Friday, June 19, 2015
The Budget for 2015-16 in a Nutshell
The LAO summarizes the UC budget for 2015-6 as follows:
$3.2 Billion General Fund Support for UC. This is an increase of $241 million (8 percent) from 2014-15. Of this increase, $119 million is ongoing and $122 million is one time. The bulk of the ongoing funding is unallocated, but the budget includes various earmarks for the remaining funds. Specifically, the budget earmarks (1) $96 million (one time) to supplement payments made by UC toward its unfunded pension liability (this is counted as a Proposition 2 debt payment),* (2) $25 million (one time) for deferred maintenance (provided through a budget control section), (3) $6 million (ongoing) to support two UC centers on labor research and education, (4) $1 million (one time) for the Wildlife Health Center at the Davis campus to administer grants to local marine mammal stranding networks, (5) up to $1 million for UC to continue planning a medical school at the Merced campus, and (6) $770,000 (ongoing) for an elections database housed at the Berkeley campus. In addition, the budget specifies funding is available from UC’s base budget for the California DREAM Loan Program, though it does not designate a set dollar amount for this purpose.
Because revenue is now diverted to the rainy day fund under Prop 2, some adjustments have been made to the figures below for 2015-16 including adding back an "encumbrance" of $971 million:
Reserves at start of year: $4.0
Revenue and transfers
including received by
rainy day fund +$116.9
Reserves at end of year $5.5
As we have noted in prior posts, at the end of the year total reserves would be less than 5% of the budget which could be eaten up quickly in any kind of downturn.
*This blog has previously noted that the language in the budget is not in accord with the Committee of Two accord which promises a multi-year inflow into the UC pension. Instead, there is a one-time allocation only for the first year with language - unless it has been changed - saying there is no guarantee of future contributions. The quid pro quo for the multi-year deal was creating a Tier 3 in the pension with a cap that will require substantial reworking of the pension program. Without even the quid pro quo, it is very difficult to see how UC benefits. See http://uclafacultyassociation.blogspot.com/2015/06/unbalanced-pension-deal.html