Deficit Threatens Stability of University of California, Berkeley, Official Says

By ANEMONA HARTOCOLLIS

The chancellor of the University of California, Berkeley, said Wednesday that the university had a “substantial and growing” deficit that could threaten its long-term stability and that it needed to reduce expenses and raise revenues to maintain its position as a premier public institution.

The announcement comes against the backdrop of a long-running political dispute between Gov. Jerry Brown and Janet Napolitano, the president of the University of California, over funding for the university system. Much of the dispute has centered on how much tuition is appropriate for a public university to charge, and also on whether out-of-state and foreign students are squeezing out California residents, changing the mission of what a public university should be.

Last March, Ms. Napolitano announced a one-year cap for this school year on out-of-state and foreign students at the University of California, Los Angeles and Berkeley. About 25 percent of all Berkeley undergraduates this year are from other states and countries, up from 16 percent in 2011-12, the university said.

But Ms. Napolitano said at the time that the system needed more money, whether through state aid or tuition increases. Out-of-state and international students pay higher rates than California residents.

In a budget deal in May, Mr. Brown agreed to provide millions of dollars more to the university system, in exchange for a tuition freeze for in-state students until 2017-18. Out-of-state tuition was allowed to increase.

In Wednesday’s announcement, the chancellor, Nicholas B. Dirks, said he was forming a committee to develop proposals to address the $150 million deficit, or about 6 percent of Berkeley’s $2.4 billion budget, including looking at reducing staff, particularly in administration, and using online courses, real estate and branding to bring in new revenue.

Ms. Napolitano said in a statement on Wednesday that she supported the plan, while Mr. Brown declined to comment on it.