Summer Update on State Budget

Dear Colleagues,

As you are no doubt aware, California Governor Edmund G. Brown Jr. signed the 2011-12 State Budget last week. This “honest but painful” budget made substantial cuts to statewide programs and reduced state spending by $15 billion. Although the $1.5 million cut to UC Hastings College of the Law proposed in January is now a certainty, I am relieved to report we’ve incurred no further reductions at this time. I’d like to update you on our current situation.

The enacted budget appropriates $6.9 million for UC Hastings. This represents 10% of our total budget or 12% of the instructional budget (excluding auxiliaries), and an 18% reduction from last year’s funding level. The $1.5 million dollar reduction has already been factored into our internal budget process using a combination of operating budget reduction (two-thirds of the reduction) and previously announced fee increases (one-third of the reduction).

The state budget is based on the recognition that California’s tax revenues have continued to increase as prospects for economic recovery begin to brighten. Assuming that this positive trend will continue, the enacted budget assumes the receipt of $4 billion in new revenue projected to be collected during the current fiscal year. If these revenues are not realized by December 2011, however, the budget bill authorizes the Department of Finance to make additional “trigger cuts” to maintain a balanced budget.

Changes to state funding affect all operations, ranging from student fees to operating budget allocations. At current levels of state support, base budgets can be maintained and further fee increases above the 4.8% previously announced for the 2011-12 academic year are not anticipated. Yet, if the “trigger cuts” are applied to UC Hastings’ state appropriation, mid-year fee increases (Spring semester 2012) would need to be considered. Should this come to pass, deferring such fee increases until the 2012-13 academic year will be our goal.

And so we have before us a continuing challenge. The State of California is relying on an economic recovery that is not certain, and the prospect of further reductions in state support must be acknowledged and made a key variable in financial planning. 

Fiscal responsibility continues to be an ongoing administrative emphasis, guided by strategic planning to improve our institution in a competitive marketplace. The paramount objective of all our efforts remains in assuring that UC Hastings not only maintains but also enhances our academic reputation within budget realities. Some observers may wonder whether it is advisable to be so candid about these issues, but I am convinced that our optimism must come from the mutual trust possible only when we face facts together.

It is important to emphasize that we are in a better position than so many schools throughout the nation. For that, I must thank you. The strength of this institution is demonstrated on a daily basis by the work of our dedicated faculty and staff, the quality of our exceptional students, and the support of our alumni. As a community, we will succeed.

I came here knowing we are compelled to reinvent legal education. We are doing so. As always, I will keep you informed and engaged in the days and months to come.

Sincerely,

Frank H. Wu

Chancellor & Dean