UC Santa Cruz is going through what administrators described as a “structural budget deficit.”

This information was released in a post on the campus website by Chancellor Cynthia Larive and Campus Provost and Executive Vice Chancellor Lori Kletzer on Feb. 12, titled “Update on the campus budget.”

“Our budget challenge right now is that we, on a very large share of our activities, are funded by core funds, and we are spending more core funds than we take in,” Kletzer said in an interview with City on a Hill Press. “That’s a budget deficit.”

Impacting Education

Some departments are already discussing potential repercussions from the deficit. The critical race and ethnic studies (CRES) department had a meeting on April 17 to discuss options regarding the potential restructuring of peer-to-peer classes in CRES. The courses that could be affected include (Un)Docu Studies, Black Radical University, and the Pilipinx Historical Dialogue. 

“We’re facing some budget cuts in CRES, so we do have to change some of the structure,” said Felicity Amaya Schaeffer, a professor in the feminist studies and CRES department, during the meeting. “We do not have funding anymore to be able to pay for graduate students, so we have to move the courses to [being] faculty-led.”

With few specifics publicly available, departments and student programs are uncertain what cuts will look like when implemented. Students and unionizers alike are asking for clarity about the future of their education.

“[The UC] like[s] any opportunity there is to cut back on the costs of labor and the amount of money being spent on instruction per student,” said Nate Edenhoffer, a politics TA  and a member of the organizing committee of United Auto Workers 2865. “Faculty, lecturers, staff, all the workers on campus, and students realize that the UC is setting these conditions to try to make these departments and different types of workers compete against each other — when what’s necessary is a united stance.”

Calls for Budget Transparency  

UCSC’s operating budget is divided between core funds and non-core funds. Core funds are primarily made up of tuition, and state general funds, while non-core funds are composed of grants, miscellaneous income, and student fees.

Core funds made up 51 percent of UCSC’s total operating budget for the Fiscal Year (FY) 2023-24. These funds carry out the university’s core mission of instruction, student aid, student services, research, and administration. 

UCSC Faculty Association (SCFA) co-chair Jessica Taft spoke on the university budget situation in an email interview with City on a Hill Press.

“Faculty, including the SCFA, would like to engage with the administration in meaningful discussion about the budget and budget priorities, but we can’t do that unless we have the necessary information,” Taft wrote. “For this reason, we have been calling for greater budget transparency, as well as for accessible and clear presentations of budget and spending data.”

Amid the budget announcements and updates, Vice Chancellor for Student Affairs and Success Akirah Bradley-Armstrong and Associate Vice Chancellor for Financial Affairs Biju Kamaleswaran were assigned to lead a task force to increase revenue.

The task force had its kickoff meeting on April 17. According to Lucy A. Rojas, Assistant Vice Chancellor and Chief of Staff, students on the task force will act as liaisons to the larger student community. 

When asked what avenues of revenue the task force would be considering to make up the deficit, Rojas provided no specific examples.

“The team is looking for opportunities to capitalize on UCSC’s strengths,” Rojas wrote in an email to City on a Hill Press. “Our approach involves gradual development over time, coupled with rigorous analysis of data and outcomes to ensure effectiveness.” 

Governor’s Budget Proposal

Another reason the chancellors announced a need for discretionary spending is Governor Gavin Newsom’s budget proposal for fiscal year 2024-25. Released Jan. 10, the proposal outlines objectives, monetary changes, and noteworthy issues the State of California would like addressed for the upcoming year. Its main effect on the UC system is a five percent deferral, a total of $227.8 million, from the General Fund. If the proposal passes, the General Funds that would have been applied to FY24 will be pushed to FY25 on top of an additional 5 percent increase, for a total of a 10 percent increase in FY25. 

“That’s not great fiscal policy given that the state is projected to have budget deficits into [future fiscal years],” said Ian Klein, senior fiscal policy analyst for the Legislative Analyst Office (LAO). “All this does is present issues in later years which the legislature would then need to address when the budget situation may be an even more dire situation.”

The adjustment is part of a Multi-Year Compact between the UC system and the governor in 2022. Per the compact, the governor is required to propose positive adjustments of five percent to UC state funding with each budget proposal.  

For fiscal year 2023-24 (FY23), UCSC reported in a budget planning document that state general funding amounted to $537 million, making up 49.9 percent of UCSC’s core funds. For FY24, the core funds are expected to be in a deficit of $96 million.

Though UCSC administration said they are looking to increase revenue, some departmental employees are worried who will be affected by cuts.

“Anytime they’re talking about budget cuts, they’re talking about budget cuts to workers,” Edenhoffer said. “They’re not talking about budget cuts to senior management, and they’re definitely not talking about budget cuts to spending on construction or real estate.”

Follow City on a Hill Press for ongoing coverage on UCSC’s budget deficit.