Vice Chacellor Lavernia writes:
“In March, I assigned 2009-10 short term budget reduction targets to every academic and administrative unit with the goal of meeting the $39 million shortfall in state funds we knew about at the time. For the long term, a budget advisory committee and five subcommittees have been established to go over all aspects of university operations looking for strategic and fundamental changes that would generate savings from fiscal year 2010-11 onwards.
However, based on recent information from the Office of the President, the UC Davis Office of Resource Management and Planning advises that we must expect much higher state cuts this year, on top of the $39 million already anticipated by the reduction targets established in March. These cuts, in total, could exceed a 20 percent reduction in state general fund support for our campus. Getting through this crisis is going to require significant cuts, and nothing can be off the table.”
UC Davis is now looking into either furloughs or pay cuts along with the other UC’s.
“How much money could a furlough program save? Total operating expenses for UC Davis, including the UC Davis Health System, are $2.4 billion, of which salaries and wages are $1.4 billion. About one-third of this total comes from state general funds ($419 million).
Based on 2007-08 payroll figures, a furlough of six days a year across campus would cut wage costs by $23 million, including $10 million from general funds. A furlough of two days per month, 24 days per year—similar to that being imposed on many state employees—would save $92 million, $38 million from general funds.”
Meanwhile, Mark Yudof, himself along with other UC executives under seige for executive salaries and pay increases is now asking top UC executives to take a 5 percent pay cut.
The President writes:”In the light of the additional budget cuts the state announced last week, and the failure of the ballot measures, I believe we must consider additional measures. As I have said throughout this process, given the magnitude of the budget shortfall, all options need to be considered, and, unfortunately it is likely that every member of the UC community will be affected negatively.
Accordingly, as we have discussed, I am writing to inform you that I believe we must move forward with five percent pay cut for senior UC leaders—the President, all Executive and Senior Vice Presidents, the General Counsel and Vice President-Legal Affairs, all Chancellors, and all Executive Vice Chancellors.
This action follows our discussions of this issue, and I appreciate your collective and unanimous concurrence to voluntarily reduce your salary. These pay cuts will be effective for the 2009-2010 fiscal year, at the end of which they will be reviewed.
Admittedly, this action does not have a significant impact on our very serious budget deficit, given its magnitude and the fact that UC’s senior management group comprises only a very small fraction of university employees. Nonetheless, I believe a reduction in pay is only right, especially as we continue to consider possible furloughs and/or pay cuts for faculty and staff systemwide.”
Why only five percent? I ask this because students have already been asked to pay nearly 10% more in student fees. These executives are making, $200, $300, and upwards of $400,000 per year.
They are asking for staff to take six furlough days, a measure that would save roughly $23 million at the UC Davis campus alone. A few months ago, some number crunchers figured out a 20% pay cut to the top 400 executives would actually save about $24.4 million, not an insignificant number at this point. Five percent, a bit less so.
The proposed pay cuts for executves comes just three weeks after Senator Yee blasted UC for giving out a 12 percent pay hike for the new UCSF Chancellor and a 27 percent pay hike for incoming UC Davis Chancellor Linda Katehi. Five percent does little to even keep pace with the increase over last year.
As Senator Yee said on May 7, 2009:
“There is absolutely no justification for these bloated salaries. This is beyond arrogance. The Regents have again violated the public trust by lining the pockets of their executives and disregarding the taxpayer and all economic reality.”
According to a release from Senator Yee’s office:
Unlike many public contracts, the UC does not put these positions out to public bid nor do they attempt to find qualified individuals willing serve at a more reasonable salary. Unlike several labor union contracts, which stipulate that the salaries are contingent on state budget allocation, UC does not include such provisions in executive compensation agreements. UC justifies such excessive executive salaries by using a comparison study that includes private universities and only reflects base salaries and not the UC’s generous benefit packages.
Senator Yee had already introduced legislation to rein in executive pay at UC and CSU. SB 217, would prohibit pay raises for top executives in years in which the UC or CSU budget does not receive an increase in state funding.
“The UC and CSU seem committed to going down the same egregious path as AIG and other Wall Street corporations by providing for their top executives and ignoring everyone else. SB 217 will ensure that top execs are not living high on the hog, while the students are unfairly suffering.”
That legislation passed the Senate this week. Interestingly enough, Senator Lois Wolk, whose district includes UC Davis was one of only three Democrats to vote against that legislation. Likewise she was one of only two Democrats to not vote for a bill that would provide additional protections to whistleblowers who come forward to speak out against UC.
On Tuesday at noon on KDRT 95.7 FM (online at kdrt.org), Vanguard Radio will discuss these issues and more. Scheduled guests include Senator Leland Yee, AFSCME spokesperson Willie Pelote, and ACUSD Senator Talia MacMath. UC Davis and UC Office of the President have been invited but have declined to appear on the show. The show will re-run at the normal Vanguard Radio time slot of 6 pm on Wednesday (June 3).
—David M. Greenwald reporting