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Summer2002
Tough Times Tough Choices
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In California, where personal income-tax revenues suffered the sharpest one-year drop since World War II, the California Legislative Analyst's Office in May projected a $23.6-billion state shortfall for the coming fiscal year. California, along with 25 other states, has raided its "rainy day" fund and, like 16 other states, plans to tap its share of the national tobacco settlement to help make ends meet. Late last year, Gov. Gray Davis implemented a hiring freeze on non-essential state employees.

As part of his May Revision to the 2002-'03 budget, the governor proposed cuts in education. The University of California may see a $162-million reduction, leaving it with $3.2 billion from the state. Those cuts include: $32 million, or 10 percent, of funding from research programs; $29 million in a one-time cut from UC's $150-million budget for equipment, library materials, deferred maintenance and instructional technology; and $28 million from K-12 outreach efforts. The final budget plan will be the product of negotiations between the governor and State Legislature.

Many resources, however, were saved, such as capital expenditures for the four California Institutes of Science — which includes the UCLA-UC Santa Barbara California NanoSystems Institute — where funding was shifted from the General Fund to lease-revenue bonds.

"As a state institution, the University of California will participate in the actions that must be taken to balance the state's budget," UC President Richard C. Atkinson wrote in a budget update sent to all UC faculty and staff. "But we need to make every effort to do so in a way that preserves the quality of our institution."

Academic administrators are even more concerned about what will happen in 2003-'04. Conventional wisdom, according to UCLA Vice Chancellor for Finance and Budget Steven A. Olsen '77, says that Gov. Davis' budget reflects the impact of an election year, and that many cuts have been delayed. "But they can't put it off forever," Olsen says. "Next year, it's going to be tough."

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