How bad is it? Bad, really bad - Part 8

From the Teresa Watanabe at the LA Times: The University of California was hit with $558 million in unanticipated costs in March alone due to the coronavirus, a staggering sum as students canceled housing and dining contracts, medical centers paused elective surgeries and campus costs soared for online learning. UC President Janet Napolitano detailed the grim financial picture in a letter Wednesday to Gov. Gavin Newsom and legislative leaders and asked them for more funding to help cover the unprecedented costs.

She noted that the public research university system was incurring added expenses and revenue losses in multiple areas, as health centers treated high-cost COVID-19 patients, researchers worked on potential cures and campuses sent most students home. UC also has pledged to avoid layoffs of most employees.

“As the world’s largest public research university system, UC is confronting many of the worst impacts of the virus all at once,” she wrote. More funding, she added, would “help UC provide students the education they were promised, treat our employees with fairness and provide our communities with compassionate care.”...

H.D. Palmer, a Department of Finance spokesman, said all requests for additional funding would be reviewed but that Newsom is preparing a May revision that is essentially flat and “could go further than that” — meaning budget cuts. The state could face a deficit of as much as $35 billion in the near future, legislative analyst Gabriel Petek said Thursday.

The impact on UC campuses could be particularly dire. Their unanticipated costs reached about $310 million in March — amounting to about 40% of $775 million monthly revenue in a system with an annual $9.3-billion core budget, according to Christopher Newfield, a UC Santa Barbara professor and systemwide budget expert. 

Without additional funding, students may face larger class sizes, reduced course offerings, more difficulty getting into needed classes and potentially higher tuition, said Michael Meranze, a UCLA historian who has long studied UC finances. A generation of scholars could be sidelined if UC lacks the funds to recruit them, jeopardizing the system’s renowned innovation and intellectual leadership, he said...

Full story at https://www.latimes.com/california/story/2020-04-16/uc-reeling-under-staggering-coronavirus-costs-the-worst-impacts-all-at-once

“If they are not reimbursed, the losses caused by the COVID-19 pandemic will be disastrous for the UC system,” Meranze said.

Caroline Siegel-Singh, a UC San Diego student leader, said hiring freezes, furloughs or layoffs in coming months would reduce staff for needed student services, such as financial aid assistance and mental health counseling.

“If campuses have to eat these cuts, the unfortunate reality is that it will lead to a serious degradation of the student experience at the university,” she said.

Varsha Sarveshwar, UC Student Assn. president, said that campuses “did the right thing” in allowing students to leave, reimbursing their housing and meal plan payments and purchasing laptops and Wi-Fi for those who needed them. She said UC should not be expected to pay the costs of that support alone.

Napolitano’s letter provided the first detailed look at the extraordinary financial impact of the pandemic on the 10-campus UC system, which educates 285,000 students and employs 227,000 faculty, researchers and staff. The recently enacted federal Coronavirus Aid, Relief, and Economic Security Act, known as CARES, will provide an estimated $437 million in aid to UC campuses and medical centers, Napolitano said, but that would not fully cover even a month of the extra costs...

According to Napolitano, unanticipated new costs and revenue losses include:

• $310 million for UC campuses for canceled housing and dining contracts, facility cleaning costs and transitioning to remote instruction. An expected $260 million in federal relief won’t cover the costs, Napolitano said.
• $248 million for UC’s health system, which includes $170 million in losses from cancellation of elective procedures. The system’s six academic health centers have treated more than 1,000 patients for COVID-19. But costs to prepare and outfit entire facilities for critical care initially cost between $1 million and $10 million per patient in the early weeks. The health centers expect to receive about $177 million in funding from the Department of Health and Human Services.
• Greater demand for financial aid as massive job losses have upended family economic stability. But $130 million in federal emergency financial aid grants that UC expects to receive should cover the additional needs for the next several academic terms, Napolitano wrote.

Full story at https://www.latimes.com/california/story/2020-04-16/uc-reeling-under-staggering-coronavirus-costs-the-worst-impacts-all-at-once

NOTE: As of 7 am this morning, yours truly was unable to locate a copy of the letter to the governor described above on the UC or UCOP websites.