroom

    • Success at comparator institutions

  • Challenges:

    • Recruiting infrastructure

    • Revenue potential limited by return-to-aid

    • Perception issues

    • Protecting racial diversity


#7: Advocate federal Pell PLUS augmentation grants

  • Rationale:

    • Preservation of quality

    • Graduation rate component

    • Core operations precedent

    • Combat economic stratification

  • Challenges:

    • Identifying available federal funds

    • Feasibility

    • Avoid a program that is too self-serving (aim for true “Race to the Top” type program for all of higher education)


#8: Examine faculty compensation plans

  • Rationale:

    • Existing precedent

    • Use of non-core funding

    • More extensive use of contract and grant funds

    • Would augment/replace core funds for instruction

  • Challenges:

    • Equity issues among disciplines

    • Cultural shift

    • Faculty resistance


#9: Allow possibility of differential tuition by campus

  • Rationale:

    • Increase revenue capacity

    • Existing cost differentiation

    • Precedent in other states

    • Discounts rather than add-ons

  • Challenges:

    • Perception issues

    • Inclination to move to the maximum

    • Integrate with resource allocation efforts


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