12 December 2009

Charles Schwartz's new plan

It's clear that nobody has any idea as to how to go about addressing the University's financial problems. The State could not care less, the so-called "Commission on the Future" is little more than a joke, UCOP is proposing a dubious privatization strategy, which even (or especially) if faithfully implemented has little chance of saving UC as we know it, combined with healthy doses of wishful thinking (online instruction); and the Regents are too enmeshed in their own conflicts of interest to really give a hoot about the educational and research mission of the University.

Charles Schwartz is one of the few people who spent a long time thinking about UC's finances — and he has now announced a plan to change UC's funding model. Since this is perhaps the only concrete proposal to be floated so far, it is well worth thinking about. And in fact there is much to like about Schwartz' proposal.

Schwartz starts by analyzing the University's Instruction and Research budget (basically the entire state appropriation for UC) into its two components —a distinction that the University has purposely avoided in an effort to hide the extent to which student fees support research. These fees, acording to UC, cover only 30% of the I&R budget, but, Schwartz calculates, 100% of its "I" component. In other words, with the recent increases, students now completely cover the cost of undergraduate instruction.

Once the cost of undergraduate education is disaggregated from the I&R budget, Schwartz' plan comprises the following points:
  • The Regents shall declare as a matter of firm policy that mandatory fees for resident undergraduate students at UC shall never exceed the average per-student disaggregated cost of undergraduate education.
  • The State shall commit itself to providing UC with reliable funding for the remaining portion of I&R budget, that is, for the maintenance of the core research funding that is necessary to maintain the breadth and the quality of UC as a top ranking research university.
  • The UC administration must justify or eliminate $600 million/year of excess bureaucratic growth.
  • UC shall cap executive compensation, following a 1992 recommendation by the Berkeley faculty, at no more than twice the average compensation of Full Professors.
This looks like a good starting point, and many thanks to Prof. Schwartz for his work on behalf of UC and its public mission.

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