Today, the UC Board of Regents declared an extreme financial emergency and approved President Yudof's proposal for staff and faculty salary reductions effective September 1. This afternoon, President Yudof issued a letter to all UC employees, which may be viewed at www.universityofcalifornia.edu/budget/ .

The pay reduction will reduce the total amount we will need to cut from our 2009-2010 budget. Previously, we've estimated the savings from pay reductions to be in the range of $12 million; the actual amount will be determined once all implementation details have been worked out. President Yudof's letter provides additional context.

Additionally, we still need to make further significant cuts, in both permanent and one-time funds, from the 2009-2010 budget. And we need to anticipate the possibility of even deeper cuts in 2010-2011 and beyond. The magnitude and permanent nature of these cuts will have a major impact on UCSC now and in the future.

In the wake of the Regents' action, I want to update you on how we are developing a strategic plan to operate the campus with fewer resources.

This month, my office is holding three budget planning meetings with administrative officers, deans, key Academic Senate leaders, and student representatives. The first was held on July 7. Our key goal was to understand the size of the budget challenge and define timelines and a process for consultations regarding budget cuts in the context of our overall institutional goals and aspirations for the campus. We are working to create a budget-planning process within a flexible and consultative framework that considers every decision, including near-term ones, in the larger context of UCSC as an excellent, diverse research university with high-quality educational experiences.

The second budget retreat is scheduled for tomorrow, July 17, where we will consider an overall framework for the actions we must take, recognizing the need for urgency. At the final session, divisions will present possible scenarios to accommodate cuts, and we will discuss what consultations will need to take place before decisions are made to implement these scenarios.

In order to present more information about the budget situation and to answer your questions, two budget forums are scheduled to brief employees on the challenges we face and provide an opportunity for questions and discussion. A forum for staff will be Thursday, July 23, from 12:00 noon to 1:30 p.m. A session for academic employees will be Friday, July 31, from 2:00 to 3:30 p.m. Both will be held in the Media Theater.

In closing, I want to acknowledge the many comments and suggestions the Chancellor and I received after my last budget message. We will continue to communicate with you regularly so that you can understand the magnitude of these budget issues and provide insight and comments as we move forward. For the latest budget news go to www.ucsc.edu/budget_update.