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Last week, at BATS, a colleague from a research lab was asking me what exactly is going on with the budget of the University of California. The conversation went like this:

“How much does the state contribute to the UC Budget?”

“About a third”

“And how much has the state contribution decreased this year”

“About 20%”

“So that’s about 6% of the total budget. How come they need to cut salaries by 8% and increase tuition by 32% in order to recover from a 6% budget cut?”

How come, indeed? Over the weekend I have tried to make sense of this question, but unfortunately it is very difficult to make sense of the UC budget, not to mention that the numbers in the 2008-09 budget document from the office of the president are quite different from the number in the 2008-09 audit.

Here is, however, what I have understood so far:
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