[Ucrfacultyandstaff] FY27 Budget Update

[UCR Provost]

Dear Colleagues,



With the State of California budget now finalized, we write to provide an
update on the University's permanent 2026-27 operating budget,
including the impact of state appropriations, tuition revenues, employee
compensation programs, and other significant fixed cost increases that will
shape campus financial planning for the coming year. While the final state
budget provides important clarity for this fiscal year, the campus
continues to evaluate its long-term financial position to ensure that
revenues are being spent in alignment with campus priorities.



*State Budget. *The 2026-27 budget provides the University of California
with $5.5 billion, reflecting a 7% increase ($350.6 million) in ongoing
base budget funding from the 2025-26 year as well as a 3% ongoing
restoration ($129.7 million) of the 2025-26 budget deferral.  UCOP modified
some aspects of its allocation methodology (e.g., eliminated some earmarks
that had previously supported campus initiatives) and postponed
implementation of other modifications (e.g., delayed by another year the
plan to change the weighting for undergraduates from under-resourced high
schools from 1.15 to 1.5). For UCR, the state allocation for 2026-27 is
$34.36 million greater than it was in 2025-26.



*Tuition Revenue. *Due to the cohort tuition increase for new students and
our growth in enrollment, tuition revenue to the campus is estimated to
increase by approximately $6.30 million. Of this amount, approximately
$1.75 million is available to cover new central campus expenses (see chart
below). The other $4.55 million goes directly to the instructional units
(schools and colleges) and to financial aid for students.



*Employee Salary Program.* As announced on June 29th
<https://insideucr.ucr.edu/announcements/2026/06/29/2026-2027-uc-riverside-salary-program>,
represented employees will receive negotiated salary increases, while
eligible non-represented staff and faculty will receive salary adjustments
of 4% consistent with the University's approved salary program for FY
2026-27. In addition, the campus provided a 3% increase to the faculty
off-scale component and above-scale salaries and a 1% equity adjustment for
eligible policy-covered staff.  Our total estimated costs for salary and
benefit increases are approximately $39.39 million for FY 2026-27. The
systemwide salary program and the additional amounts from the campus for
faculty and policy-covered staff represent an important investment in our
people, which remains a campus priority.



*Fixed Cost Increases.*  In addition to the increases in salaries and
benefits discussed above, there are significant inflationary increases in
fixed operating expenses, such as utilities and hazardous waste removal,
and other new costs, such as the operational expenses for the Undergraduate
Teaching and Learning Facility (UTLF) opening in Fall 2026. These
non-salary costs total approximately $3.78 million and are supported
through a combination of state appropriations, enrollment-related tuition
growth, and investment income.



*What does this all mean for the central campus budget? *As you can see
from the chart below, our net increase in expenditures exceeds our net
increase in revenues by approximately $6.67 million. To fill this gap, each
organization will cover 19% of their salary and benefit increases
(exclusive of faculty salary increases from merit and promotion
advancements); the central campus will cover the rest.


[image: image.png]


The financial challenges we face are similar to those at our sister UC
campuses and at other public universities around the country. Looking
ahead, we are working to strengthen our long-term financial position
through several initiatives already underway, including a review of our
Academic Budget Allocation model, refinement of the Campus Operating Model,
enhanced financial reporting and forecasting, and the identification of
organizational efficiencies to allow us to direct resources to our highest
strategic priorities. As we did in 2025-26, we will hold budget review
meetings in the winter at which each organization can present its financial
position and its strategic priorities to the chancellor and provost.



Thank you for your continued dedication to our mission and your careful
stewardship of our resources.



Sincerely,


*Elizabeth Watkins, PhD*

Provost and Executive Vice Chancellor



*Sandra H. Kim*Vice Chancellor and CFO
Finance and Administration
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://scotmail.ucr.edu/pipermail/ucrfacultyandstaff/attachments/20260728/439e276e/attachment-0001.htm>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image001.png
Type: image/png
Size: 8609 bytes
Desc: not available
URL: <https://scotmail.ucr.edu/pipermail/ucrfacultyandstaff/attachments/20260728/439e276e/attachment-0002.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image.png
Type: image/png
Size: 13373 bytes
Desc: not available
URL: <https://scotmail.ucr.edu/pipermail/ucrfacultyandstaff/attachments/20260728/439e276e/attachment-0003.png>