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Rebenching budget model to evenly allocate state funds per student to each UC campus

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This article is part of the Daily Bruin's Graduation Issue 2012 coverage. To view more multimedia, galleries, and columns, visit http://dailybruin.com/gradissue2012

By Devin Kelly

June 10, 2012 10:30 p.m.

An undergraduate at UC Santa Cruz or UC Riverside ends up being funded at a lower level than an undergraduate at UCLA after University of California administrators distribute money from the state across campuses.

The reason why is a bit of a mystery.

Years of funding imbalances, based on how quickly campuses have grown, have led to a system of differential state funding among University of California campuses. The disparities, UC and UC Academic Senate officials say, have raised questions about transparency and fairness.

Nathan Brostrom, the executive vice president of business operations in the UC Office of the President, said he became critical of how the Office of the President distributed state funds while serving as vice chancellor for administration at UC Berkeley.

“There was no real rational way of explaining how state funds were allocated,” Brostrom said.

Smaller UC campuses have been keenly sensitive to the variances in funding allocations, and calls to level the playing field have mounted. A year ago, Brostrom and Lawrence Pitts, provost and executive vice president for academic affairs, convened a task force to hammer out a new methodology for doling out state funds.

Under the current system, each campus receives a budget of state funds that amounts to an uneven level of funding per student across campuses. UCLA received close to $400 million in state funds this year, according to recent data provided by the UC Office of the President, in part to fund its health sciences operations.

By comparison, UC Riverside received $154 million and UC Santa Cruz received about $117 million.

What the task force has come up with is a new budget model known by faculty and administrators as “rebenching,” which will formally tie state funding to enrollment numbers. Under the new system, the amount of state general funds allocated for each California resident undergraduate will be the same, regardless of the campus. The model is currently expected to be implemented over a six-year period starting July 1.

Proponents say the effort sends a positive message at a time when state support is slipping and taxpayer support is increasingly crucial.

“If we want to make the state be a full partner again and restore UC’s funding, it’s imperative that the state understands what we’re doing with state money,” said Jim Chalfant, a member of the Rebenching Task Force and a professor of agricultural and resource economics at UC Davis.

UC San Francisco, which only enrolls graduate students, and UC Merced, currently too small to merit rebenching, will be treated separately under the new budget model.

Anticipated increases in state funding to the UC will be the source of rebenching money ““ the model will operate on a do-no-harm principle, and no cuts will be taking place, Brostrom said. While UCLA will not receive lower funding, Brostrom did acknowledge that the Los Angeles campus will not benefit from the reform as significantly as the smaller campuses.

The outcome of a vote on Gov. Jerry Brown’s tax initiative on the November ballot could throw a wrench in the gears of the rebenching process entirely, however. If Brown’s tax measure fails, the UC will be hit with a $250 million “trigger” cut.

It’s highly unclear what will happen if deeper cuts are imposed by the state, Brostrom said. He added that officials hope to implement the new model as quickly as possible.

Between now and November, the plan is to rally behind the positive message of funding all California undergraduates at the same level in an effort to show taxpayers how their money is being spent, Brostrom said.

“It’s the first step, but not the last step,” Brostrom said.

Negotiations are still underway to determine specific details. Funding health sciences or graduate students costs more than funding undergraduates, and the new system will need to account for the differences, Chalfant said.

UC officials also ultimately plan to incentivize campuses to maintain enrollment of California resident undergraduates through rebenching, Brostrom said.

Officials have described the new model as the second part of an ongoing systemwide budgetary reform effort. Last year, UC adopted a new set of principles governing non-state funds. Each campus now keeps the revenue it generates, including resident and nonresident tuition. The first step in reform addressed non-state funds, where rebenching addresses state general fund allocations, Chalfant said.

Susan Gillman, chair of the UC Santa Cruz Academic Senate and a member of the Rebenching Task Force, has spoken frequently about rebenching in speeches and written correspondence. Gillman said it is important for administrators to focus on the needs of the entire University system at a time when concerns have been raised about increasing fragmentation.

She pointed to an Academic Senate report stating that the “cost of a UC-quality education is the same on every campus, and the campuses should be funded accordingly.”

“It’s the most important single thing the UC can and will do now and into the future,” Gillman said.

The effort has so far been kept out of the public eye, however. No formal statement about rebenching has emerged from the Office of the President, to the dismay of some who have played a role in drafting the new policies.

On May 29, Bob Anderson, the chair of the Academic Council, sent a letter to UC President Mark Yudof urging the Office of the President to make the progress of the Task Force public.

Brostrom said the muted publicity is linked to the process of working through concerns that have been raised by different campuses.

“We’re really trying to work through all of the different permutations of all of us,” Brostrom said, adding that he hopes to release a statement “very soon.”

In a joint statement, Steve Olsen, the UCLA vice chancellor of finance, budget and capital programs, and Andrew Leuchter, chair of the UCLA Academic Senate, acknowledged their involvement but declined to discuss details about UCLA’s role in the process.

“The overriding objective is to ensure that any funding-allocation formula serves UCLA’s top priority of maintaining the highest quality academic programs for our students,” according to the statement.

The changes must first be approved by Yudof, who has discretion to alter details, such as the time frame, before the implementation process begins, Brostrom said. The final task force report on the topic is also pending.

_Contributing reports by Alexia Boyarsky, Bruin staff. _

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