"When everybody talks, the voice is louder."

By Lauren DeMello

   I interviewed Rich Lynch, Associate Vice Chancellor of the budget office. I attempted to gain an understanding of the overall issues regarding the state of California and the UC system, followed by a better understanding of the problems more specifically tailored to UC Irvine.

  Q: What is your position at UC Irvine?

A: Associate Vice Chancellor of the Budget Office

 Q: What is your job description?

A: Basically I manage the budget for UCI, the entire campus, operating budget, capital budget, and report directly to the Vice Chancellor for planning and budget and the executive Vice Chancellor for financial planning, strategic resource management.

 Q: How are UC schools funded by the state of California?

A: Well the state of California provides a portion of the funding for UC. The budget that they provide is primarily our core budget: faculty salaries, core administrative services, operation and maintenance of most of the buildings. But right now, the states component of UCI’s overall funding accounts for about 15 or 16 percent of our total funding. And that’s probably about the same as it is across the UC system. So we rely on the state heavily for our core funding.

 Q: So then, have we lost that entire 15 percent of support from the state?

A: No, that 15 percent a couple of years ago was probably closer to 20 percent. Just year to year, in ’07 and ’08, the UC fund state component was about $3.2 billion and now its closer to $2.6 billion. So we’ve lost about $800 million. In the last year or so.

 Q: But hasn’t state support been gradually decreasing since about the year 2000?

A: Sure, it has dramatically lowered. The state in the early years funded a much greater portion of UC’s budget. Going back to the 80’s, it was probably closer to 30 or 35 percent, in the 90’s it probably got into the 20’s, and into 2000 its been dipping down into the teens. Now we’re getting close to just over 10 percent.

 Q: Do you believe that the UC system could have foreseen potential budget issues arising based on the state’s skyrocketing deficit?

A: Not better than anyone else who could have predicted the world wide financial crisis. The most recent crisis came about very quickly. It’s not a state of California issue solely. Capital gains are down, unemployment is up, the stock market is way down, all those things impact state tax revenues.

 Q: Do you think that when the state of California comes out of this, UC will be receiving more funding or will it stay as is?

A: I don’t have any better crystal ball than anyone else. There has been a trend in the past several years for declining amount of support from state governments to public institutions. It’s not unique to California and it’s probably not something that will recover or change. I would hope that the state would fulfill their obligation and promise to the public institution in a better way in the future.

 Q: Could the state reductions of support be off set by the “unrestricted net assets?

A: No, not really. In fact, it’s a misnomer that they’re identified as unrestricted assets. The majority of the assets are not unrestricted at all. Most of those funds have a specific origin, a specific purpose, and restrictions on how they can be spent. For instance- student fees; if I have a balance of student fees, I can only use them for the purpose that those student fees were charged and gathered for. If I have housing revenues, certainly at the end of every year I hope that we do close with some balance of housing revenues because we have things like maintenance projects, we should have reserves for unforeseen circumstances. Those are two examples of what is included in what the public has come to categorize as unrestricted reserves. It would be inappropriate for the institution to take those types of reserves that are earmarked for specific purposes and use them to offset this furlough program and other activities that they weren’t intended for. Unrestricted reserves is an accounting term, it’s a way that accounting boards require things to be termed, but indeed they aren’t as unrestricted as a layman’s interpretation of that term would lead one to believe.

 Q: Why was a 5 percent pay cut necessary for top executives? Was it enough and did it do anything at all to help?

A: That’s the top senior management group’s participation in the pay cuts that every UC employee has taken. Depending on your income everyone is participating in either a pay-cut or furlough program.

 Q: From what I understand, UC Irvine has discretion of what cuts they make to who, when and why. Can you explain the process?

A: It’s a consultative process that’s led by the Executive Vice Chancellor provost. He consults with an academic counsel, the academic senate, the Chancellor’s cabinet, the staff assembly, and others across the campus, as he evaluates the priorities and the resource requirements of the campus. We have been meeting once a week throughout the year and will continue meeting until we come up with a plan.

 Q: Why do you think people are so upset by this, to the point that both faculty and students are walking and protesting?

A: The severity of the cuts in the last two years has hit everyone: faculty, staff, students, the community, our ability to deliver services to all sorts of constituencies. When everybody talks, the voice is louder. There have certainly been challenges and disappointments and it’s been more universal in the past two years than it has ever been before.

 Q: You’ve mentioned that the voices are louder when more people stand for a certain cause. In all honesty, do you think that these protests will be a catalyst for the change people are hoping to see?

A: I’m not sure what impact protesting has, to be perfectly honest. I think it is important and I think things are influenced by the more people that become involved in the process and that use the mechanisms that are in place to voice their concerns directly to Sacramento and their elected officials. And also to make their concerns apparent to the University of California leaders. I think the University of California has a record of responding to constituencies that it engages and participates with, and I do believe providing thoughtful and sincere information of how different constituencies are being affected to both UC leadership and to Sacramento and to Washington DC are very important.

 Q: So then, is it true that UC Irvine is losing some of its top professors to schools that will offer a more competitive salary?

A: Yeah, I’m sure that’s occurring. We lose some of our top professors in good years and in bad years. Certainly, we become more vulnerable if we are unable to be competitive.

 Q: What do you think the resolution is? Sum it up for me.

A: The resolution is going to be a combination of very difficult decisions that are going to involve students at this point. And it will be a shock of what they think student fee levels should be, in terms of how student fees are competitively across the nation. I think there are going to have to be some renewed commitments from the state of California. I also think that business in the community is probably going to have to participate to a greater degree. I think too that the University of California will have to continue doing, as we always have, to operate as efficiently as we can. Certainly, we don’t wake up in the morning and think of how we can waste more money. We are always trying to operate as efficiently as we can, but we’re going to have to get even better at that to be successful. The biggest part of the solution will have to come from something that the state produces in providing stability and reliability to the funding base that they are able to provide. The worst part of the situation that we have today is the uncertainty.