Budget Analysis: Welcome Relief or More of the Same For Higher Education?

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Last week, the Orange County Register ran an article arguing that criticism by students over UC salaries has fueled the student protests that exploded in the late fall of 2011.

As the paper notes, “Over the past few months, the University of California has raised undergraduate tuition by 18 percent, awarded raises of as much as 23 percent to a dozen high-ranking administrators and announced a possible 81 percent tuition increase over the next three years.”

The article continues: “Behind the angry chanting and acts of civil disobedience is a growing sense that the 10-campus UC system is no longer a public institution accessible to the middle class, but rather a sprawling bureaucracy of hospitals and auxiliary research institutions buffeted by an ever-expanding roster of administrators.”

Students are quick to note that none of these expanded functions “translates directly into expanded course offerings or improved student-to-faculty ratios, even as their tuition dollars help sustain the system.”

“The university is now being run in the interest of the administration,” said UC Irvine student activist Anne Kelly, a Ph.D. candidate in earth system science. “They’re promoting their own internal growth, asking us to sacrifice with higher tuition – but administrators have had raises.”

It is through this lens that we must evaluate the governor’s budget proposal for higher education.

From 2008-09 through 2011-12, the state reduced its funding for higher education – that is the UC, CSU, and Community Colleges, by $2.65 billion.

As the governor’s report notes, “The most notable consequences have been significant student tuition and fee increases and declining course offerings, which have made it difficult for students to complete their certifications and degrees in a timely manner.”

Toward those ends, the plan is to curtail tuition and fee increases, lessen pressure for students to take out loans, promote student success with “specific accountability metrics,” find a more stable funding source with an increased general fund contribution of a minimum of four percent per year, and to include fiscal incentives to “encourage the institutions to factor these costs into their overall fiscal outlook and decision‑making process..”

For the University of California, that means primarily “an ongoing increase of $90 million General Fund for base operating costs, which can be used to address costs related to retirement program contributions.”

Naturally, the University of California is welcoming these changes.  In a statement last Thursday from Patrick Lenz, UC vice president for budget and capital resources, he said, “We’re gratified that Gov. Brown is proposing an additional $90 million in funding for the University of California – an ongoing increase that the governor said can be used to address costs of employee retirement.”

He added, “We applaud the governor’s willingness to grant UC leadership maximum flexibility in navigating these fiscal times, and also his recognition that, after a 20-year hiatus, the state has a responsibility to resume paying for a portion of retirement costs.”

“The administration’s focus on protecting higher education from further budget reductions is a welcome relief, and the governor’s stated desire for a long-term state investment is encouraging,” Mr. Lenz continued. “It appears the governor is moving in the right direction after cuts totaling $750 million this year alone.”

He adds, “His proposal is only the first step toward a state budget for 2012-13. We will continue to make the case that public higher education is not a cost but the best investment an innovative state like California can make.”

But, then there is the fine print.  The stable funding for the University of California is dependent on voter approval of the governor’s tax initiative.

“This ballot measure will not solve all of our fiscal problems, but it will stop further cuts to education and public safety and halt the trend of double-digit tuition increases,” the governor said.

Just last month, the governor slashed $100 million from the University of California’s budget, which brought the total cut for 2011 to $750 million – an amount that far dwarfs any restoration.

Last year, the state revenues fell more than $2.2 billion short of projections, “forcing” the governor to initiate “trigger cuts” to education and social services, based on the state budget enacted in June.

So while the governor and leaders in the University of California emphasize the restoration of funds, in fact, it will be up to voters.  The voters will have to decide if they are willing to pay higher taxes to save schools from additional cuts.

The governor’s plan includes another round of “trigger cuts” which would exceed $5.5 billion if the voters do not approve his sales tax hike and income tax surcharge on high-wage earners.  The bulk of that goes to schools – $4.8 of the $5.5 billion.

How much are we talking for the University of California? $200 million.  So yes, the budget might restore $90 million, but at the risk of $200 million in cuts.

No wonder many critics are calling this political extortion.

“It certainly is political extortion because he’s basically saying, ‘I’m going to really cut essential services unless you pass this tax,’ ” said Jon Coupal from the Howard Jarvis Taxpayers Association.

Unlike the public relations people from the University of California, representatives from the California Faculty Association which represents faculty in the CSU system emphasized the looming gray cloud.

CFA President Lillian Taiz, a professor of history at Cal State Los Angeles, in a statement said, We agree with the governor, that any effort to put the state’s fiscal house in order must include new revenue. We welcome all serious efforts finally to address our state’s problems by restoring revenue; as a state we must pay for the public institutions and programs that make California great.”

However, she did not dodge the core issue.

“While the budget proposal released by the Governor Thursday appears to contain no immediate cuts to the California State University, the proposal includes new shifts in costs that will ultimately create a bigger hole in the public university’s already stressed budget,” Professor Taiz said.

“After years of persistent funding cuts, and measures taken by the university’s management that focus the cuts on classes and students, we are running out of options,” she added.  “If this budget comes to fruition, an entire generation of CSU Students will be forced to bear the burden of our state’s continued disinvestment in public higher education.”

—David M. Greenwald reporting

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About The Author

David Greenwald is the founder, editor, and executive director of the Davis Vanguard. He founded the Vanguard in 2006. David Greenwald moved to Davis in 1996 to attend Graduate School at UC Davis in Political Science. He lives in South Davis with his wife Cecilia Escamilla Greenwald and three children.

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