BC Budget 2013—Implications for UVic
The BC government tabled its 2013 budget in the legislature Feb. 19. The following are the implications for the University of Victoria:
- The $50 million cut in funding to the post-secondary system in Budget 2012 will now be applied over three years instead of the original two: $5 million in 2013/14, $20 million in 2014/15 and $25 million in 2015/16.
- The government's stated intention is that the $50 million cut will be covered by "savings" in the post-secondary education system over the next three years. This substantial amount will be difficult to achieve without affecting the quality of educational services to students given the budget reductions and unfunded cost pressures that universities have already been experiencing the last several years.
- UVic already has an ongoing structural deficit in its operating budget resulting from the annual cost of individual progression increases for faculty and staff that every year exceed the increase in tuition revenue allowed by government.
Salary increases are not covered by provincial government funding.
- This structural deficit, together with the contract settlements for faculty and staff, and the reduction in provincial government funding for the post-secondary sector, meant that all areas at UVic were asked to cut four per cent from their budgets, effective April 1, 2013.
- This four per cent reduction in area budgets will cover UVic's structural deficit as well as the cost of salary settlements in 2013/14 (with a built-in, but as yet untested assumption about the possible size of the arbitrated faculty salary increase).
In 2013/14, this should allow UVic to meet its statutory obligation to operate with a balanced budget.
- There are several more unknowns for 2014/15 and beyond. Further reductions in area budgets will be required at UVic next year depending on a variety of factors, including the faculty salary arbitration award, the reductions in provincial operating grants to universities, and settlements in upcoming negotiations for contracts which expire in 2014/15 at our university.
- On May 14 British Columbians will go to the polls to elect a new government. It means we can anticipate that a new government may present a revised budget after the election.
As a result, we need to continue our budget planning based on the financial assumptions that we have today.