FINANCING  the  UNIVERSITY -- PART 15

by Charles Schwartz, Professor Emeritus, University of California, Berkeley
schwartz@physics.berkeley.edu                                    June 26, 2008

>>This series is available on the internet at   http://socrates.berkeley.edu/~schwrtz

WHAT FUTURE FOR UC? – SEVERAL VOICES


     On May 27, the Los Angeles Times ran a large Op-Ed spread with the heading:

What should UC be?   Next month, Mark Yudof will take over as president of the massive university system. 
Here's a preview of what's going into his suggestion box.


     Here are two of those pieces that talk about UC’s financial challenges.
----------
Tell Californians the truth    By Stanton Glantz

Mark Yudof should level with the people of California, so they understand that only public funding can restore the University of California's tradition of top quality and wide access.

In 2004, UC President Robert Dynes and Gov. Arnold Schwarzenegger abandoned the idea of a public university in favor of a privatized model. Dynes accepted a $1.5-billion permanent cut in the university's annual $5-billion core operating budget, and agreed to substantially increase tuition every year, in exchange for a promise (now broken) of modest increases in state money while UC sought private money "to support basic programs."

The fee increases don't come close to making up $1.5 billion a year. And although UC has inefficiencies, getting rid of them won't make up the deficit either. Neither will donations or corporate partnerships, which mostly are earmarked for projects, not core costs. (In fact, such "largesse" actually increases core costs.)

The only realistic way to replace public support with private money would be to double the already doubled fees, to $15,000 to $18,000. Alternatively, the university could abandon the equivalent of three campuses.

If the public really understood this situation, the political heat would force Schwarzenegger to restore California's promise of a high-quality, affordable university education.

The test for Yudof is whether he'll have the courage to recognize that California is at a crossroads, stop covering for the governor and tell the truth about privatization.

Stanton Glantz, a professor of medicine at UC San Francisco, chaired the UC Committee on Planning and Budget in 2005-06.
----------
Play fair with student fees     By Charles Schwartz

After decades of generous state support, UC is facing a huge budget crisis, and the only path the regents can see is to keep increasing student fees. A better approach would be to start laying out the facts about where UC spends the money it now takes in.

Here is one example: UC's official budget report says that the "average cost of education" is $17,390 per student per year; student fees cover only about 30% of that cost. That is very misleading. The $17,390 is calculated according to a long-standing habit of research universities to bundle all the costs of undergraduate education plus graduate education plus faculty research into something called the I&R (instruction and research) budget. My own study, based on official UC documents, leads me to conclude that UC now spends an annual average of $7,400 per student on undergraduate education, and undergraduate fees are set at 100% of that cost.

In other words, with the continual decline in state support and the continual rise in student fees, the state portion of payment for undergraduate education at UC has vanished entirely. Any further increase in student fees would mean that UC is using undergraduate fees to subsidize faculty research and related graduate programs. Those are valuable programs, but they belong in the domain of the "public good." It seems totally unjust to push that cost onto undergraduate students and their families.

Charles Schwartz is a physics professor at UC Berkeley.


     I got a few email responses. One, in particular, led to a discussion I would like to share. This comes from Christopher Newfield, a Professor at UC Santa Barbara who has served these past two years as chair of the systemwide Academic Senate Committee on Planning and Budget. Here is our exchange.
----------
Charlie, the LAT must have mis-edited you in the first sentence, where your piece says "After decades of generous state support, UC is facing a huge budget crisis."    The second half is true, but as you know, the state has cut general fund support by almost 40% in real $ since 1990. I think this is a point that isn't widely understood.  Blum doesn't bring it up, for example.

I share your opposition to fee increases. I've been working for two years to try to get UCOP [University of California Office of the President] and other administrators to push aggressively for Master-Plan levels of state funding, though the budget troubles have made this less likely than ever.

Still, I'm afraid that telling the public that higher fees will go to subsidizing research will harden opposition to state funding at the same time as it hardens opposition to increased fees.

We do need to air this question of how research really gets funded, but in a different context.

Best wishes, Chris
----------
[May 27] Chris;

I understand your concern: Who will pay for faculty research?

If you want to build (or rebuild) public support for the multiple missions of UC, how can you come out in favor of continuing the old budget lies?

I say, a radical departure is called for: tell the truth about where the money goes; then we can start to rebuild something good. That may upset old habits, but what realistic alternative do you see?  (This practical approach is aside from the biblical question of : What are we here for if not to be truthful?).

Charlie
----------
[May 28] Chris;

Let me respond in more detail, trying to make a real discussion with you.

The "decades of generous state support" were the 1960s, 1970s, 1980s. The 1990s started off badly, student fees went up, and then there was some recovery.  The 2000s started off not so bad and then got very bad.  Experts predict that the bad will continue, perhaps getting worse.   I agree that my LAT piece could be misleading in leaving out all that detail; but opeds are quite compressed.

I see two current approaches being pursued to finance UC's future. There is the Garamendi-Newfield approach. which seeks restoration of state funding at the old level (this is what your CPB [Committee on Planning and Budget] papers lay out as necessary to maintain quality and avoid much larger student fees.)  Then there is the Blum-Birgeneau approach, which accepts that there will be diminishing state funding, therefore goes for fast rising student fees and hopes for adequate need-based financial aid. (That latter path is properly called privatization.)

I think everyone would prefer the resumption of generous state funding; but some see that as unlikely to occur.  Of course it is worth a serious try; but let us be clear about the obstacles.  I don't need to recite to you the standard political analysis about raising taxes.  But please also recognize that a significant component of that difficulty is tied into the history of UC's budgetary habits.

There is significant opinion in Sacramento that the old pattern of state funding to UC was overly generous (compared to other budget needs of the state); and there continues to exist opinion up there that UC can do with less money from them.  The fact that UC says student fees pay for only 30% of the cost of their education is an invitation to state lawmakers to believe it is ok to pass on more of the cost in still higher student fees.

My view is that we must break that old habit of hiding the cost of faculty research under the accounting blanket called "Instruction" and present the public with the real facts about where the money goes.  Who will then pay for Research?, you ask.  Well that same question is an essential part of the Garamendi-Newfield program.  But with that old lie eliminated, then the public has to face the facts: undergraduate student fees have reached their ceiling; and if the state wants the benefits of a first class research university, then here is what the state must pay.

You say, "We do need to air this question of how research really gets funded, but in a different context." What other context do you imagine? That lie is decades old (and it is not just UC's lie, it pervades all research universities, both public and private.) It is something we have avoided confronting in good times.  Maybe it needs to be faced in this time of crisis. ("Crisis = Opportunity")  A new president, coming in from outside, might conceivably see that such a radical departure (transparency = honesty) is actually our best bet at restoring public trust and confidence in the university.

What do you think?
Charlie
----------

[June 24] Charlie - I'm so sorry for the delay getting back to you about this: I've had to take a break from university funding to catch up on a couple of other projects.   Actually, I fully agree with your position here.  I've called for "true costing" in research and it really does need to start happening.   Not doing this both maims the budget and supports the false argument that GF [state General Funds] is paying only for a private good of an individual college graduate's higher salary.

Please keep writing about this -  Chris


Some Other Voices Get Published

     Asking Californians to pay more in taxes to support higher education appears boldly in the following Letter to the San Francisco Chronicle on June 17, 2008.
----------
Taxes needed

Editor -I write as a faculty member of the University of California to protest the damage state budget cuts are doing to my institution. Fifty-four colleagues in sciences and humanities from six campuses of the university have also signed this letter.

When the California system was conceived, the idea was that higher education should be for everyone. It is neither a frill to be funded by philanthropists nor a privilege restricted to those who can afford it. It is a basic good, comparable to roads, parks and libraries, which citizens support by paying taxes.

Unless the public renews this contract with itself, the university will continue to lay off lecturers, cut teaching assistantships, raise student tuition and fees, drastically underpay clerical and maintenance staff, turn away students from classes because of understaffing, eliminate entire programs and lose qualified faculty to other schools. Indeed, education at every level will continue to be eroded.
Preserving a great university in hard times will require new or increased taxes. Gambling revenues are neither sufficient nor appropriate. I implore California voters to reaffirm the principle of shared payment for shared services. Tell Gov. Arnold Schwarzenegger to abandon his anti-tax policy and rescue California's fine educational system.

ANN SMOCK, Professor, UC Berkeley


     Another recent (6/23/08) Op-Ed in that same newspaper by Willie Brown, former Speaker of the Assembly and Mayor of San Francisco, urged more state support for higher education, ending with:
----------
Our state leaders must find the courage and tenacity to weather today’s storms by growing tomorrow’s economy, rather than thwarting it.  We citizens must urge them to do what we did in previous economic crises: face the reality, bite the bullet and raise the revenues … but not on the backs of our college students.  California can’t afford to slam the door on its own future.


Where are The Regents?

     John Garamendi, Lieutenant Governor of California, sits as an ex officio member of the UC Regents and also of the CSU Trustees.  In recent months he has advocated a much more vigorous approach to increasing state funding for all of higher education in the state. In particular, he has urged the Regents to adopt a policy that would freeze student fees at their current level and allow any future increases to be limited to the rate of inflation.

     Garamendi has supported his position with documentation from the Academic Senate (see the “Futures” report and the “Cuts” report, which may be found at   http://www.universityofcalifornia.edu/senate/  ); and he has argued that the regents should not volunteer to raise student fees but rather should put the onus of that decision on state lawmakers. Conversely, he argues, if the regents do announce that they plan to raise student fees for next year, the legislators will be happy to proceed with cuts in the UC budget in order to meet other pressing needs.  At their May meeting The Regents rejected Garamendi’s proposal and went on to approve a 7% increase in student fees for next year.

     In previous papers I have noted two new committees of the regents that are trying to grapple with these long range financial issues. The secret group (called the Task Force to Evaluate University Funding Options) has not met since last July and has issued no reports of any kind. The open group (called the Committee on Long Range Planning) has held several meetings, drew up an impressive list of goals for a vibrant UC in the future and has even tried to estimate their costs; but deciding how to obtain the necessary funds and how to rank their priorities remains a future task.

     My guess is that these regental planning efforts are all on hold, awaiting the leadership of the newly hired President.


Where is the New President Headed?

     Mark Yudof has been hired as the new president of the University of California.  He was selected to replace Bob Dynes, who was a disaster in that position. The chief architect of this change in leadership (Yudov is the first UC president in many years to come from outside of the UC system) was Richard Blum, San Francisco money maker and current chair of the Board of Regents.

     Where is Yudof’s head on these issues?  June 16 was the date of Yudof’s taking over the captain’s seat; and it was marked by a media-wise chat presented on the university’s web site (http://www.ucop.edu).  Here is a transcript of the relevant remarks by our new president.
----------
I do have strong feelings about advocating for a more fulsome budget for the University of California. And I think it is not so much testifying before a particular committee, although that may be important, or having the Governor’s ear, which I hope to have.  I think it is a long range educational plan; and it is our job to make a more effective case for why it is that many of the great accomplishments of this state have been occasioned by what has gone on on these campuses. And if we can accomplish that, then I think that is the backdrop against which we can be more successful in the appropriations process.

Budgets some years are stronger than in others. There are recessions, there are downturns. But long term, we need to engage in that educational process.

There has been an increasing attitude of privatization of higher education. And that’s just a fancy way of saying that the students and their families are called upon to pay more and more of the cost. And I would argue that the University of California is still a fabulous buy. And you get a quality of education that you might get, say, in the Ivy League on the East coast or the University of Chicago or Stanford, at a fraction of the cost.  But it nonetheless is the case that it is getting more expensive, more privatized.

And financial aid is very important. You need to always ask what is the real price as opposed to the sticker price. But, particularly for the middle class, the people who aren’t qualified for Pell grants and the like, it is undoubtedly the case that it is a hardship.


     This is a guy who seems to be direct about what is going on: he actually uses the word “privatization”. But he is also undecided about which path to choose.  He appears to be a politician. If he can get more money from the state, Hooray!  If he can’t get enough, then student fees will continue to escalate and he’ll say: It’s not my fault. Same old…