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.

The Gilded 36

I have been asked why I have not commented on the preposterous threats and demands of the "Gilded 36" (as I suppose they will go down in history), and in fact I realize that the California Professor has been on hiatus for a month (well, I have been busy, and then of course started teaching this week).

The facts are known: in a public letter to President Yudof, thirty-six highly paid UC executives, mostly from the Medical Centers (but not only), demanded that the University lift the $245,000 cap on compensation that goes into calculating UCRP benefits, citing a 1999 decision by the Regents that was only contingent upon the IRS's waiver of such cap for UC (which was granted in 2007). Should the University fail to abide by the Regents' 1999 decision, the gang of 36 complained of the "demoralizing" effect of such failure, and should the University further fail to be swayed by compassion for the 36 executives,  legal action was threatened.

The preposterous and tone-deaf demands did not go unnoticed. See for instance the excellent discussion by  Chris Newfield and Michael Meranze, as well Bob Samuels' post. It is just amazing  that at a time when instructional budgets are cut, student fees raised, employees fired or furloughed, retirement benefits reduced and contributions increased, these people come through with such requests.

It is also important to notice that the 36 signatories of the letter are not by any means the only ones who stand to benefit from a raised cap. There are many more, perhaps hundreds, of employees across the system with covered compensation above $245,000. But interestingly enough, very few of them actually ever see a student. (The increased retirement benefits were defended by Boalt Hall Dean Chris Edley and UCLA Economics Chair Roger Farmer.)

President Yudof and Regent’s Chair Gould have now replied that the 1999 decision by the Regents to pursue a waiver of the cap from the IRS did not further "obligate the University in any way to proceed with its proposal." Accordingly, they claim,

the action taken by the Board 10 years ago was not self-executing and that the pension proposal was never implemented. Months ago, the Board retained counsel to assist the University in the event this position should need to be defended in the courts. While those who signed the letter are without question highly valued employees, we must disagree with them on this particular issue.

It's interesting to note that the Regents knew "months ago" that this was coming, to the point of retaining counsel:  the Gilded 36 must have been making noises for quite a while.

Now, some think that it was all orchestrated: the gang of 36 come out with preposterous demands, the Regents and the President respond in kind, and finally a "compromise" is reached, perhaps in the form of a raised cap of some sorts. The Regents and the President save face and the highly paid executives get their benefits increased. It is certainly odd that such an effort is being spear-headed by Edley, who has so far consistently come down on Yudof's side of every issue. Of course we don't know if the orchestration actually took place, and we don't know what Yudof was told by legal counsel (but we would really like to know).  Given the outrage that the letter  produced (to the point of getting the Legislature involved), either the Gilded 36 know that they have an air-tight legal case or they spectacularly miscalculated.

The Blue and Gold Scam

I confess that, like many, I was impressed by Yudof's raising the cap for Blue and Gold eligibility to $80,000: it looked a step in the right direction, intended to extend access to UC for the middle class, and a way to return to students some of the extra revenue collected through tuition increases.

But now, as Bob Meister makes clear in his analysis, the proposed increased cap is financed by revising the amount of "self-help" students are supposed to provide, and deducting such amount from their financial aid. In other words, eligibility is extended by reducing the amount provided to current recipients, at no cost to the University, who pockets the extra tuition revenue. A gimmick or, in the words of UC Financial Aid Directors, “a political plan, not a practical plan”. Unfortunately, this does nothing to improve our early assessment of Yudof's leadership.

Mons Parturiens

The final report of the Commission on the Future is out. Move it along, people, nothing to see.