Feeding the Cuts, Part I

The major news of this UC Regents meeting is yet another student fee increase – 9.8% on top of the 8% already voted for 2011-12 (and another 12% at CSU), with an additional 5.9% mid-year increase possible in January.  On the other hand, a UC fee increase isn’t news, since the Regents raise fees every year (18 of the past 20), sometimes twice a year, and a third of the time by more than 10% (Mark Yudof’s count).  Annual fee increases of 7%-10% were programmed into the Compact for the few years that it ran in the previous decade, and they are logically entailed by the view of a vocal faction of Regents that include board Chair Gould, über-Regent Blum, and shadow-Regent Crane that state funding “is going away.”  Such comments renew the state’s license to do exactly that, even though the pessimism is well-founded in recent experience with the state.

Behind the finger pointing, higher education funding is a discourse and a practice that is created by thousands of interactions among political, business, and educational leaders every year, with contributions from the peanut gallery comprised of students, staff, faculty, and the general public.  It is a collaborative product.  The combination of flat or falling funding and fee hikes have with rare exceptions been annual staples of the budget process for twenty years.  They are a co-creation of states and higher education, and now follow each other as the night the day.  The result was nicely summarized in an epitaph  from Reclaim UC – each defeat becomes the point of departure for the next one.

The repetition of the annual ritual raises an obvious question: why should anyone care this year more than they did last year, or in 2009, or in 2004?  Each year the public hears the same expressions of disppointment and resignation from the universities and the same claims of more or less reluctant necessity from both political parties in Sacramento.  Each year hundreds of thousands of students start college in California and hundreds of thousands graduate, and life goes on. 

One major change is the end of even the appearance of a balance of power between the pro-cuts and the pro-education sides.  The necessity argument now gets daily steroid injections from born-again austerity fundamentalist Jerry Brown, who is Hooverizing the state economy with permanent cuts in every public program designed to preserve or improve the state’s human capital:  from K-12 to Cal State to Cal WORKS, “The Poor Just Got Poorer”, and the phrase would be a good candidate for a new California state anthem.  But there have been no matching steroid injections from the other side.  

No legislator thinks they might be voted out of office for excessive cuts to higher education.  No one in a position to make a credible threat is willing to make one.  Progressives and educators have no full-time political party, and no political whip equivalent of the Club for Growth, which regularly threatens members of its own party around its core issues, these days regarding their temptation to  raise the debt ceiling. 

Higher education exerts no such leverage.  Governor Jerry Brown took higher education hostage in an attempt to force Republicans to support putting tax extensions on the ballot (see clip): the political calculation was that Republicans would be more upset if he shot UC than if he shot, say, CalWORKs, or at least might get more pressure from their conservative constituents.  UC President Yudof ceded Brown’s first $500 million cut in January in an effort to “do all it can to help the state,” but then drew  a line in the sand against the further $150 million cut. The response of Gov. Brown and the Democratic majorities was to cut the $150million and promise another $100 m cut if the state doesn’t make current revenue projections.

In a small-d democratic political world in which political representatives are directly accountable for the effects of their acts, destructive actions bounce back against their perpetrators. In that sort of world, compromise with your opponents might get you something.  In our current political world, compromise gets you nothing: Brown doesn’t need Yudof, or any of us, and Sacramento doesn’t care about the rest of the state, because we never do anything to them.  There is no logical endpoint to this for UC's budget: not $2.5 billion in general funds, not $2.3 billion, not $2.0 billion, not $1.65 bilion, etc.

So how do we make it stop? How do we give Sacramento a reason to make it stop? 

My suggestions involve two corrections and an answer.  The first two steps involve fixing public university tactics, with UC as the case I know best.  The latter is an issue of international importance to the future of public education.  I will devote a post to each of these.

 1. If you don’t like constant cuts to public funding, stop showing public funds can be replaced with annual tuition increases.

Here’s an example.  UC President Mark Yudof officially opposes privatization. He described privatization to a roundtable of UC student newspaper editors as “the point that I get out and march with the students."  He defined the unique mission of public universities as great research and teaching quality for the nation’s highest proportions of low-income students. This is exactly right – Yudof is in effect describing “mass quality,” the original core of the postwar boom’s widely attractive vision of social development for everyone. 

This was the best ever justification for high levels of public funding.   Public higher education is not about the manificent training of a Harvard-style “natural aristocracy” to rule the rest, but about the superb training of each of us.  No other theory of education – universal higher education, not uniform, but universal – scales to the enormity and complexity of the simultaneously cultural and technical problems that our societies all face.

But a bit later in the same conversation, Mark Yudof says, “if you mean [by privatization that] students are paying more and more of the cost of their education that seems to be the road we’re on.”  But of course that is the main form of what the students and everyone else means by privatization.  Yudof accepts this form of privatization, and implements it very frequently. UC’s de facto official position is high-tuition / high aid -- really high tuition logically in only a few years time -- and echoes the standard private university American funding model that the publics slowly started to adopt after 1980.  

 So which is it, UC?  Is it no privatization, or continuous privatization in annual increments? UC is on both sides of the question intellectually, and on the side of continuous privatization in practice. The net impression left by Yudof’s sometimes eloquent remarks is that the public mission can  be satisified by private money --high fees in conjunction with financial aid, for the state’s historically most diverse and underfinanced younger generation.  UC policy gives the public no reason to oppose tuition increases, especially when they hear financial aid is good or when their own children are out of college

Interestingly,  UC leaders are going against public opinion here: a recent PPIC poll suggested that three-quarters of respondents think that public universities are underfunded and that two-thirds of them want to raise taxes rather than raise fees.  But if UC leaders don’t fight for zero fee increases, as a precondition for forcing solid public funding, why should the public do it for them?

The special tragedy of this ambiguity is that we already know what happens when we subject public universities to a mix of cuts and austerity. It’s very simple:  educational attainment goes down. The US had a comparative educational advantage over the rest of the wealthy world for about 150 years – first at the high school level and then in college degrees. Now, for the first time in U.S.  history, younger people are less educated than their baby-boomer parents (Measuring Up p. 5, John A. Douglass, Goldin & Katz, . . .).   This decline coincides exactly with the steady shift in public colleges and universities from high public funding to high private tuition.

If you are wondering whether privatization caused this destruction, the answer is yes it did. Very briefly: private investment – anything from donations to student fees – logically tries to maximize its return, and thus piles in at the top, where attainment is already strong.  Think of Meg Whitman building the most expensive dorm in history at her alma mater Princeton University.  Private funds never adequately support the colleges with the highest percentage of low-income or otherwise disadvantaged students, which also generally have the lowest graduation rates.  This is also true of a unique place like the University of California, where large numbers of low-income students had for decades lept whole quartiles of attainment in a four-year bound.  Private money doesn’t have the scale, the scope, the social ambition, or the interest in those who start at low or medium levels, and thus can’t budget the overall American attainment rate that depends on moving those groups in huge numbers.  The attainment rates of the lower three quartiles haven’t improved in thirty years (Mortenson, June 2010), That’s all the time it took for the country’s pro-private funding model to destroy the country’s global educational leadership.

The first step towards saving public universities is to stop acting as though annual fee increases can replace the public funding that made US higher education great in the first place.  They can’t. (UC leaders know they can't, but it's the annual increase actions that count.) They never will.  Public funding will never come back as long as universities keep offering this phony and painful substitute.

Ending a Bad UC Week: What Points Might Help Turn Things Around?

This was one of the worst weeks in recent UC,CSU, and CCC history, as the new Democratic governor dished out triple $500 million cuts to all the segments ($400 m to the community colleges), neck-and-neck for the cutting record of his Republican predecessor.  Comments on this blog and elsewhere suggest that some people think this is a clever political ploy, but many people are on the verge of giving up on the idea that California higher ed will ever recover under our political system. 

In the midst of this, there was something oddly cheerful about UC President Mark Yudof's conversation with Patt Morrison in the Los Angeles Times. He may have felt obligated to exude a leader-like calm. Under the circumstances, it would be better to exude a leader-like determination to go full tilt at the emergency.

In content  it was one of Yudof's  best press outlings since he arrived at UC.

The Good:

• Full cost accounting for Brown's proposed state cuts: "Remember, it's not $500 million, it's really closer to a billion, because unlike community colleges and state colleges, the state doesn't give us money for employer contributions to the pension plan, so that raises the real cost [of the cuts] to $700 million; then you have union contracts, energy contracts, inflationary increases -- we really have a billion-dollar problem."
• The racial dimension of underfunding. This issue rarely gets broached in print, but it has to be. Here, Yudof says,"The truth is, the deterioration of [education] funding predates this horrendous Great Recession. It's not like things went really great between 1990 and 2007, and then all of a sudden we had this problem. Some of it's driven by demographics -- an aging population of voters [worried about] Social Security and police protection. We have a huge demographic of Hispanic youngsters. It's no time to trim back and say, well, they're not our children; well, they are our children, maybe not biologically, but they're our children."  Scratch the biological othering and you have an important statement of a major origin of our self-dissolution. 
• Great salaries are not the UC norm: " [In] the nation's 62 top universities, our highest [paid] chancellor ranks 50th. And the chair of the group, from Santa Barbara, ranks dead last."  Incidentally, Henry Yang, UCSB's chancellor, is also the longest-serving chancellor in the system.
• Centrality of Higher Ed to the Future. "Who's going to train the nurses, the veterinarians? Who's going to invent the better solar panels? Who's going to make sure the crops are safe? Business is not doing this.  If we eat our seed corn, to use a Texas analogy, there's not going to be anything to support these programs. You have to create the basis for long-term prosperity."

The not-so-good

• Leading with the Pension Problem. "We have a $20-billion shortfall, long run, in the pension plan. I think it's going to take 20 years to dig our way out, but we have a plan."  No one wants to hear about UC's $20 billion pension hole -- out of context.  In addition to the New Year's Gang of 36 fiasco that sustained UC's reputation as rich enough to sponsor both high executive salaries and continuous internal maneuvering for bigger perks, the Right has turned cutting public pensions into a national crusade. The Economist declared war in a recent cover story, "The Battle Ahead,"  The Weekly Standard is pushing the idea that states should be able to declare bankruptcy so they can default on their obligations to public employees.  There are dozens of these examples, many with the intent of distracting from real economic problems like the transforming of private into public debt and the country's lack of viable innovation and employment policies.  Better either to engage and explain decent pensions as, among other socially-important things, compensation for UC's sub-market salaries, or say nothing at all.
• Same Old Wrong Claim that the Humanities and Social Sciences Lose Money. "We roughly have a $20-billion budget; $3 billion comes from the state. That's the English department, the Spanish department, economics -- that have difficulty generating the big outside grants. I love the humanities; I'm a creature of the humanities. But the engineering colleges are going to bring in more external research support, and that money's crucial."  Mais non, c'est faux!  In fact, the big outside grants lose money, and are supported in part by cross-subsidies from high-enrollment fields in and out of the science and engineering fields that bring in big, important, and yet very costly grants.  UC has officially acknowledged this. For example, the third sentence of a Regents's item in November 2010 reads, "The UC system incurs $600 million in unreimbursed indirect costs every year."  A San Francisco Chronicle report on the original UCOF discussion of this issue put the figure at $720 million on $3.5 billion in research revenues, or a loss of about 20 cents on the research dollar. The Academic Senate's indirect cost recovery report calcuates that ICR is about 25% while true indirect costs "appear to be in the 65-70% range" (p 5).  Mark Yudof's repeated misstatement on this has at least two bad outcomes: (1) it undoes emerging public awareness of why education is so expensive; (2) it undoes emerging awareness among scientists that they are not huge profit centers for the university.  Science research should have more funding, not less (as should the social sciences, arts, and humanities, which are pitiful also-rans). But research should be fully funded and thus not damage the finances of struggling public universities. If Mark Yudof can't be clear about this, how can we find any of the $500 million in internal savings we will need six months from now?
• Lionizing Arnold Schwarzenegger as the Education Governor. "[Former Gov.] Schwarzenegger had a huge regard for higher education. He understood its role in economic development. Great research universities take a long time to build and can be destroyed in a very short period of time; he understood that."  In reality, no modern California governor whacked higher ed like Arnold did, early and often.  He forced a Compact on UC and CSU that held down budget growth in good years, obligated annual tuition increases at 2-4 times the rate of inflation, and mandated infinite private fundraising to try (in vain) to fill operational holes.  He then welched on the Compact in a heartbeat in 2008 and cut UC 20%. He also crusaded tirelessly against public services in general, and tried to eliminate the UC pension along with those of all other state workers in 2005.  If the president of UC thinks this guy was a great higher education governor, then the UC president likes cuts and increasing dependence on private funds.  Mark Yudof clearly says he likes neither, so this kind of politicking should stop. 
• Letting Jerry Brown off the hook.  Why not instead say, "I know a lot about budget deficits. But budget deficits are no excuse for unraveling a great public university system."  
• Mixed Signals on Tuition Increases. "We've hit the students very hard, roughly 40% [of increases] in the last three years, I think. What we've given back? If you have a family income of $80,000 a year and you're financial-aid eligible, you don't pay tuition. I thought that was pretty good. And we didn't apply the increase to students [with family incomes] between $80,000 and $120,000."  So we didn't hit the students hard?  Full cost of attendance is making UC less affordable for low-income students, who in spite of Blue-and-Gold assurances borrow more both in percentage and absolute terms than do students of the middle-class.  UC needs to be much clearer that in spite of all the University tries to do, and its genuine good intentions, it cannot sustain student access with incessant, gigantic state funding cuts.

The omitted:

• Credible internal budgeting and operating reforms that will lead to real savings. I don't mean this $500 million in "administrative savings" floated last year by CFO Peter Taylor, (and I certainly hope that the Brown administration didn't get its $500 miillion cuts figure from that claim).  I mean concrete measures to respond to many stakeholders' legitimate concerns about UC's opaque budgeting and fund distribution, not to mention concerns about unfair distributions of resources and operational blockages of the kinds frontline faculty and staff know all about.  Given Brown's statement that he will work wilth all "stakeholders," Mark Yudof should sponsor real cross-functional collaborations, and assure the public that all parts of the UC community, including the dreaded unions that represent close to half of all employees, will be full participants.
• A timeline for public funding recovery.  Would it be possible for our president to say, "our plan, after making proportionately enormous sacrifices to the state deficit for the umptheeth time, is to rebuild funding to the $3 billion level by 2013-2014, and $4 billion by two years after that. Otherwise, I truly hate to say, we will be looking at $20,000 tuition for undergraduates.  Nobody wants that, but we have a duty to our students to protect quality, so we will do that if the state forces us to."
• Presentation of UC, CSU, and the CCC as a counter-cyclical economic stimulus.   This is a no-brainer.  Jerry Brown is taking up the Arnold Herbert Hoover non-stimulation of the California economy that the last governor got such a good start on. All higher ed leaders should do this every chance they get.  People give a vote of half-confidence to austerity because the folks in charge offer no alternative.
• A statement about the educational emergency. The deep crisis is not the budget crisis, it's the education crisis.  It's also the public services crisis --the meltdown in the high quality infrastructure and services that enable the creative, satisfied, productive population of today and tomorrow, with higher education being Exhibit A. California educational attainment has crashed, and both social and economic decline are already following. This has to stop. If we wait until the economy recovers, the economy isn't going to recover.

Somebody recently pointed out that institutions and societies don't fail because they never get second chances. They fail because they blow their second chances, and their third and fourth and fifth and sixth chances too.  Brown's budget is another chance to make our case, and Mark Yudof's interview suggests UCOP is somewhat more ready not to miss it.

They will need every last one of us to help them.