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UC decline

UCOP's recent memo to the Regents outlines the effects of years of ruthless cutting at the University of California (thanks to Bob Samuels for the pointer):  

• At UC Riverside, [students] will walk onto a campus where enrollment has grown in the last three years by nearly 3,000 students – many of them the first in their families ever to attend college – while at the same time the number of faculty has been reduced by five percent. The result: class sizes have grown by 33 percent. Introductory physics classes that used to average 95 students have exploded in size in three years to 573 students.   
• At UC Davis, students will find an acclaimed medical center that has eliminated all State supplemental support for clinical care. Just as the campus’ athletic program had begun to mature, four sports had to be eliminated to help meet the need to make $106.5 million in cuts in four years.
• At UC Santa Cruz, students will be provided with 84 fewer course offerings and their class sizes will have spiked 33 percent. The student-faculty ratio has exploded by nearly 15 percent, and the campus lacks funding for 125 faculty FTE – 14 percent of its faculty positions. Yet for all the cuts, the campus still faces a daunting $38 million budget gap.  
• UC Santa Barbara has over 1,000 more students than it did three years ago, but the number of staff has declined by 450 (nearly 11 percent) during that time, and the faculty has remained the same size. The results are fewer student services, larger classes and discussion sections, and reductions and eliminations in many programs.   
• And across the system, pension costs alone will rise to $1.8 billion annually in the next five years – an expense that campuses did not have to shoulder as recently as three years ago. If there is no increase in either State funds or tuition during this time, campuses will have to find the equivalent of funding for 7,000 staff or 3,900 faculty to fund this expense alone.
• At UC Berkeley, despite its more mature capacity to raise private funds and attract non- resident students, the campus forecasts that – even with stable fee increases – it could face at least a $200 million budget gap within six years due to exploding pension contribution costs.  

Similar conditions exist on every other UC campus – from UCLA and San Diego to Merced, Irvine and Santa Barbara. The University faces an unprecedented threat to academic quality.   While this is a welcome change from the fiction that the University can absorb whatever cuts the state throws at it, the memo engages in some measure of wishful thinking when outlining possible solutions to the current dire situation, from increased indirect cost recovery to private philanthropy. 

Perhaps the most promising avenue is the multi-year funding agreement with the state included in the Governor's latest budget. But the agreement is contingent on voters' approval of the Governor's "revenue-enhancing initiative" this fall, failure of which would result in another $200M mid-year cut. 

No clue

It looks like nobody really has any clue as to how to go about addressing the University's financial problems. As widely reported, UCOP came up with a scheme whereby tuition would rise by 16% a year for the next four years (which compounds to 81%) unless the State steps in with yearly funding increases of 8% for the next four years. As anybody can imagine, this is not likely to engender warm and fuzzy feelings towards UC in those that are left as UC's only constituency and potential supporters, viz. the students and their families. Supposedly preoccupied by the fall-out, the Regents have swiftly acted with typical Regental drive and determination – and formed a commission with the task of exploring private donations as a source of external funding. The idea behind such a bold undertaking is that UC has traditionally contributed to the economic successes of California by supplying a steady stream of skilled and educated labor. California business ought to be willing to contribute to the University's bottom line in order to secure such a competitive advantage in the future as well. What this line of thought seems to have missed, though, is that there does not appear to be any reason why big business would be willing to pay in California for resources it can get for free in Mumbai – testifying yet again to the wisdom of Clark Kerr's vision characterizing a public supported education as "bait to be dangled in front of industry, with drawing power greater than low taxes or cheap labor." Perhaps even more disheartening is the fact that in all this the faculty and their official representation, the Senate, is mostly notable for their silence.  

UC Disorientation Guide

Reclaim UC  carries a "disorientation Guide" for students entering UC this fall:

As you go from class to overcrowded class this fall, you’ll want to forget that tuition last year was around $1,800 less than you’re paying now. Continuing a 30-year trend, the UC Board of Regents gathered in cigar and gin-soaked boardrooms over the summer to raise our tuition by 17.6% and lay down plans for further increases in January, or maybe just raise tuition 81% over the next 4 years.

[...]

The UC Office of the President (UCOP) never tires of reminding us that tuition increases are the recession’s fault or scolding us that Californians are just unwilling to spend on education in hard times; this is a strange excuse though, since state funding has been decreasing while tuition has been skyrocketing since the early 1990s. [...] As it happens, in 9 of the past 10 years tuition was raised – well before the 2008 recession began; UCOP’s insistence on the necessity of this recent series of tuition increases has so many logical fallacies that if it were an assignment, it’d get an F (assuming, of course, that the overburdened TA grading it even had time to pay attention to it). Tuition hikes and budget cuts – at all levels of California higher education – are part of the decades-long process whereby the richest assholes in California (and the greater US) intend to make private what few institutions remain in public hands.

Even if you slept through math in high school, UC tuition increases aren’t difficult to calculate – just add a few zeros every few decades: since 1975 tuition has gone up 1,923% or, if you’d prefer to adjust for inflation, 392% (from $700 to over $12,000 per year)! Minimum wage in California, by contrast, when adjusted for inflation, has stayed roughly the same for the last 40 years, while the median family income has continued to fall since 1973. Most people in California make less money today, yet pay much more for education: for families struggling to pay rent, mortgages, car payments, etc., education becomes a luxury good. To make matters worse, financial aid packages meant to help low to middle income students attend the UC, heavily depend on students working part-time in an economy with a staggeringly high unemployment rate and very low entry- level wages; furthermore, it relies on students taking out thousands in loans that, most economic experts agree, will lock us into debt for the rest of our lives. Indeed, many economists believe that student loans will be the next credit bubble to burst, perhaps wreaking more destruction than the recession of 2008. Because there aren’t enough jobs for everyone who graduates, student loan default rates are nearing 10% – but, unlike other loans there’s no way out for student borrowers. Sallie Mae and Bank of America can take your paychecks and your children’s paychecks until they get back all their Benjamins, and then some.

Read the rest of it, here.

Six hundred and fifty

That's the size of the cut (in millions) that UC is being required to take with the Governor's new budget, with possibly another $100 million if the optimistic revenue projections built into the budget do not materialize. (CSU and CCs will also get similar reductions – the Governor's budget includes almost 12 billions in cuts to services.)

Having averted the worst-case scenario (a total reduction of $1 billion to UC), there is a temptation to sit back and enjoy the summer. But in fact (unless I am mistaken, I didn't check) $650 million is the largest cut the University has been required to take in a long time. Did Arnold ever do anything remotely approaching this?

Of course the Regents have announced that any reductions above the $500 million in the January budget will come from tuition increases. So the UC faculty can sit back, take it in stride, tell each other there is nothing they can do, and that this, too, will pass.

The May revise

The Governor released the revised budget. A very cursory look reveals that no further cuts are proposed for UC, CSU and CC, beyond the $1.4B already cut from higher ed in the January budget. However, the whole budget is predicated on revenue solutions that need voter approval — so we'll see.

The ides of May

Governor Brown will release his revised budget on Monday the 16th, just after the Ides of May (May is one of those months — including March — when the Ides fall on the 15th as opposed to the 13th). That is when we'll know if the University will bear the full brunt of the "all-cuts" budget, i.e., $1 billion, or whether it will be cut "only" $500 million.  It's a sad testimony to the state of UC that we are all sitting here hoping for a $500 million cut.

Some have surmised that the Governor is pursuing a "reverse Norquist." The Norquist doctrine contemplates implementing popular tax cuts in order to shrink the government, to the point where you can "drown it in the bathtub." A reverse Norquist, supposedly, pursues ruthless cuts to build up support for necessary tax collection. Both doctrines are, of course, flawed. The Norquist doctrine ignores that big corporations and the financial oligarchy have way too much to gain from their control of our supposedly democratic government to actually want to drown in the bathtub. It will never happen. Government might well get meaner towards the poor and the middle class, but it's way too useful to the oligarchy to disappear. And Brown's supposed reverse Norquist presupposes that people still value the services they are receiving — including the affordable quality education traditionally provided at UC. But California is no longer willing to pay for it. UC is not necessary for the upbringing of our very own jeunesse dorée (never was), and it no longer affords the middle class the means for upwards mobility, simply because social mobility increasingly works only one way in this country, i.e., down. So there you have it.

California Budget Shenanigans

Budget negotiations broke down between Gov. Brown and the Republican minority in the Legislature. So there won't be any tax extensions on the June ballot, which means we should brace for further cuts. If you thought $500M was devastating for the university, this is probably the nail in the coffin of higher education in California.

Last one out.

If you are not following the discussion over at Remaking the University on the presentation by Patrick Lenz and Nathan Bostrom to the Regents, well — you should. It seems that for once the Regents got the unvarnished truth about the financial state of the University (although see Bob Samuels' letter to the Regents for a different take).

Here is the bottom line: assuming only 1% year-over-year revenue increases from enrollment growth, 2015-16 revenue for UC will be around $5 billion, but costs will be around $7.5 billion in 2015-16, giving a gap of $2.5 billion (and that's optimistic: assumes tax extensions will be on the ballot and approved by the voters, limited increases in utility costs, etc). A number of measures can be implemented to reduce the deficit: the mythical $500 million in administrative efficiencies, better indirect cost recovery from funding agencies, tuition increases at the professional schools, more out-of-state students. Such savings and revenue increases are projected to add to about $1 billion.

So, how does the University go about closing the remaining $1.5 billion gap projected for 2015-16? There are only two sources of revenue left: state funding and student tuition. State funding would have to increase by 12.4% a year over the next four to five years to close the gap, or tuition would have to rise 18.3% each of those years. Or you could mix-and-match, with, say, 5% increases in state funding and 12.6% tuition increases. 18.3% tuition increases over 4 years, as pointed out by Bostrom in response to a question form a student Regent, compound to 95.85% — double the current levels.

It's clear that the University is out of options. Even the most draconian measures would only go a small part of the way towards filling the $1.5 billion gap:

• Increasing the student-faculty ration from 21.1 to 1 to 22.9 to 1 (a 9.1% increase) would save about $100 million. Do it 15 times, and you've closed the gap.
• Replacing 1,100 tenure-track faculty position by non-tenure track faculty, would also save about $100 million in salary and benefits. Therefore, replacing 16,500 TT faculty by lecturers would close the gap. 
• Eliminating 1,280 staff positions would also save $100 million. You get the picture.

Lenz and Bostrom pointed out that cuts are being "disproportionately" taken at the administrative level on the campuses. That might well be true. But looks like we are well past the point were significant economies can be achieved this way (much less the mythical $500 million). As much as we would like to see extravagant administrative salaries cut to size, the truth is that there is not much money there altogether. And in fact the cuts are pouring all over the place: more than 4,400 people have already been laid off (with more coming) and 3,700 vacant positions have gone unfilled. And my own department's instructional budget, used to support the graduate students with teaching assistantships and readerships, was just cut 25%. We are at the point were the mission of the University is being seriously jeopardized.  And did I mention that the budget of Corrections & Rehabilitation is not being cut, and that the oil severance tax has disappeared from the horizon?

So things are definitely not well at UC. The last one out, please turn the lights off.

UCB Dropping ballast

We have predicted since the very early days of this blog that the de-funding of UC by the state would bring to the surface tensions and potential conflicts among the ten campuses, potentially undermining the system as a whole. The two flagships, UCB and UCLA, and aspiring falgship UCSD would look to insulate themselves from the effects of the cuts by staking a claim to academic excellence in the system.

Sure enough, it looks like Berkeley is looking to drop ballast in the face of a proposed $80M budget cut. As reported by both the  California Watch  and the UCLA FA blog: in the words of UCB Provost Breslauer,

My greatest fear is that Berkeley will be driven into lesser and lesser stature and excellence to shore up the existence of other campuses [...] We are constantly fighting to make sure that redistribution (of funds generated by the campus) does not threaten our stature, the standard by which public higher education is judged in the world.

The $80M cut represents about 22.5% of UCB's $1.8 billion budget (UCB's share of state funds also declined from $500M in 2005 to a projected  $225M with the new cuts), and 16% of Jerry Brown's $500M cut to UC — but notice also that 16% of undergraduates in the system are at Berkeley (35,300 out of 218,000).

UCB's attitude is nothing new or unexpected. It is also nothing inherently reproachable: UCB has to do whatever they think it is necessary for self-preservation (and so do the other campuses). One just wishes they would go about it in a slightly more diplomatic manner, paying at least lip service to the idea of one university and the "power of ten" rhetoric. You know, just so that the other nine campuses do not feel like they are being dropped as so much ballast.

1.4 billion

That's the total amount that the Governor's proposed budget cuts from higher education in California: $500M each from UC and CSU, and $400M from the community colleges.

That is also the amount of restored funding for the Department of Corrections and Rehabilitation, a fact that reveals much about the Governor's priorities.

The State of California might not be able afford to take care of these kids by providing affordable, quality education at a public university;  but it sure can afford to take care of them later, as they enter the Corrections system.

Over a barrel

That's the University's position vis-à-vis the Governor: Brown is proposing a $500M cut in UC's budget (and another half a billion in CSU's budget), subject to voter's approval of the extension of a number of regressive taxes. Should the voters fail to approve the extensions, just like they did when the same provisions were put on the ballot by Schwarzenegger, even deeper cuts would be forthcoming.

The Governor has indicated that UC cuts are not to be made up by tuition increases (a good thing), and that the

The Administration will work with the Office of the President and the Regents, as well as stakeholders (including representatives of students and employees), to determine the specific mix of measures that can best accomplish these objectives.

I'll believe this when I see it, this just seems like a shot across the bow to let the University know that  they are being watched, and that the University's budgetary and administrative autonomy is coming to an end.


But more in general it is appalling to me that the Governor's budget includes a $1.4 billion restoration to Corrections and Rehabilitation, at the same time as it savagely cuts welfare and higher ed. Cutting across the board is the stupid way to cut. And where is the oil severance tax? That would have been a no-brainer, more likely to win voter approval than increases in sales and income taxes.  Doesn't anybody on the Governor's staff have half a brain? You are supposed to cut cost centers that have seen large increases, not the ones that have been decreasing (in the case of UC, for decades). Even Meg Whitman knew that.

This budget is no better, in fact in some way worse, than anything that Schwarzenegger tried to push through.

Brown's budget proposal

The governor's proposal is out, and it call for billions in welfare cuts, hundreds of millions in take-home pay cuts for unrepresented state workers, as well as  half a billion dollars in cuts for UC and CSU — each. As one correspondent put it:

20% cut — that's the end of UC.

Also, UCOP just released Yudof's open letter on the proposed budget cuts; with these proposed cuts, for the first time students would pay more in fees than the state contributes to the university. In response Yudof expresses a preference

to not seek an additional fee increase; that said, I cannot fully commit to this course until the board and I have assessed the impact of permanent reductions on campuses. I also will attempt to maintain, if feasible, the programs of financial aid that are so crucial to our public mission of serving all qualified California students, regardless of family income level.

There is, according to the letter, but one course of action to absorbs cuts of this magnitude:

The physics of the situation cannot be denied — as the core budget shrinks, so must the university.

The January Budget

Jerry Brown's first January budget is due out today – most likely with deep cuts to education and welfare, and some tax hikes and tax extensions. It won't be pretty, and UC and CSU are likely to take another hit.
Stay tuned.

State budget and UC

The Legislature and Governor are apparently getting close to a budget agreement, with the respective proposals now only about $4 billion apart. The centerpiece of the Democrat's proposal, approved by the budget conference committee, is a tax swap increasing income taxes but reducing sales taxes. While it's not clear what the net result of the swap would be, whether it will result in lower or higher revenue for the State, it does seem to go in the right direction by replacing a regressive tax with a progressive one (but revenue from income taxes tends to be more volatile than that from sales taxes). We will see. In the meanwhile, the Governor has put State employees back on 3-days-a-month furloughs until a budget agreement is reached (the fact that employee unions that play nice with the Governor were exempted shows that this was dictated more by politics than fiscal emergency).

As far as the University of California is concerned, the proposal approved in committee maintains the $305 million in restored funding for UC, supplemented by $355 million for capital construction, and $51.3 million  to support (past) enrollment growth.

It's clear that the news could have been much worse, and the fact that both the Governor and the Legislature have proposed no further cuts is certainly welcome. But it should also be clear that this is  a drop in the bucket, which does nothing to address years of decline. The $305 million are just about the amount that was being saved last year through furloughs, so we should — God willing — see an end to furlough program. But one of the reason the furlough program was so unpopular was that it hurt a lot of people for a relatively small amount of savings (about 1% of the University's $20 billion budget).

Needless to say, UCOP's was quick to release a statement by Patrick Lenz (UC's vice president for budget) praising the Legislature for going along with the Governor's proposal. The statement says nothing about general fund money lost in the last twenty years, and makes it look like everything would just fine at UC if the State restores those $305 million. Except, of course, that UC reserves the right to further increase fees:

The proposed budget recommendations... reduce the potential for significant additional increases in student fee.

I am not sure students and their families will find the nuanced statement very reassuring.

Summertime

(Not that the living is particularly easy.) Sorry for the long posting hiatus, I have been mostly on the go for the last couple of months. Sadly perhaps, not much new to report on the UC front. Let's see:

1. UCOP is pushing ahead with the idea of online education, which they view as the silver bullet for UC's woes. They seem to have no idea how expensive it is, and how much it would water down the UC brand. Not to mention that we heard no explanation whatsoever of why students would want to pay full UC tuition for online classes taught by graduate students or part-time faculty. At their latest meeting, the Regents approved a pilot program, on condition that it be externally funded from private sources. It's hard to tell who they have in mind. Perhaps some of the behemoths of online education in which UC Regent Richard Blum has so heavily invested?
2. UCOP's second brainchild is the idea that they can save half a billion dollars in "administrative efficiencies." That's an enormous amount, and they seem to have pulled that number out of their you-know-what. As far as anybody can tell, these efficiencies will amount to more centralization, more standardization, and more over-extended and under-paid staff. While students are asked to pay more for less, staff are asked to do more for less pay. It does not take a genius to see that this will lead to lower "quality of life" on UC campuses, not just for staff, but for faculty and students as well. 
3. Summertime is, of course, budget season in Sacramento. Nothing much seems to be happening on the Capitol, except for the Governor's idea to put State employees on minimum wage until the Legislature approves a budget. California is yet again facing a budget gap of biblical proportions, with very few ideas of how to about closing it. (Notice that the gap is biblical compared to the $80 or $90 billion budget, but only a  small percentage of California's GDP of 1.85 trillion: while not easy, one would expect that not to be impossible to achieve.) UCOP is all giddy about the promised $300 million in restored funding, an amount that would help end the furloughs, as UCOP has promised. But the Governor's proposed restoration of funding is predicated on several billion in federal aid (not coming any time soon) and huge cuts in services.

The May Revise

The Governor's revised budget is out. As widely anticipated, it's a mean, nasty budget, aimed mostly at cutting services for the elderly, the poor, and the sick and disabled. The Governor's proposal do do completely away with CalWORKS would affect about 1.4 million people in California, and withdraw support for families of the unemployed including one million children.

The Governor's budget for K-12 and higher education is in line with the January budget, meaning a small increase in funding for UC, CSU and CC over last year's deep cuts (not enough to even making up for years of decline). Some have seen here a clear gamble: threaten to turn California into the only state without a welfare-to-work program, and force the Democrats in the legislature to agree  to cuts in education in return for not annihilating CalWORKS. Since K-12 is protected by Prop. 98 (and accounts for roughly $35 billion of the $83 billion budget), and the revised budget already targets state employees' salaries and benefits, we can expect such cuts, if the Democrats fall in the Governor's trap, to affect higher ed to a greater degree.

The tale of the disappearing billions

Remember the hopeful news we were getting during the first few months of the year about rising state revenues? Well, the LA Times now reports that those gains have been completely wiped out when April revenue fell $3B short of expectations. Nobody really knows why: it might be that when the Legislature reached a budget deal last year they sped up collections in an effort to bring in more of that revenue in 2009; or it might be that with unemployment at a staggering 12.6% and furloughs of public employees people just don't have as much taxable (or expendable) income.

Be that as it may, the Governor and the Legislature now face an almost impossible task. According to the LA Times,

The retraction could mean even deeper cuts in government services — schools, healthcare for the poor and services for the elderly. Lawmakers may also be forced to consider more reductions in funds for public universities, as well as tax hikes.

Which will of course drive the State into an even deeper economic funk.  The Governor had been making noises lately about restoring (at least in part) funding for UC and CSU. We are not optimistic about that happening any time soon, which might well mean extended furloughs, layoffs, and even deeper cuts for the University.

The Governor's revised budget is due out on May 14. Brace yourselves.

The day after

Yesterday's rallies and demonstrations were heard around the state and across the country. While mostly peaceful (except for a car window smashed at UCSC, the 880 freeway blocked in Oakland, and a tense confrontation at UCD), participation was somewhat less than expected. At each event numbers were in the hundreds, not the thousands. First-hand accounts can be found elsewhere, I just want to point out John Garamendi's expression of support for UC in the HuffPo, renewing calls to support Alberto Torrico's AB 656 introducing an oil-severance tax to support higher eduction in the state. Garamendi is one the few rational voices left in California politics.

CUCFA statement in support of California Democracy Act

The Council of UC Faculty Associations has released a statement in support of George Lakoff's proposed constitutional amendment to change the 2/3 majority rule back to a simple majority in matters of budget and revenue. 

The California Democracy Act is the initiative started by George Lakoff to restore a simple majority requirement for state budget and tax changes. Californians for Democracy are now collecting signatures to get the initiative on the fall statewide ballot.

You can learn more and download a petition for the ballot initiative to at http://www.ca4democracy.com/

You can’t actually sign the petition online. But, if you are a California registered voter, you can print it out, sign it, and mail it in by listing yourself as both signatory and circulator/witness. There is also a version of the form that allows you to add three more signatories. All signatories on a single form must be registered in the same county.

The deadline is April 12. By then 697,000 valid signatures will be needed, but to insure sufficient valid signatures are collected the goal is to collect 1 million signatures.

The Council for UC Faculty Associations endorses the initiative. This signature gathering effort is an opportunity for you to join your colleagues in helping to change the structure of the state legislature so that an intransigent minority will no longer be able to stop all action on the budget.

Please download the petition, sign it, and send it C4D. Although this is a long shot in the present political climate in California, it's the best hope we have. If this fails to qualify or gets voted down in November, it would be very bad news for the state and the university.