University of California regents approve furlough plan

BERKELEY
July 16, 2009 12:04am

The University of California Board of Regents on Thursday approved systemwide furloughs as one of a set of actions to offset an anticipated $813 million reduction in support from the state general fund.

The board approved the plan with a 20-to-1 vote, with ex-officio Regent Lt. Gov. John Garamendi voting against it.

More than 108,000 full-time-equivalent positions out of a total of 135,000 are affected. Under the plan, UC faculty and staff will be required to take from 11 to 26 furlough days -- amounting to a salary reduction of 4 to 10 percent -- with higher earners being forced to take more furlough days and steeper pay cuts.

The specific number of furlough days each employee will take is based on a sliding scale based on pay, ranging from those who make under $40,000 to those who earn more than $240,000.

Reduced work days for members of UC's senior management group will be restricted to a maximum of 10 furlough days per year, even though their actual pay cuts will be among the highest, if the committee’s plan is adopted, as expected.

Additionally, senior managers who agreed to a voluntary 5 percent pay cut in May will have their salaries cut an additional 5 percent under the furlough program.

"Unfortunately, the university is facing a financial crisis unprecedented in the past quarter century, and everyone is going to be called on to be part of the solution,” says UC President Mark Yudof.

The overall goal of the plan is to achieve an estimated $184.1 million in payroll savings from general funds for the 12 months beginning Sept. 1.

The furlough plan will help UC fill approximately a quarter of a $813 million budget shortfall for fiscal years 2008-09 and 2009-10, the university says. The cuts represent a 20 percent decline in state funding for the university in 2009-10 when compared with the 2007-08 levels.

On top of actual state budget reductions, UC faces an additional gap of $335 million over the two-year period by virtue of increasing costs that have not been funded by the state, including increases in student enrollments, and health benefit and utility costs, among others.

Implementation of the plan for union-represented employees -- 35 to 40 percent of the UC workforce -- will be subject to collective bargaining agreements and all applicable laws.

In addition to the furlough savings, the overall budget gap will be filled as follows:

• A quarter of the $813 million gap will be filled in the form of a previously approved student fee increase.

• Through the refinancing of debt and further administrative cost controls, the university will gain another $100 million offset against the $813 million shortfall.

• The remainder of the gap to be closed -- $300 million in all -- will come from cuts spread across the university's 10 campuses. The specifics of those cuts will be left to individual chancellors.

Cost-cutting efforts already in place along with new savings efforts will result in fewer faculty, lecturers and staff, elimination of some courses and programs, larger class sizes and cuts to student services, UC says.

Most campuses are deferring at least 50 percent of planned faculty hires. Already, 724 campus staff members have been laid off systemwide, with more expected. In advance of these cuts, the UC Office of the President already had cut annual costs by $67 million and reduced payroll by one-third.

Although the furlough plan will affect the majority of faculty and staff in the UC system, the retirement benefits of all employees will be protected by using pre-furlough salaries to calculate pension benefits, the university says.

It will also provide “wide flexibility” for the campuses to manage the schedules of public safety employees such as police, fire and security personnel and clinical care workers at the medical centers and hospitals.