;$182.3 million is a lot of cash – it could buy a burrito for each of California’s 36.5 million residents – but the University hopes the Legislature will approve its full funding request this spring.
Every odd-numbered year, the University submits a budget request to the state. The state already gives the University about $620 million, but the University wants a raise.
The University outlines its plans for the money in the request, which includes everything from research and development initiatives to building costs and revamping security systems.
Although the biennial budget may seem like a big chunk of change, it only accounts for about 9.5 percent of the University system’s total operating costs, said Richard Pfutzenreuter, University chief financial officer.
State funding, Pfutzenreuter said, accounts for about 25 percent of the University’s yearly budget, so getting the full biennial request is key to University funding.
Millions of dollars, months of planning
The biennial request process starts in June of the year before the budget goes to the Legislature.
A team of University officials, including staff from the Office of Budget and Finance and the Office of the President, work together to construct a budget based on new investments and the basic needs of the University.
“Even though there’s always a desire to make new investments, there’s always the core needs of the University,” Pfutzenreuter said. Those needs include employee pay increases and utility bills, “things that aren’t very sexy but really important to the University.”
The biennial proposal is then officially presented to the Board of Regents in the fall. The board votes to approve the budget in a subsequent meeting.
By state law, the final proposal must be submitted to the governor by early December.
The biennial bankroll
Pfutzenreuter said this year’s budget was most heavily influenced by strategic positioning.
The biennial budget request can be divided into two large sections. One half involves the basic needs of the University, while the other involves new investments in several different research areas.
Under the first and largest part of the budget, $135.5 million goes to four areas of investment: faculty and staff wages, expanding educational initiatives like improving undergraduate writing, technology investments and building maintenance.
University President Bob Bruininks said this is a fundamental part of the biennial request.
“The way to think about it is, ‘What does it take to keep the University going?'” Bruininks said. “These are the core operations.”
The first involves competitive wage for the University faculty and staff, an area where Bruininks said the University is behind.
“We want to put some additional money on a subset of people who are in areas that are under a lot of pressure, competitive pressure from other places, where people are really trying to recruit our best people,” Bruininks said.
The second and smaller part involves four major areas of research and a total investment of $57.7 million.
The other areas include medical, science and engineering and environmental research and development.
Approving the request
Regents Vice Chairwoman Patricia Simmons said in order for the board to approve the biennial budget, it must “conform to supporting the priorities and the objectives” for the future of the University.
Before the budget is formed, Simmons said the president and chief financial officer will have reached an understanding of those shared priorities.
“Given the interchange we have with the president, it would be unusual not to see our priorities represented,” Simmons said. But, she said, the board would not hesitate to make suggestions if the budget didn’t meet the University’s priorities.
After it meets regent approval, the budget is sent to Gov. Tim Pawlenty’s office, where the governor makes his own recommendation based on the state budget.
Pawlenty approved $90.4 million this year, about half of the request.
While Pawlenty’s recommendation gives the University a “fair amount of money,” Bruininks said it’s still not enough to run the University and keep tuition increases to 4.5 percent.
“This is just round one,” Bruininks said. “We will go into the Legislature, where they will give us a chance to present our total case all over again.”
Bruininks said a 50 percent approval is a strong figure historically, but he is still concerned about keeping tuition hikes low.
“Our students and families have been through a lot in the last few years with the state’s recession and the severe budget cuts to the University,” he said. “We really want to work with the Legislature and the governor to keep the cost of higher education reasonable for students.”
Pawlenty spokesman Brian McClung said higher education is receiving the highest increase in funding percentage-wise of any category on the budget.
“The governor feels that an increase of this size, a double-digit increase, should be sufficient to allow the ‘U’ to rein-in tuition increases and get those back into a more reasonable range,” McClung said.
The next step
Once the final budget is determined by the Legislature, the regents approve any amendments, expenditures or tuition hikes.
In the event the University does not receive its full request, Simmons said the regents will do their best to remember the needs of the state when the budget is reworked.
“If we need to go back and take a look at our priorities because of the amount of funding that’s available, we will need to take into account what we’re hearing from our leadership in the state,” Simmons said. “The conversation is continuing; we’ll end up someplace.”