These are sobering economic times, and UC Santa Cruz - like organizations throughout our state and nation - faces many difficult challenges. Last week, we received more information on immediate and longer-term budget reductions that our campus will be required to make - up to $28.7 million to account for reduced state funding and mandatory cost increases.

But for student fee increases already approved in May, these cuts would be even greater. If the salary reductions or furloughs proposed by the Office of the President last week are approved by the Regents, our 2009-2010 budget reduction will be lessened by an estimated $12.5 million - still requiring us to make additional cuts totaling slightly more than $16 million.

This is still a staggering amount, on top of $13 million in cuts already assigned for fiscal year 2009-10 and $10 million in one-time and permanent cuts made in FY 2008-09. It amounts to an approximately 20 percent cut over two years to the state-funded portion of the UCSC budget.

The magnitude of the cuts we as a campus must make requires that we think and act differently. Clearly, making these cuts will be a painful process and will require elimination and consolidation of programs, reductions in services, and an additional loss of personnel. We know the difficulty that layoffs will pose to some members of our campus community and their families, but additional layoffs seem unavoidable.

As of now, the Regents' decision to restart contributions to our retirement system beginning April 15, 2010 remains in effect, subject to collective bargaining with represented employees. Initially, there would be no impact on the net take-home pay of employees since the mandatory 2 percent contribution that most employees make to a defined contribution plan will be redirected to the UC Retirement Plan.

We are taking immediate steps to deal with this crisis. Campus senior management, Academic Senate leaders, and student representatives are discussing the magnitude of the budget shortfall and the cuts required. We are working to accumulate information, questions, and ideas for immediate short-term reductions that must be made while also actively weighing options for determining the ongoing permanent cuts.

The unprecedented nature of our fiscal challenges, and the very real chance that we will continue to see state support decline further, requires ever-greater flexibility, innovation and collaboration. We must make difficult yet strategic decisions about our future - what we want UCSC to be.

Some things - including the inevitability of the cuts we're now facing - are out of our hands as a campus community. Yet we can, and will, make decisions and take actions that enable us to continue to deliver the quality education and research that is our mission. This will require determination, vision, ingenuity, and, yes, additional sacrifice by us all. We thank you, sincerely, for your continued dedication and commitment.

We will share what we know when we know it and will update you regularly on our budget planning efforts as they take shape. Visit the campus budget web site (www.ucsc.edu/budget_update) for the latest information.