AFSCME's rebuttal and UCOP's priorities

AFSCME, the union representing public eployees at the State, County, and City level, has replied to UCOP off-handed dismissal of their alternative budget proposals. While AFSCME's proposals might have been, in part, somewhat unrealistic (e.g., it's clear that the idea of cutting senior managment's salaries by 25%, no matter how attractive it might appear to us, was not going to fly), they made some interesting points that were well worthy of discussion, especially when UCOP's itself had solicited the unions for proposals that would achieve the same level of savings.

ASFSCME's rebuttal contains one new piece of information, which sheds further light on the way UCOP has decided to run its finances. We had already commented on the financial scheme by which UC would borrow $200M on behalf of the State against its own assets, only to lend it, in turn, to the State to finance capital construction projects around the campuses (mostly at the medical centers, one would assume).

We now learn from AFSCME that while the State will take over 3 years to repay UC, the University will have to repay that loan short term, within nine months, as is the case for all instances of commercial paper. This means that UC can find an extra $200M in its budget over the next nine months.  The question poses itself: was this the best way to use those $200M?

If UCOP had instead decided to put those $200M towards the budget shortfall, that would have been tantamount to slowing down capital projects in times of financial hardships. What's wrong with that?

We also take time to notice a piece of news that does not appear to have received a lot of attention, but is also indicative of UCOP's budget priorities: as reported by the Sac Bee, UCOP has just decided to add one more lobbyist, Vince Stewart,  to its Sacramento outfit, at a annual salary of $120K (before the furloughs). Previously, Stewart was the Schwarzenegger's deputy secretary of higher education.

That UC maintains lobbying offices both in Sacramento and Washington, DC is a little known fact. Payroll for the Sacramento office: $859K; for the Washington, DC office:  $741K, for a total of a cool $1.6M.

This might be perhaps a worthwhile endeavor if the lobbyists were employed to reverse the de-funding
of the University. Instead, they have been active lately to kill legislature to bring whistle-blower protection to the UC and impose salary caps for senior management. (The former lobbying effort failed, the latter succeeded only partially, for the record.)

Mark Yudof: the big man on campus

On the day of the faculty walk-out UC Pres. Mark Yudof is being interviewed by the New York Times about the recent tuition hikes and the budget shortfall. What better venue to address the issues at hand while at the same time put forward the President's vision for the future of the University? Instead, President Yudof decides  to use the NY Times interview in order to:

1. Defend his compensation package;
2. Deflect blame from California Governor Schwarzenegger for the sorry state of UC's finances;
3. Justify his housing allowance.
   

It might appear that it is true of Yudof as well what Abba Eban used to say of Yasser Arafat — that he would never miss an opportunity to miss an opportunity.

There is however one revealing bit in the interview. Asked whether he blames Gov. Schwarzenegger for UC's troubles, Yudof responds:

I do not. This is a long-term secular trend across the entire country. Higher education is being squeezed out. It’s systemic. We have an aging population nationally. We have a lot of concern, as we should, with health care.

This is a long-running theme for Yudof, already rehearsed in his 2002 Chronicle piece:  the trend towards de-funding public universities is mainly due to demographics and is therefore here to stay: an aging American population is more interested in health care than education.

Although President Yudof's premises might be questionable,  his strategy is coherent, if poorly executed. The Pitts memos were definitely a tactical blunder (without them there would have been a much smaller action on Sept. 24, or perhaps none at all), as is this NYT interview, which can only aggravate Yudof's image problems. UCOP's tactical carelessness is probably due to the conviction that UC senior management have exclusive access to the truth (they'd better, given their compensation packages), and anybody who questions UCOP's wisdom must be in bad faith. The same kind of hubris is behind the following snippet:

What do you think of the idea that no administrator at a state university needs to earn more than the president of the United States, $400,000?
Will you throw in Air Force One and the White House?

 The man is aiming high, which might be good news for the University, if not for the country.

From the walkout

A letter to my students

As you no doubt know by now, our first day of classes, Thursday Sept. 24 (tomorrow) has been designated a day of protest by UC students, faculty and staff. A number of staff unions will be striking against the University's handling of the budget crisis, and many faculty have indicated that they will participate in a "walkout" for the same purpose. UCSA, the UC Students' Association has endorsed the walkout, as have a a group of graduate students.

No doubt, the University's handling of the current crisis leaves much to be desired. While the ultimate cause of the dire situation of UC must be traced back to the State's failure to live up to its commitments to higher education in California, it must also be noted that it is too easy to address the present crisis by hiking up  student fees, cutting faculty salary and laying off staff. If in addition one considers the lack of transparency that has characterized the Administration's dealings with its employees, the students, their families, and the public at large, one begins to understand why many people on campus feel that they must make their voices heard.

With the latest fee increases, students are now the primary source of revenue for UC. This means, among other things, that this is, now more than ever, your university. If you don't like the way the University of California is increasingly hollowed as a public institution and turned into a corporate entity, if you want to restore the University's mission of providing a high-quality education to every qualified student in California — you have the power to bring about those changes.

Administrative rot

We have already commented on the administrative bloat at the University of California, for instance the fact  that admistrative positions in the $200K/year and above range doubled between 2006 and 2008. But sometimes adminstrative bloat rises to the level of administrative rot. Here is a story worth telling, all of whose pieces mentioned below are available in the public domain, but perhaps more can be uncovered with some more thorough digging (FIA, anybody?).

Once upon a time, there was an incredibly weathy, impeccably managed, multi-billion-dollar pension fund. This was, of course,  the UCRP, which provides the defined benefit plan for all UC employees, and the person who had been managing it for a long time was Patricia Small. Armed with a BA in Economics from Marymount, Patricia Small had served as the Treasurer of the Regents for many years, managing $58 billion's worth of assets, and ensuring stellar returns for the UCRP fund, year in and year out. Working out of her office at UCOP, she managed the UCRP funds based on a simple but effective strategy: invest in long-term bonds, which are more appropriate for the defined benefit nature of the plan, and in stock from a small number (65 to 80) of companies, and all of this with a small in-house staff and at a minimal cost to the University. The strategies had been so successful that UCRP started requiring no contributions from employees beginning in the early 1990's until, well, next April.

As one might expect, the prospect of untapped millions of dollars in potential brokerage fees sent investment managment firms salivating all across the great State of California.

Enter Gerry Parsky who was, at the time, Chairman of the Board of Regents (he was also at some point an official in Nixon's treasury department, a real estate, junk bond and venture capital investor, as well Chair of G.W. Bush's 2000 and 2004 California Presidential campaigns; Parsky is also the Chair of Schwarzenegger's Commission on the 21st Century Economy whose highly regressive proposal for tax overhaul has just been released).

In 1999, Parsky spearheaded the Regents' effort to remake UCRP's investment philosophy. They contracted Wilshire Asociates (at a cost to the University of $350,000) to analyze UC's investments and recommend changes. By pure happenstance, in July 2000 space tourist Dennis Tito, Wilshire's CEO and Chairman contributes $80,000 to G.W. Bush's California campaign.

Not surprisingly, Wilshire found the UC strategy "risky" and recommended that UC disinvest in long-term bonds to invest in domestic stock index funds. When Patricia Small objected to these changes, she found herself blackballed by the Regents and effectively forced to resign. Three days after her resignation letter, the Regents appointed — surprise! — Wilshire to implement the changes.

As a result, by 2002 UC was paying millions  to external fund managers to oversee the University's stock portfolio. This led to a decline in profits, partly because of the cost, but partly also because of some stupid and risky choices (such as riding Enron stock all the way down from $140.00 to $0.07 at a $145M loss to UC). Wilshire was subsequently awarded a contract to serve as general pension consultant ($1.3M over 3 years),. It was during this period that the Regents instituted the Treasurer's Annual Incentive Plan (AIP), which awards up to 150% of base salary for exceptional performance, as determined by the Regent's consultants. Wilshire was later involved in the fast-trading scandal  and they were finally dropped in 2004 favor of Richards & Tierney (now Nuveen), which in 2008 was in turn replaced by Mercer Investment Consulting. This is the first part of the story: details can be found in an East Bay Express article from which much of the above information is derived, as well as Charles Schwartz' exemplary and thorough treatment.

But let's go back to Patricia Small's position as Treasurer of the Regents. After she resigned, the position went to DeWitt F. Bowman (former chief investment officer for the California Public Employees Retirement System) on an interim basis, and then to David H. Russ, who was hired in 2001 at a salary of $275K, which rose to $325K (gross pay) by the time he retired in 2006. David Russ was succeeded in the position by Marie N. Berggren, the current Treasurer and CIO. And this is where things get a little strange: Berggren was hired at an initial base salary of $375K, which however rose to $470K by 2008, with extra pay of $340K for total compensation of $810K.

Why did Berggren's compensation almost double between 2006 and 2008? Was it because of the stellar performance of UCRP funds (which led to the resumption of employee contributions?) Was it because of her participation in the the UC Treasurer's Office Incentive Plan?

One wrinkle in all this is the potential conflict of interest involving Mercer: as evidenced here, the firm acts both as consultant as regards the Treasurer's Annual Incentive Plan (AIP) and as general investment consultant. It seems likely that Berggren's outlandish raises were recommended by the very same firm that was later hired to oversee the University's investments. Note that Mercer's appointment in this latter capacity was enacted in a closed meeting of the Regents in September 2008, at which the newly appointed President Yudof was also present. One wonders, how long did it take Yudof to smell the stench and decide to along with it?

LA Times advocates extending furloughs into 2010-11

In an unsigned editorial, the LA Times laments the effects of the proposed fee hike on UC students and their families. The University runs the risk of losing the best middle-class students to private institutions offering more and more purely merit-based financial aid (which benefits the middle class), especially at a time when UC fees are within sight of tuition at private colleges and universities. It is true that a large part of the fee increase is slated for return-to-aid, but that only exacerbates the fact that middle class students are "taxed" in favor of lower-income families.

As one of the measures the LA Times proposes to address the situation, the Board of Regents

should closely examine Yudof's desire to end work furloughs after this academic year. We understand that most UC faculty work for modest salaries and can ill afford pay cuts, but we also are not convinced that they would leave in droves if furloughs of a few days a year were extended into 2010-11.

It's difficult to enumerate the ways in which this just a stupid idea. But one leaps to the front, namely the odd logic of the claim that economic pressure would lead the "best and the brightest" among UC students to move to private institutions, but not — inexplicably — the best and the brightest among the UC faculty. (By comparison, look at this also unsigned, but more constructive piece by the SF Chronicle.)

It might be true that faculty would not leave "in droves," but the most respected faculty most certainly would — those who bring in much needed research grants and those who can boost a program's rankings with their teaching, service and research.

It is true that the middle class is getting a raw deal, but the answer is not to pit the faculty against the students, or lower-income families against middle-class students. The only way to save the University of California is through politcal action to change the State's funding process and priorities. It takes a lot of effort to build up excellence, but only a little to destroy it.

Students voting with their feet

The SJ Mercury News reported of a rising trickle of California students looking for an education away from the Golden State. Many take advantage of the Western Undregraduate Exchange run out of the University of Colorado, a program which allows students from the Western States to enroll at reduced (out-of-state) tution at a number of institutions outside their state of residence. But many students just plain look for an education elsewhere: the article quotes admission officers from Duke to University of Washington seeing the largest number of California applicants ever.  (Oregon apparently does not take California applicants throught the WUE program for fear of being swamped.)

With the increased fees on their way to Regental approval, we can only expect the numbers to grow. When out-of-state tuition at a respectable institution is lower than in-state fees at UC, the incentives to look elsewhere become pretty strong, especially combined with lower costs for room and board. The trickle of students looking elsewhere might even turn into a rushing river if, as some predict, higher education will be the next bubble to burst. 

UCOP's and the Regents' strategy of making up for lost state revenue by raising fees might hit diminishing marginal returns if it drives more and more students out of UC. For each students who elects to attend school out of state, not only does UC lose the fees the student would have paid, it would also lose the (ever decreasing) FTE money handed down from the state.

Yudof's address to the Regents

The UC Regents met yesterday, Sept. 16, to discuss the proposed increase in fees for undergraduate students at the University. After a bit of bru-ha-ha, the meeting could get down to business, beginning with Yudof's address to the Regents (the videos can be found here, here and here).

This was a passionate plea by Yudof to the Regents, and again one that is worth a close look for the information it provides on the direction where the University is headed. Yudof began by painting a rather bleak picture: the worst is far from over, the state budget will not improve next year, federal stimulus money will go away, all the while the university has to deal with an "unreliable partner," viz., a "dysfunctional state government."

Having thus described the situation, Yudof then proceeded to articulate his argument, whose first premise is that we shold give up "faith-based budgeting," i.e., coping with the present situation hoping that things will get better. Things will not get better, the State will not provide more money for the University (for a number of complex but well known reasons). We have to face the "unhappy truths;" we can, and should go to Sacramento for more money, but we should be aware that the State has no more money to give.

The second premise of Yudof's argument is that "mediocrity is the greatest enemy of the UC." We must do everything we can to preserve quality. From these two premises it follows that we must increase our reliance on the only other source of revenue that is available to the University, and increase student fees. Students must realize that the State "stopped building freeways to higher education" and is now "building toll-roads."

This is the main argument. Are there alternative solutions? Yudof does not think so: he denied that there were administrative raises, denied that there were "unrestricted" or "reserve" funds in the budget (and even if there were, say at the Medical Centers — and he's not saying there are —it would "wrong" and perhaps "illegal" to use them), blamed the union's (and especially AFSCME's) unwillingness to negotiate for the layoffs.

The fee increases are necassary, according to Yudof, in order to "stop the decline of the academic program" at the University, prevent a brain drain at the UC, and "do away with the furloughs" as of next summer (a connection that has the added benefit. obviously, to divide the faculty and the students).

Pres. Yudof ended reminding the Regents of the Blue and Gold Program, allowing any student whose family earns less than $60K to attend UC for free, the fact that 30% of the increase returns to aid, and the very high proportion of student on Pell Grants, the highest of any research university.

Yudof's vision is clear and, if we accept the two main premises of his argument, his plan is rational and compelling. The details of his plan have, of course, been poorly executed, but that is a different story. The Pitts memos, for instance, were blunders of historic proportions: if UCOP had received the Senate's recommendations we would not probably be here considering an unprecedented faculty walkout on the first day of classes, and in fact nobody would be surprised if Larry Pitts were at some point scapegoated for this. The administrative raises, that were (contrary to Yudof's claims) real and documented, were very bad optics, even if inconsequential in the $20B budget of the University. And the decision to protect the revenue-generating units at UC, first and foremost the five Medical Centers, even it meant gutting the core campuses, could have probably been avoided or mitigated. But these are matters that concerns the implementation of plan, not the plan itself.

Yudof has been criticized as a "privitazer," but his views is not to turn UC into a private university, but into a true hybrid institution. As pointed out elsewhere on this blog, there are reasons to think that that goal might not be attainable, as hybrid istitutions are inherently unstable, but that is Yudof's vision. We can either accept that vision or reject at least one of Yudof's premises. Since preservation of quality at UC is a goal that we share, the only option on the table is to engage in political action to make sure that the State's priorities are reversed and its funding model radically altered. Not easy, but is there another way?

Graduate Student Stoppage

After UCSA's endorsement of the walkout, the Graduate Student Organizing Committee also calls for a stoppage in solidarity with the faculty walkout and the UPTE strike. GSOC calls for a suspension of graduate student teaching and official university business on September 24, pending satisfaction of the following demands:

1. No layoffs, furloughs or pay cuts for salaries under $40,000. This money can be generated through steeper pay cuts to UC’s top earners.
2. A complete rollback of fees to their 2008-09 level, and a permanent freeze on fee increases beyond the rate of inflation. Student fees can be offset by redirecting surpluses from the revenue-generating sectors of the university.
3. Full disclosure of the UC budget.

The hybrid model

As previously pointed out, with the new increases now being proposed to the Regents, student fees will soon be the single largest source of revenue for the University. This means that, for all practical purposes, the University of California is now officially a "hybrid" university, i.e., an institution that, as indicated (and in fact advocated) by Pres. Yudof already in 2002, combines aspects of both public and private universities. 

It is therefore not too early to try to assess how successful the hybrid model appears to be. Well, we know where we are: faculty and staff are subject to furloughs (which for many are straight-out salary reductions), students are being hit with mid-year fee increases, unit 18 lecturers are being laid off, programs are being cut if not eliminated altogether, and all this while revenue-generating units at UC rather than being asked to help support the core mission of the University are largely spared (through furlough exchange programs or other gimmicks). 

As it is becoming increasingly clear, the hybrid model is inherently unstable, and in fact there appears to be a "tipping point" that we have already reached: once most of the revenue for the University is obtained through student fees, a UC education becomes a private good, subject to market pressure and increasingly accordingly priced. The State then has fewer and fewer incentives to support higher education in California the way it originally did in virtue of its social fallout. At the same time, more and more students are priced out of a UC education, further eroding public support for UC. The result will be even  lower State appropriations, which will lead to even higher fees, reinforcing the cycle.

With fees over $10,000 the total cost a family has to shoulder to send a student to the University of California is around $25,000 a year. It's true, as has been pointed out, that this is still a bargain compared to the privates, but we are already within sight of the cost of tuition at least at some privates. For that amount of money, students will expect an education experience that is not too dissimilar from that which can be obtained at a private institution: smaller classes, better facilities, etc. Hence an incentive to even steeper fee increases, which will lead to diminished State support.

The conclusion seems to be that there is no such thing as a hybrid university, at least not for very long.

Once we reach the tipping point (and we can discuss exactly where that is located), the pressure mounts for a full-blown privatization of those bits and pieces of the university that already look like a private institution. Since different campuses can undergo this process at different rates, this might well eventually lead to the break up of the University. Already, and perhaps understandably, Berkeley is  doing all it can to mitigate the consequences of the budget crisis through a number of measures, at the same time looking for ways to pay for them (e.g., through increased out-of-state enrollment, which of course will lead to fewer State resources, reinforcing the privatization cycle).

It is quite possible that privatization is inevitable, and the model of the University of California as set out in the Master Plan is doomed. But it would have been nice to get here through some sort of public debate among the consitituencies of the University (students, their families, the faculty and staff, as well as UCOP, the Regents and the State). Instead, this process is being implemented form above, under the guise of adjusting to a "middle point" — the hybrid model — which cannot be an equilibrium for very long.

So who's footing the bill?

Based on Charles Schwartz insightful analysis, it is now clear who is the largest stakeholder in the University of California: the students (and their families).

Schwartz calculates that the University draws about $2.6B in general fund appropriations from the State, and that revenue from student fees brings in another $2.5B. But that was before the recent fee hikes. The hikes would cost each undergraduate student at UC an extra $2,500 a year. Similar fee increases are proposed for graduate and professional students. Since UC enrolls about 200,000 students altogether, we can estimate the extra revenue at about $500M, which puts the student fee revenue at about $3B.

As Schwartz points out, this fact has implication for UC governance that, if followed to their ultimate logical consequences, would affect the composition of the Board of Regents as well the general priorities of the University.

It is probably unlikely that we will see equal representation on the Boeard of Regents of students and State-appointed bureaucrats. Nonetheless, the students and their families are now by far the largest stakeholder in the University, and it's time for them to make their voice heard. It's their university after all, and if there is anything that they don't like about it, they have every right to set out to change it.

UCSA endorses Sept. 24 walkout

UCSA, the University of California Students Associations, which represents over 200,000 students in the UC system,  unanimously endorsed the Sept. 24 walkout.

This is particularly important since one of the arguments against the walkout is that it would impact the students, who would show up to empty classrooms on the first day of the quarter. The UC Davis Provost/EVC even allocated funds to make sure that this would not happen (supposedly to hire faculty replacements — am I the only one who finds this appalling?).

This argument is now pre-empted. It's important that faculty and students stand together, on the 24th or any other day, for "the continued defense of the future of public education in California."

Saturday morning round-up

Here are a few items of note this morning:

1. From the NY Times: California students return to bigger classes, at higher tuition.
2. From the LA Times: UC Regents settle a dozen fertility suits, at a combined cost (over time) of $24M. How come medical centers' profits are to stay with the medical centers whereas we all have to pay for their liabilities?
3. From the Schools Matter blog: 12,000 UC Profs to strike on Sept. 24.
4. From the Fresno State Collegian: Legislature dooms our future. Very well said, hats off to the Collegian staff.
   

UCOP's reply to AFSCME, linked above, is probably worth a closer look.

The second Pitts memo

UC Provost Lawrence Pitts has issued an "open letter" to the faculty, supposedly to explain the reasons behind the first Pitts memo.  As one can imagine, we approached the open letter with some trepidation, given that the original memo did not address any of the reasons behind such a divisive choice, and also because of the tantalizing tidbit found in the Powell-Simmons letter to the AAUP.

Needless to say, we were disappointed. The second Pitts memo only rehearses the argument that furloughs should not be taken on instructional days "because of the additional hardship it potentially would cause for our students."

In the meantime, UC Davis Provost/EVC Lavernia has announced in a letter to the Chairs that he is "prepared to provide departments with temporary support funds" to make sure that "students do not show up to an empty classroom."

Oh? Who knew that there was extra money floating around the University?

Academic Senate to AUUP: long live the Great Helmsman!

Chris Newfield just made available a letter that the new system-wide Academic Senate Chair Powell and Vice Chair Simmons have written to the AAUP (who had endorsed the proposed Sept 24 walkout). In their letter, Powell and Simmons claim that shared governance is alive and well at the University of California, and whoever thinks otherwise does not really understand what shared governance means. As my children would say: whatever.

Almost lost in the perfunctory mumbo-jumbo, though, is this pearl:

[Yudof] has indicated that the decision was necessary as part of his effort to insure that the faculty furloughs will not be continued into a second year. 

Oh? We are surprised, first of all, because there no such motivation in the now (in)famous Pitts memo, where UCOP was mostly concerned in laying down the law. But, second, the connection between the implementation of the furloughs and their continuation into a second year is one that UCOP has never bothered explaining to the faculty. This would, of course, be completely in keeping with the culture of secrecy and lack of budgetary transparency at UCOP, but another explanation is possible: there is no such discernible connection, and Powell and Simmons are just engaging in cognitive dissonance and  post factum rationalization.

"Hybridization" coming to a UC campus near you!

The UC Regents are scheduled to discuss a proposal that would implement a mid-year fee hike across the ten campuses, which would raise fees $2,514 over the next year, representing a total increase of 44% over 2008. One more step toward hybridization of the university.

Unit 18 lecturers not participating in furloughs

As reported by Bob Samuels:

The UC Office of the President has informed UC-AFT that Unit 18 lecturers will not be participating in the furlough plan.

This is probably not good news for the lecturers. Looks like UCOP is trying to achieve salary savings more directly through layoffs. Lecturers with less than 18 quarters of service (so-called "pre-6" lecturers) have very little protection under the contract, and can be laid off with little or no notice, but post-6 lecturers need a 12-month notice before they can be laid off. That's why 67 UCLA lecturers in Humanities and Social Sciences were all given letters to the effect that their contracts will not be renewed as of next summer. This was presented as a precautionary measure that the Administration had little intention to follow through —we are not so sure any more — now that the Administration can achieve salary savings and bust a union at the same time.

Mark Yudof on the "hybrid" university.

Back in 2002, when he was President of the University of Minnesota, Mark Yudof wrote a piece in the Chronicle of Higher Education (which can still be found here) describing the prospects for the development of a "hybrid" university system in the era of diminishing state support for public universities. It is a very compelling read, because it allows us a close look at the current UC President's thinking in the present fiscal crisis.

When Yudof refers to a "hybrid' system, he means a system of higher education that is "mixed" in that it  follows in part the traditional public model and in part the traditional private model. The current model of a public university comprises high support from the state budget accompanied by low tuition, at least for in-state students (to the point where in California in-state students pay no tuition, just a few thousand dollars here and there in "fees"). The hybrid university would have a more balanced source of funding —what this means in the present situation of low general fund appropriations from the state is that students would pay "dramatically" higher tuition (although perhaps not quite as high as at the privates) while state funding would remain about the same.

According to Yudof, diminished state support is already here, so we need to re-balance the other side of the equation and "dramatically" increase tuition for students. This is based on the idea that higher education is more and more a private good, and that as such those who stand to reap its benefits should pay for it. There is nothing new here, in many ways this is what here in California was already envisaged in  the 2004 "higher Education compact" between UC and the Governor.

But there is more in Yudof'a article than just this re-balancing of funding sources. First of all, Yudof points to the causes behind diminished public support, and second he describes the effects that such a funding shift would have on the internal functioning of the university. These are important aspects that have not been sufficiently addressed.

Among the former, two factors would seem particularly relevant:

1. Demographics: as the US population gets older, resources are shifted from education to other areas of interest to seniros, such as health care and security.
2. Globalization: as multi-national corporations get less and less tied to a specific geographic location, they have less interest in developing a well-educated local workforce.
   

The combined effect of demographics and globalization is precisely the diminished support for public universities around the country. To the extent that these causes are at work in the present situation, there is not much that can be done to counterbalance them, and certainly nothing that UC faculty can do to reverse them.

Rather interesting, on the other hand, is Yudof's take on the internal effects of this funding shift. Fully embracing a market-oriented approach, Yudof points out that

As tuition pays more and state dollars pay less of the freight, accountability will shift more toward students and their needs and away from the priorities of legislators and other state leaders.

This means greater investment in those areas where there is greater demand for instruction (instruction, not research): business, pre-med, pre-law, social sciences, etc. Instruction in these areas will have to be "delivered" in the most efficient (i.e., cost-effective) possible way. This means "new partnerships with foundations, school districts, non-profit organizations, and corporations" and either eliminating or start charging fees for "outreach" activities that are not of immediate benefit to the "customers" (once referred to as students), such as free legal or medical clinics in low-income areas.

In this market-oriented institution, "cross-subsidizing," as Yudof refers to it (i.e., revenue sharing from, say, medical centers to humanities programs), will be subject to strict scrutiny and it will not occur as a matter of course. It will be limited to those cases where it will bring the university a very specific competitive advantage, for example in building a highly ranked humanities department at relatively little cost to boost the institution's ranking and attract more paying customers.

What has been described so far is no different from the mission of a private, market-driven institution. In fact, traditional private institutions of higher learning are arguably less market-oriented than the "hybrid" university described by Yudof.

There is of course the residual problem with this model that, especially in the case of the professional schools, even increased tuition will not be enough to cover actual costs. These are so expensive in fact that, as Yudof points out, no private medical school has been started in the US in the last 23 years.

So we already have a tension in the hybrid model, as Yudof himself acknowledges. But there is more: what about the "public" part of the hybrid model? What happened to it? Public universities, in particular land-grant institutions (such as UC) provide benefits to the state as a collective subject that go beyond those provided to the individuals. They train doctors and other professionals, and at the same time attract resources and stimulate growth. But if higher education really is a private good, there is no incentive for state legislatures across the country to pour resources into such hybrid institutions. There is no principled reason why, if growth is the goal, states should not deploy their resources (assuming they have any) into a direct stimulus as opposed to funding public institutions. Or,   if affordability and access are the goal, there is no reason why any such extra resources should not be distributed directly to students in the form of financial aid and other direct grants.

This is a challenge that Yudof acknowledges, but he fails to follow the logic wherever it may lead him. If we do follow the logic, the conclusion seems to be that the hybrid model is inherently unstable. Once funding is shifted from state appropriations to tuition, fees, and revenue-generating "partnerships," there is no longer any incentive for the state to step in and make sure that the university also delivers the public good besides the private one. In a slippery slope that is all too familiar, once emphasis is shifted to tuition, and absent widespread pressure to keep delivering the public good, states will feel all the more justified to cut the university loose.

There is no such thing as a "hybrid" university, or at least not for very long, anyways.

We should rather go back to the beginning of the analysis, the causes of the decline in public funding that were identified at the outset: demographics and globalization. Whatever else is true, and however irreversible these trends might be, California is perhaps in a somewhat better position than most other places. The state is still a hotbed of economic activity, and start-ups (supported by local venture capital) mostly rely on the local workforce, hence a need for the proper production of locally grown talent through affordable, high-quality institutions of higher education. Moreover, California's burgeoning immigrant population is mostly younger, tax-paying and child-bearing. These two factors combined constitute the basis for possible political action to restore adequate levels of public funding for higher education, along the lines laid down in the Master Plan. Perhaps ironically, far from being a burden on the state's finances, immigration might just save California.

So our best hope is not to give in to the myth of the hybrid university. At least here in California there are other options, and as long as we can represent and organize our own students' and their parents' needs and aspiration, there still might be a future for UC.

UCSDMC cuts $24M - without furloughs

In confirmation that UC's medical Centers will be spared employee furloughs, KPBS reports today that UCSD Medical Center implemented $24 in savings without furloughs or other salary cuts. The savings were achieved

by limiting overtime and not filling vacant positions ... many travel expenses [have been eliminated], and there have been some layoffs.

The layoffs are obviously bad news, but a great number of units across UC have had to deal with furlough and take the layoffs. More in general, this is another sign of the white-glove treatment received by revenue-generating units at UC (and also an implementation of UCOP's divide et impera policy). 

Results of no-confidence vote

Results of the no-confidence vote sponsored by UPTE have been delivered to UCOP.

UPTE's press release is here (PDF). Over 96% of those who voted chose to express no confidence in Yudof's leadership and UCOP in general. We don't know at this point how many people voted, but it is in any case a strong signal. According to the SF Chronicle, UCOP dismissed the results as a "publicity stunt." They are right, in that the vote is certainly non-binding: Yudof answers to the Regents and not to the employees of the University.

But the Regents should take notice that Pres. Yudof managed, in a mere fourteen months in office, to antagonize a vast portion of UC faculty and staff. This is no mean feat, probably unparalleled in the history of the University.

So here is a question for the Regents: is Yudof the best person to steer the University of California during these difficult times?

AAUP supports UC faculty collective action

In today's letter to UC faculty, the AAUP supports "calls for collective action — most recently a system-wide walkout of all UC faculty," pointing out that such collective action is direct consequence of UCOP's rejection (via the Pitts memo) of the Academic Senate recommendations. Here are some highlights:

The rejection of the faculty’s unanimous voice about implementing furloughs, through a vote of the Academic Council on July 29, 2009, is at best unwise and at worst dismissive of a cornerstone of the UC system’s strength, its faculty...

The principles of the American Association of University Professors hold that the managerial assertion of financial emergency powers does not justify failing to incorporate the full and meaningful participation of faculty in shared governance ...

For too many years university presidents have accepted and preached the pattern of public disinvestment as inevitable, advanced the privatization of public universities, and suggested that we can do more and more with less and less. By their actions, university presidents have advanced a model of academic capitalism that has compromised educational quality, and now that model is collapsing financially.

Collective action being considered at UC, in the form of walk-outs or teach-ins, is necessary to send a clear signal that cuts to the University are not painless and have consequences, the model of the university-as-factory nothwithsatnding. 

After SB and SC, the Davis division responds to the Pitts' memo

Although not quite as strongly worded, the Davis division of the Academic Senate also addresses the current issues and the implementation of the furlough plan in a letter from Chair Powell (Robert, not Harry) to President Yudof. Notable, though, is the request that UC take step to restore the Faculty Salary Plan.

Drinking the Kool-Aid

In letter released today System-wide Senate Chair Croughan and Vice-Chair Powell (together with high-ranking UCOP staff representatives) express disappointment for the way supporters of the "no-confidence" vote have

chosen to blame President Yudof for the University’s economic troubles, rather than recognizing all that he has done to help us overcome them.

Beside the obvious bad taste of having the Senate Chair and Vice Chair vouch for the UC President, this is probably a sign that the no-confidence campaign is effective, perhaps more than expected. A couple of things should be noted nonetheless:

1. Nobody is assigning Yudof exclusive responsibility for the University's troubles. There's plenty of blame to go around, at UCOP and in Sacramento.
2. But Yudof — along with senior management at UCOP —is responsible for the way the financial crisis has been handled: for the lack of transparency, for the egregious breach of shared governance conveyed by the Pitts memo, for almost doubling the number of senior administrators earning over $200K/year between 2006 and 2008 and the unjustified pay raises, as everybody else's salary is cut.
   

So this is not personal. But beside a fundamental disagreement over the what kind of public university we want in California, Yudof does share part of the blame for the current situation. A vote of no-confidence would send a strong signal that UC faculty and staff need to have a voice in the way the current situation is handled.

As to the signatories of the letter, they're either buying into UCOP's propaganda hook, line, and sinker, or they were under pressure to sign. Not sure which one is better.