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With draconian budget cuts already driving out top researchers at the University of California (UC), senior scientists are scrambling to find new revenue sources in the face of a university plan to impose unpaid leave and cut pay.

On 16 July the UC board of regents voted to empower university president Mark Yudof to force employees to take unpaid leave. The furloughs would range from 11 to 26 days and amount to salary cuts of 4–10%, intended to accommodate cuts in state funding. The university expects these cuts to total US$813 million, thanks to the state's $26-billion budget deficit. At press time, several faculty members were known to be leaving as a result (see Nature 460, 441; 2009). UC has 108,000 full-time employees.

Solutions, however, are hard to come by. According to Sandra Faber, chair of the astronomy department at the University of California, Santa Cruz, the university could accept more out-of-state students. “We have to cut loose from the state of California and come up with a new revenue model,” she says, pointing to the University of Michigan as a successful example of an institution that does not rely overwhelmingly on in-state students for tuition revenue: about a third of that university's undergraduates came from outside Michigan. Conversely, in the 2007–08 school year, 91% of UC students were from California, according to university website data.

George Blumenthal, chancellor of the University of California, Santa Cruz, suggests raising in-state student fees as a means of boosting revenue. “To the extent we are supported by the state, we have an obligation to provide access [to in-state students],” he says. “To the extent that support is drying up, we have to [change that model].”

Continuing with the current funding strategy for more than a year will imperil the reputation and calibre of UC, according to Faber. “The faculty will evaporate and the university will collapse,” she says. “The university has one year's grace period. After that, these [early- and mid-career] people will leave, and replacing them with people of the same calibre is hopeless. We will have lost our brand name.”

Despite the departures of faculty members, some say things could be worse. “Recruitment and retention would be more of a concern if the rest of the world weren't also in a terrible economic recession,” says Kevin Woolfork, budget policy coordinator at the California Postsecondary Education Commission, the planning and coordinating body for higher education in the state.

UC receives about $3 billion annually from the state and earns much of the rest of its revenue from its research grants and hospitals. Its total annual budget is about $19 billion, according to the university website.