- The new budget agreement is built upon the cuts that were already imposed in March. For Higher Ed this fact means $500 Million in cuts for UC and CSU each as well $400 Million cut for the Community College System. The budget does nothing that I can see to restore funding for health care for the poor and elderly, continues to squeeze the K-12 system, significantly cuts the Calworks program, and accepts the cuts to the state's Court systems.
- Based on additional revenues that have come to the state so far this year, the budget assumes a very optimistic revenue scenario for the rest of the year. But if the revenue estimates prove unrealistic then there are triggers for additional cuts. These include an additional $100 Million in cuts for both UC and CSU, the possibility of further cuts to K-12 and a further shortening of the school year.
- As a result, it is more than conceivable then that both UC and CSU will end up with $750 Million dollars in cuts by the end of the fiscal year.
- Brown and the Democrats are talking about putting revenue initiatives on the ballot in November of 2012. The Republicans are sure to counter with attacks on pensions and calls for a strict spending cap. It will be a very difficult election battle and one that everyone needs to attend to.
- Indeed, perhaps the only success in this failure is that the Republicans were so zealous in their refusal to consider having an election on Brown's tax extensions (a vote there was no guarantee Brown would carry this fall) that Brown did not give them their demands on pensions and spending caps. The latter in particular would have ensured the decay of governmental services in the state and would have, almost inevitably destroyed what remains of public K-12 education.
Showing posts with label budget cuts. Show all posts
Showing posts with label budget cuts. Show all posts
Tuesday, June 28, 2011
She Knows There's No Success Like Failure And That Failure's No Success At All
So it appears that we will have a budget either today or tomorrow. The Governor has given up his search for phantom Republican support and has agreed to sign a slightly modified version of the budget that the Democrats in the Legislature passed a few weeks ago. It is not a pretty picture.
Sunday, May 15, 2011
Change the Culture of Helplessness
I'm grateful to Cloudminder for a steady stream of UC news updates: check out this past busy UC week. Berkeley's Daily Cal has been providing coverage of management and finance issues that is as good or better than the state's daily newspapers. See this piece on UC's decreasing net assets, for example.
But staying in the steady stream of dismal news does make it harder to remember that it doesn't have to be like this. I can still imagine an Arnold Schwarzenegger who forced a state funding growth ceiling on UC and CSU via the Compact but who did not then abandon it unilaterally in 2008. I can imagine a Board of Regents whose members get close to a couple of local campuses and use independent information to assess UCOP reports, and who evaluate solutions offered by faculty, students, and staff. I can imagine a UCOP that decides that transparency with more state trust is better for revenues than opacity with less state trust, and that makes a real long-term effort to explain the details of the budget, including answering questions like why basic arithmetic doesn't back up core claims such as the amount the state gives to UC per student each year (supposedly $7200, page 3). I can imagine a state legislature that would allow higher ed revenues to grow at the same rate as state income (if this had happened since 1990 UC would have $6 billion in state funding rather than be looking $2.5 billion). I can imagine a state population that would be willing to pay the same share of its income in higher education taxes that it did twenty years ago, and not closer to the half that share that it pays now (chart 2d).
The supposed impossibility of that version of California is not a fact of nature. It has been and is continually created by the decisions the major players make on a daily basis. This includes UC’s Regents and Office of the President. In these cases, their agency is regularly concealed behind a consistent strategy of blame-shifting onto the state legislature and, behind them, the voting public and their alleged universal rejection of the very concept of a public good. The university's decline has been accelerated by a culture of helplessness at the top, one which assigns blame elsewhere and helps to demobilize its own community.
But staying in the steady stream of dismal news does make it harder to remember that it doesn't have to be like this. I can still imagine an Arnold Schwarzenegger who forced a state funding growth ceiling on UC and CSU via the Compact but who did not then abandon it unilaterally in 2008. I can imagine a Board of Regents whose members get close to a couple of local campuses and use independent information to assess UCOP reports, and who evaluate solutions offered by faculty, students, and staff. I can imagine a UCOP that decides that transparency with more state trust is better for revenues than opacity with less state trust, and that makes a real long-term effort to explain the details of the budget, including answering questions like why basic arithmetic doesn't back up core claims such as the amount the state gives to UC per student each year (supposedly $7200, page 3). I can imagine a state legislature that would allow higher ed revenues to grow at the same rate as state income (if this had happened since 1990 UC would have $6 billion in state funding rather than be looking $2.5 billion). I can imagine a state population that would be willing to pay the same share of its income in higher education taxes that it did twenty years ago, and not closer to the half that share that it pays now (chart 2d).
The supposed impossibility of that version of California is not a fact of nature. It has been and is continually created by the decisions the major players make on a daily basis. This includes UC’s Regents and Office of the President. In these cases, their agency is regularly concealed behind a consistent strategy of blame-shifting onto the state legislature and, behind them, the voting public and their alleged universal rejection of the very concept of a public good. The university's decline has been accelerated by a culture of helplessness at the top, one which assigns blame elsewhere and helps to demobilize its own community.
Here are some examples from the March Regents' meeting.
The chair of the Board of Regents declared the restoration of state funding to be unrealistic, and in so doing took a major step towards creating that reality and locking it in. Sacramento Democrats and Republicans had their suspicion confirmed that UC would not hold them to a higher funding standard, and would not put up a fight against the current cuts. Similarly, Mark Yudof's recent testimony to the state Senate budget committee focused on avoiding a further $500 million cut as part of the so-called "all-cuts" budget, and tacitly accepted the first $500 million as a given.
In keeping with Chair Gould’s aforementioned diktat, Regent Richard Blum laid out a high-tuition plan as an absolute necessity - no further debate desired or required. I calculated that his plan would mean near-term tuition increases to over $20,000 (in-state) and medium-term increases to $40,000. The lower figure is the minimum required to maintain current levels of educational investment without the first $500 million cut. Rather than stating and tweeting the disastrous tuition news every day, UCOP spent all winter and spring saying that it planned no tuition increases - unless the additional $500 million cut took place. The effect was to muffle the only UC constituency with real influence with California's media, financially desperate undergraduate students. Having lost another five-month opportunity for opposition- and movement-building around public funding, UCOP then placed on next week's Regents agenda a proposal for a new 32% tuition increase, which would bring 2011-12 tuition to over $16,000, plus campus and registration fees (see next-to-last paragraph). UCOP waited until it could present the increase as forced upon them by a political reality over which they and their allies have no control.
Then there's the issue of UC's declining educational quality. UC Irvine Chancellor Michael Drake said that his campus is
These comments are extremely grave. Within American management culture, which requires continuous displays of problem-solving resolve to leaven its peculiar fatalism, they are a declaration of an educational emergency. They were accompanied by descriptions of the decline of the ability to develop individual creative capacities through face-to-face interactions, such as the wholesale elimination of the Irvine campus’s freshman seminar program.
But the state has heard all of this before. The decline has not yet occurred, is not currently occurring, but may occur in the future if the cuts are not brought to an end. Even Chancellor Drake muddled his message by saying that UC is in danger of moving from A+ to A. The vast majority of Californians, whose lifestyles are hovering around C+, would understandably accept UC “A”. Similarly, the financial statements in the Chancellor’s declarations suggest that the budget shortfalls can be handled with regrettable but nonetheless manageable layoffs that have already taken place. The non-UC reader would think, well they’re tightening their belts and fixing their IT problems and we’ll end up with a UC that gets an A for only $2.5 billion in state funds. There is no screaming on our end that says no it cannot be this way and also no it need not be this way. Refusing to take responsibility for having already damaged educational quality with its past political decisions, UCOP warns of decline this time. It is playing Chicken Little with the state.
In contrast to managerial fatalism, faculty members have been putting up a very good fight. I will have to do a separate post to discuss valuable pieces that came out this last week in The Nation and the London Review of Books, and same goes for work closer to home, such as the immediate past chair of the Senate’s systemwide Committee on Planning and Budget (UCPB) Peter Krapp’s excellent piece on why we need to keep the University of California unstratified and whole. But UC Uncut and UC Whole both entail the continuation of the Board of Regents and the Office of the President. At the moment, they are not the system’s strongest points. Whatever the specific errors of campus leaders, one can imagine campuses moving forward via chancellor-presidents with the local knowledge and on-site accountability of campus administrators. You can get a feeling for this by reading the testimony of Chancellors Birgeneau, Blumenthal, and Drake in March.
But local knowledge and direct accountability are largely lacking at the Regental-UCOP level. This problem will need to be solved if UC is going to go forward as a single system.
The chair of the Board of Regents declared the restoration of state funding to be unrealistic, and in so doing took a major step towards creating that reality and locking it in. Sacramento Democrats and Republicans had their suspicion confirmed that UC would not hold them to a higher funding standard, and would not put up a fight against the current cuts. Similarly, Mark Yudof's recent testimony to the state Senate budget committee focused on avoiding a further $500 million cut as part of the so-called "all-cuts" budget, and tacitly accepted the first $500 million as a given.
In keeping with Chair Gould’s aforementioned diktat, Regent Richard Blum laid out a high-tuition plan as an absolute necessity - no further debate desired or required. I calculated that his plan would mean near-term tuition increases to over $20,000 (in-state) and medium-term increases to $40,000. The lower figure is the minimum required to maintain current levels of educational investment without the first $500 million cut. Rather than stating and tweeting the disastrous tuition news every day, UCOP spent all winter and spring saying that it planned no tuition increases - unless the additional $500 million cut took place. The effect was to muffle the only UC constituency with real influence with California's media, financially desperate undergraduate students. Having lost another five-month opportunity for opposition- and movement-building around public funding, UCOP then placed on next week's Regents agenda a proposal for a new 32% tuition increase, which would bring 2011-12 tuition to over $16,000, plus campus and registration fees (see next-to-last paragraph). UCOP waited until it could present the increase as forced upon them by a political reality over which they and their allies have no control.
Then there's the issue of UC's declining educational quality. UC Irvine Chancellor Michael Drake said that his campus is
Poised on the precipice of a negative change in quality, which, if allowed to occur, will require a generation to remedy. He praised the excellence of the UC Irvine faculty, but noted that faculty members now spend a great deal of time mitigating damage caused by cuts rather than building for the future. He described the situation of the University as one of slow decay rather than growth. Most effort is focused on protecting the educational path for students; innovation and growth are not being fostered.
These comments are extremely grave. Within American management culture, which requires continuous displays of problem-solving resolve to leaven its peculiar fatalism, they are a declaration of an educational emergency. They were accompanied by descriptions of the decline of the ability to develop individual creative capacities through face-to-face interactions, such as the wholesale elimination of the Irvine campus’s freshman seminar program.
But the state has heard all of this before. The decline has not yet occurred, is not currently occurring, but may occur in the future if the cuts are not brought to an end. Even Chancellor Drake muddled his message by saying that UC is in danger of moving from A+ to A. The vast majority of Californians, whose lifestyles are hovering around C+, would understandably accept UC “A”. Similarly, the financial statements in the Chancellor’s declarations suggest that the budget shortfalls can be handled with regrettable but nonetheless manageable layoffs that have already taken place. The non-UC reader would think, well they’re tightening their belts and fixing their IT problems and we’ll end up with a UC that gets an A for only $2.5 billion in state funds. There is no screaming on our end that says no it cannot be this way and also no it need not be this way. Refusing to take responsibility for having already damaged educational quality with its past political decisions, UCOP warns of decline this time. It is playing Chicken Little with the state.
In contrast to managerial fatalism, faculty members have been putting up a very good fight. I will have to do a separate post to discuss valuable pieces that came out this last week in The Nation and the London Review of Books, and same goes for work closer to home, such as the immediate past chair of the Senate’s systemwide Committee on Planning and Budget (UCPB) Peter Krapp’s excellent piece on why we need to keep the University of California unstratified and whole. But UC Uncut and UC Whole both entail the continuation of the Board of Regents and the Office of the President. At the moment, they are not the system’s strongest points. Whatever the specific errors of campus leaders, one can imagine campuses moving forward via chancellor-presidents with the local knowledge and on-site accountability of campus administrators. You can get a feeling for this by reading the testimony of Chancellors Birgeneau, Blumenthal, and Drake in March.
But local knowledge and direct accountability are largely lacking at the Regental-UCOP level. This problem will need to be solved if UC is going to go forward as a single system.
Thursday, March 31, 2011
Fight or Flight?
It’s bad enough to live through budget crises that go on for years at a time while paralyzing planning and development of every kind. We also have to deal with leadership problems, centering now on the fact that neither the Regents nor UCOP nor the campus chancellors have credible plans for reversing or coping with the relentless grinding away of the university’s public funding base. The failure of Jerry Brown’s doomed, misguided effort to exchange massive new cuts for a public vote on tax extensions means that UC and the state's other higher education segments will need to fight like dogs to avert a major budgetary meltdown. Brown is unfornately on track to undo in a couple of years what his father’s generation—among others--took decades to build.
But will UC fight? Its leaders won’t, if my conversation with a vocal senior UC offical reflects the wider thinking.
This official contacted me because he objected to a core claim in my recent posts about the Regents (here and here). I very much appreciated the outreach and dialgoue, and am not doing justice to the full range of our friendly conversation, but am focusing on the overriding theme.
He asked at the start, "what makes you think that there's money in Sacramento, and even if there were, that they would give any if it to UC"? He then ran through a detailed analysis of California’s liabilities, all very authoritatively done and no doubt correct. He emphasized how much higher the liabilities are when you use accrual accounting rather than cash accounting. He than asked me how I could suggest that UC could ever go back to the state.
I offered him three reasons.
First, that a much poorer California first built a great UC, and we can do this again in the face of our liabilities. I mentioned my depression era grandparents paying for a system whose expansion allowed my mother and father to be first-generation college students, and also cited stats about declining tax effort in relation to personal income, a declining share of the state budget as a percentage of aggregate income, lower business taxes as a share of the total (slide 7), etc. A relatively poor California built this great thing, and we can certainly do at least as well as they do. I called funding cuts a 20-year policy choice that now needs to be undone. He thought this was too simple, and asked if I had experience in Sacramento. I told him about a faculty group visit too various legislators in 2008. We agreed on the actual attitudes in Sacramento, but not on whether the attitudes could be changed.
Second, I made the point that UCOP and the Regents have been deflating state support by saying yes it's terrible that we are being cut but we can replace public with private funds. The legislature doesn't just "hate UC," as he put it, but thinks that it can cut UC without causing much damage. They think the kids from Simi Valley will pay $14k instead of $10.5 k, no big deal, UC will still be the greatest public university in the world as UCOP always says and we need the money for other stuff like healthcare. My conversation partner scoffed at this explanation, saying "you sound like that guy who came up to me at the Regents meeting and said if you just stopped talking in public about how we have other sources the legislature would stop cutting us." I said that guy was right.
I made the general point that you can't insert the word "just" into a sentence and get an accurate paraphrase of the faculty's position on this. We all know it's complicated and that we're undoing years of mixed messages, a process that will itself take years. But the first thing to do is to stop sending the mixed messages (we will cut but won't hurt the instructional program as Nathan Bostrom recently told a newspaper). The next thing to do is to just tell the truth: the cuts are radically downgrading the University. People really don't know the damage that these cuts do to the university. He thought they did . . . I said this brings us to my third argument, which is that the Regents don't have any choice but to change direction. They don't want to cut quality, of course, so they have to restore public funding. The alternative, if they don't, is tuition going to $40,000 in a few years. So either we say great, let's go there, or we go back to the state and say not restoring money is not an option. (UC President Mark Yudof has started gesturing in this direction.)
I honestly don't know whether he took this in or not. He talked about his son paying less for his semester at a UC campus than for his time at his regular Ivy League campus, and was it right that he, who could pay more, would be subsidized by the taxpayers? I said yes it is right, because it is the basis of a UC that serves the state as a whole, and it produces a UC with more class and race diversity than all of the Ivy League colleges put together or any other private, or any other semi-private public like Michigan, measured in Pell Grants among other things. I mentioned the principal of mutualization, which most Americans seem to have forgotten although Hollywood used to make widely popular movies on the subject. If you want to get people to actually use a service, you lower the price by sharing the cost across the widest percentage of the population, and this understanding-- service to the whole state-- needs to be rebuilt.
The most interesting part was near the end. I said it's Sacramento or 40,000 dollars, that has to be the Regents consistent message. He said that was just a rhetorical point. I said it's a quantitative point, and if my arithmetic is wrong somebody needs to fix it. It would also help the public to understand their real choice: they think the choice is between higher taxes or a great UC at $14,000 instead of $10,500, but they're wrong. Since they don't understand the real choice, how can we expect them to make a real decision? Since we've never said "hike your taxes or get UC B+ at $40,000," why should they have ever vote a hike? I asked him, Will you use the $40k number? No I won't he replied, it won't work. Why not at least try it, I asked? This isn't just hypothetical - a unit like Berkeley Law that made top quality defined by rankings as its only priority fought tirelessly to get its tuition to $40,000. This official like Regent Blum is pro high-tuition, but when I said "high tuition" = $40,000 he didn't want to go there. Food for thought is this: I don't think he doesn’t want to go there because he thinks the number is wrong. My hunch is that he doesn’t want to risk creating public opposition to continuous but not-too-shocking annual tuition increases, ones that will create UC B+ that we will call UC A- (except at Berkeley and UCLA), for a modest in-state price of $20,000. He invited me to start visiting Sacramento, and I said with pleasure. I added, I think you and I should go there together and do a joint presentation where we talk about tuition at $40,000. He certainly didn't go for this, and he wound the conversation down at this point.
My own views on this are simple.
First, the voters deserve to have numbers attached to the fatal choices they are in the process of making.
Second, the Senate should push for an extension of the Regents’ budget presentation that formalizes the real numbers on projected tuition increases that the student Regent had to coax apologetically out of Nathan Bostrom.
Third, faculty should demand and receive access to divisional-level campus budgets and planning scenarios so they can offer informed comment and make intelligent decisions about their own careers.
Finally, the financial brains on the Board of Regents, with their experience in creating and investing in large liabilities, should help the state solve its liability issues in a way that doesn't wreck its higher education system.
Faculty, staff, and students are going to need to mobilize themselves on budget policy like they never have before. I really don’t see any other way of avoiding acceleratign decline.
But will UC fight? Its leaders won’t, if my conversation with a vocal senior UC offical reflects the wider thinking.
This official contacted me because he objected to a core claim in my recent posts about the Regents (here and here). I very much appreciated the outreach and dialgoue, and am not doing justice to the full range of our friendly conversation, but am focusing on the overriding theme.
He asked at the start, "what makes you think that there's money in Sacramento, and even if there were, that they would give any if it to UC"? He then ran through a detailed analysis of California’s liabilities, all very authoritatively done and no doubt correct. He emphasized how much higher the liabilities are when you use accrual accounting rather than cash accounting. He than asked me how I could suggest that UC could ever go back to the state.
I offered him three reasons.
First, that a much poorer California first built a great UC, and we can do this again in the face of our liabilities. I mentioned my depression era grandparents paying for a system whose expansion allowed my mother and father to be first-generation college students, and also cited stats about declining tax effort in relation to personal income, a declining share of the state budget as a percentage of aggregate income, lower business taxes as a share of the total (slide 7), etc. A relatively poor California built this great thing, and we can certainly do at least as well as they do. I called funding cuts a 20-year policy choice that now needs to be undone. He thought this was too simple, and asked if I had experience in Sacramento. I told him about a faculty group visit too various legislators in 2008. We agreed on the actual attitudes in Sacramento, but not on whether the attitudes could be changed.
Second, I made the point that UCOP and the Regents have been deflating state support by saying yes it's terrible that we are being cut but we can replace public with private funds. The legislature doesn't just "hate UC," as he put it, but thinks that it can cut UC without causing much damage. They think the kids from Simi Valley will pay $14k instead of $10.5 k, no big deal, UC will still be the greatest public university in the world as UCOP always says and we need the money for other stuff like healthcare. My conversation partner scoffed at this explanation, saying "you sound like that guy who came up to me at the Regents meeting and said if you just stopped talking in public about how we have other sources the legislature would stop cutting us." I said that guy was right.
I made the general point that you can't insert the word "just" into a sentence and get an accurate paraphrase of the faculty's position on this. We all know it's complicated and that we're undoing years of mixed messages, a process that will itself take years. But the first thing to do is to stop sending the mixed messages (we will cut but won't hurt the instructional program as Nathan Bostrom recently told a newspaper). The next thing to do is to just tell the truth: the cuts are radically downgrading the University. People really don't know the damage that these cuts do to the university. He thought they did . . . I said this brings us to my third argument, which is that the Regents don't have any choice but to change direction. They don't want to cut quality, of course, so they have to restore public funding. The alternative, if they don't, is tuition going to $40,000 in a few years. So either we say great, let's go there, or we go back to the state and say not restoring money is not an option. (UC President Mark Yudof has started gesturing in this direction.)
I honestly don't know whether he took this in or not. He talked about his son paying less for his semester at a UC campus than for his time at his regular Ivy League campus, and was it right that he, who could pay more, would be subsidized by the taxpayers? I said yes it is right, because it is the basis of a UC that serves the state as a whole, and it produces a UC with more class and race diversity than all of the Ivy League colleges put together or any other private, or any other semi-private public like Michigan, measured in Pell Grants among other things. I mentioned the principal of mutualization, which most Americans seem to have forgotten although Hollywood used to make widely popular movies on the subject. If you want to get people to actually use a service, you lower the price by sharing the cost across the widest percentage of the population, and this understanding-- service to the whole state-- needs to be rebuilt.
The most interesting part was near the end. I said it's Sacramento or 40,000 dollars, that has to be the Regents consistent message. He said that was just a rhetorical point. I said it's a quantitative point, and if my arithmetic is wrong somebody needs to fix it. It would also help the public to understand their real choice: they think the choice is between higher taxes or a great UC at $14,000 instead of $10,500, but they're wrong. Since they don't understand the real choice, how can we expect them to make a real decision? Since we've never said "hike your taxes or get UC B+ at $40,000," why should they have ever vote a hike? I asked him, Will you use the $40k number? No I won't he replied, it won't work. Why not at least try it, I asked? This isn't just hypothetical - a unit like Berkeley Law that made top quality defined by rankings as its only priority fought tirelessly to get its tuition to $40,000. This official like Regent Blum is pro high-tuition, but when I said "high tuition" = $40,000 he didn't want to go there. Food for thought is this: I don't think he doesn’t want to go there because he thinks the number is wrong. My hunch is that he doesn’t want to risk creating public opposition to continuous but not-too-shocking annual tuition increases, ones that will create UC B+ that we will call UC A- (except at Berkeley and UCLA), for a modest in-state price of $20,000. He invited me to start visiting Sacramento, and I said with pleasure. I added, I think you and I should go there together and do a joint presentation where we talk about tuition at $40,000. He certainly didn't go for this, and he wound the conversation down at this point.
My own views on this are simple.
First, the voters deserve to have numbers attached to the fatal choices they are in the process of making.
Second, the Senate should push for an extension of the Regents’ budget presentation that formalizes the real numbers on projected tuition increases that the student Regent had to coax apologetically out of Nathan Bostrom.
Third, faculty should demand and receive access to divisional-level campus budgets and planning scenarios so they can offer informed comment and make intelligent decisions about their own careers.
Finally, the financial brains on the Board of Regents, with their experience in creating and investing in large liabilities, should help the state solve its liability issues in a way that doesn't wreck its higher education system.
Faculty, staff, and students are going to need to mobilize themselves on budget policy like they never have before. I really don’t see any other way of avoiding acceleratign decline.
Friday, March 4, 2011
Day of Action Against Cuts
Here are some links (hat tip to Bob S) to coverage of the National Day of Action to defend higher education against rampant and constant cuts.
UCLA protests
Santa Cruz
Berkeley
Irvine
Dail Cal coverage of other protests
The small size of the UC protests may flow from UC President Mark Yudof's repeated assurances that UC students will not see another tuition increase of the 32% variety that provoked much larger protests in November of 2009.
Given the approaching end of the federal stimulus money, cost increases in areas like employer pension contributions, and the long series of cuts that have already been made, the $500 million Jerry Brown cuts will logically create the worst course access and worst student: instructor ratios in living memory.
UCOP's calculations (slide 16) show that $500 million is the amount a new 32% tuition increase would raise. The same amount of damage is being done to students that was done in 2009. Their payment is just taking a different form.
Graduation delays and massively reduced instructor feedback are only the most obvious damage being done to quality. Public university students need to compete against private school students who can improve their skills through individualized monitoring while creating coherent sequences of courses that lead to a recognizable expertise. UC is not enabling its students to compete with private university graduates in feedback, coherence, sequencing, or most other ingredients of intellectual development.
In comparing the careers of equally talented and motivated people, will we have to start talking about the "public university disadvantage"? Will we be needing job affirmative action for all public university graduates?
Mark Yudof's demobilization of students has neutralized one of his big political problems. But it would be smarter to allow justifiably outraged students to help him pressure Sacramento to support higher education rather than continue to wreck it.
UCLA protests
Santa Cruz
Berkeley
Irvine
Dail Cal coverage of other protests
The small size of the UC protests may flow from UC President Mark Yudof's repeated assurances that UC students will not see another tuition increase of the 32% variety that provoked much larger protests in November of 2009.
Given the approaching end of the federal stimulus money, cost increases in areas like employer pension contributions, and the long series of cuts that have already been made, the $500 million Jerry Brown cuts will logically create the worst course access and worst student: instructor ratios in living memory.
UCOP's calculations (slide 16) show that $500 million is the amount a new 32% tuition increase would raise. The same amount of damage is being done to students that was done in 2009. Their payment is just taking a different form.
Graduation delays and massively reduced instructor feedback are only the most obvious damage being done to quality. Public university students need to compete against private school students who can improve their skills through individualized monitoring while creating coherent sequences of courses that lead to a recognizable expertise. UC is not enabling its students to compete with private university graduates in feedback, coherence, sequencing, or most other ingredients of intellectual development.
In comparing the careers of equally talented and motivated people, will we have to start talking about the "public university disadvantage"? Will we be needing job affirmative action for all public university graduates?
Mark Yudof's demobilization of students has neutralized one of his big political problems. But it would be smarter to allow justifiably outraged students to help him pressure Sacramento to support higher education rather than continue to wreck it.
Sunday, January 16, 2011
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:
They will need every last one of us to help them.
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."
- 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.
- 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.
They will need every last one of us to help them.
Wednesday, January 12, 2011
Pay Even More to Get Even Less
I have updated the chart of the University of California's funding pathways to reflect the budget proposed by Governor Brown this week, as a companion to Michael's policy analyses (1 & 2). The first version appeared in the Futures Report, was updated for the Cuts Report, and was updated most recently to reflect Arnold Schwarzenegger's May Revision last year.
The Benchmark (blue diamonds) reflects a universe in which the state's research university finds its revenue going up and down in an exact reflection of per capita personal income. The latter measures a population's ability to pay. Since California per capita income declined 3.4% in 2009 (for the first time in all recent recessions), the benchmark dips to reflect the previous year's conditions. In some socially rational universe, this condition would reflect a normal but not exceptional commitment to maintaining the society's steady and even improving educational levels.
The 1990 Pathway (green line) reflects a hypothetical commitment the state's leaders might have made in 2005, when they formed the Compact for Higher Education instead, to restore "Master Plan" levels of funding. Yellow is a more modest recovery of the 2001 Pathway after the cuts of the decade's first recession. The Funding Freeze reflects a scenario in which the state consciously decides to cap its commitment of general funds and "privatize" systematically. Finally, the red line is where we have actually been.
It is worth noting the following features of our situation:
Whether last year or this, every potential ingredient of social development has now been reduced to a question of budget cuts or tax increases. This blocked non-debate has completely denatured California's ability to function according to its self-image as a creative and cutting-edge state. The point of education and the goals of society -- never mind the famous California pursuits of enlightenment and fulfillment -- have been entirely set aside. Jerry Brown helped invent this political language in the 1970s as the state's first austerity Democrat. I like his personal cheapness, but does he have anything to say besides "we need to balance the budget?
This political game is shortchanging society. We will be writing in the next week about the complete reframing that needs to be done, and that apparently Jerry Brown will not be helping with.
The 1990 Pathway (green line) reflects a hypothetical commitment the state's leaders might have made in 2005, when they formed the Compact for Higher Education instead, to restore "Master Plan" levels of funding. Yellow is a more modest recovery of the 2001 Pathway after the cuts of the decade's first recession. The Funding Freeze reflects a scenario in which the state consciously decides to cap its commitment of general funds and "privatize" systematically. Finally, the red line is where we have actually been.
It is worth noting the following features of our situation:
- Jerry Brown's proposed cut to UC (and to CSU) of $500 million is a 20% one-year cut in the current general fund revenue. This is similar in scale to Arnold Schwarzenegger's drastic 2008-09 cut. He is proposing a repeat of Schwarzenegger's disastrous cuts.
- Brown is continuing Schwarzenegger's race to wind up below the worst-case "funding freeze" scenarioBrown is worst . than the worst-case scenario, however, because that assumed that tuition would be jacked up rapidly to replace lost public funds. That will not happen to (or for) UC or CSU).
- How much would tuition have to rise to recovery $500,000,000? If it were recuperated entirely with undergraduates (about 173,000), each full-time student would need to make a net contribution of another $2,900. But this is the amount after 33% of the additional tuition is returned to financial aid. So the tuition increase for 2011-12 would be $4379 on top of the systemwide average of 12,150 or about $16,900 for 2011-12. Maintaining existing levels of education with tuition increases poses obvious hardships and will reduce access, further lowering the state's general level of attainment.
- This year's new low in pay more to get less is contingent on voters passing tax extensions in a special election. Mark Baldassare, an experienced California pollster, was on the Patt Morrison show expressing reasonable doubt that Brown will succeed where Arnold failed. The cut could be much larger.
Whether last year or this, every potential ingredient of social development has now been reduced to a question of budget cuts or tax increases. This blocked non-debate has completely denatured California's ability to function according to its self-image as a creative and cutting-edge state. The point of education and the goals of society -- never mind the famous California pursuits of enlightenment and fulfillment -- have been entirely set aside. Jerry Brown helped invent this political language in the 1970s as the state's first austerity Democrat. I like his personal cheapness, but does he have anything to say besides "we need to balance the budget?
This political game is shortchanging society. We will be writing in the next week about the complete reframing that needs to be done, and that apparently Jerry Brown will not be helping with.
Monday, December 20, 2010
The Debt Crisis and the Austerity Trap
State officals are caught in a mental loop, and it is nicely visualized by state treasurer Bill Lockyer's forlorn op-ed in the Los Angeles Times. Arguing that "California Isn't Broken," and anxious to head off implausible suggestions that the state could default on its debt, Lockyer and coauthor Stephen Levy write,
The article goes on to debunk the myths that California has lost more jobs and businesses than other states, that its decline is worse than that of the country's, and that its structural budget deficit is caused by runaway spending:
Jerry Brown is the original small-government Democrat: in the 1970s he was already running as an austerity governor for the "era of limits" he later proclaimed in Cedar Rapids during his presidential campaign tour in January, 1976. His promise this month to cut the governor's budget was first made in his inaugural address in January, 1975. Circumstances have not given Brown much reason to change his mind. He has said, "The depressing spirit of the age ungratefully feeds off the boldness of the past. Where there should be saving for the future, I see frantic borrowing." Thee occasion was his second inaugural address in 1979.
Arnold Schwarzenegger built his governorship around repeated calls to cut state spending. Brown just recently promised to do the same, only worse. Arnold's version was more "blood makes the grass grow." Or "throw mama from the train." Jerry's version is "Curb Your Enthusiasm." But the implication is very Arnoldian: Brown may propose mid-year cuts in all sectors of state government. He assured K-12 that this would happen to them. We may be facing the same thing at UC and CSU: general fund cuts mid-year, perhaps the return of employee furloughs to make up for them, possibly mid-year tuition hikes, who knows?
What is Brown going to offer that's different from Arnold? In his presentation, he moved from budget basics to an illustration of persistent deficits (slide 7), to a clear portrait of declining expenditures (slide 10), to a conclusion that stressed that California is a Bottom-5 state in major public sector measures, including ratio of state employees to population (slide 16) and student-teacher ratios (slide 17). The strategy seems to be what driver's education courses used to call Red Asphalt: show the 15 year olds pictures of bloody car wrecks so that we are scared into driving well by seeing the deadly consequences of our careless acts. Show the causal connection between budget cuts and lowered educational resources.
Educationally and democratically this is the right strategy: don't tell the people the answer you already have, but lay out well-organized analysis that allows them to reach their own conclusions. Others have tried this before on this same topic of California's public spending being low rather than high. Los Angeles Times columnist Michael Hiltzik made an excellent short case using LAO data in May 2009. It will help to have the state's governor pulling in the same direction. But what about the causal case between public funding cuts and economic decline -- not just less government but less economy? How to work in personal hardship and stunted hopes?
The discussion raised a vital issue, but a different one: the burden of debt. Lockyer did most of the lifting here. He showed that during the governorship of Arnold Schwarzenegger, the state's debt nearly tripled from $34 billion in 2003 to $91 billion in 2011 (slide 1), and that debt service has tripled as well, to over $6 billion a year or nearly 7% of state general fund revenues (slide 2). The pace of this increase has caused the state's bond rating to fall to A1 (slide 5), and has added over 1 percentage point (110 basis points) to the interest California needs to pay on this interest (slide 8).
These numbers reveal the extent of the disaster for the citizens of the state. The increase in annual debt service during the Schwarzenegger administration of about $3 billion is about the same as what the state spends on all programs for the developmentally disabled, and what it spends on the University of California. In other words, during the Schwarzenegger era, the state came to pay the annual costs for an entire second University of California entirely to the holders of its new public debt.
The Brown-Clinton tradition of Austerity Democrats has a history responding to "check" by taking pieces off the board. Some members of their party are trying to head this off by painting the demand for austerity as a Republican trick: the Republican right creates public insolvency on purpose so it can cripple government and "drown it in the bathtub," in right-wing activist Grover Norquist's famous phrase. Progressives also point out that this is happening on the federal level with the extension of the Bush tax cuts, whose stimulus effect will be far outweighed by the nearly $1 trillion in new deficits it will create. The same is true in Europe, particularly in bastions of Anglo-American-style financialized capitalism like Ireland and Britain, where a crisis of private debt that threatened massive bank insolvency led to simultaneous 100% bailouts of private investors and simultaneous cuts in the public sector to pay for it. Ross McKibbin summed this up in a piece on Tory strategy in the UK by saying, "the crisis allowed the Conservatives to transform a crisis of the banks into a crisis of the welfare state." This is precisely the crisis that Brown is inheriting in California, and it is important to point this out.
But the cure depends entirely on ending the current Hoovermania with countercyclical policies. My claim here is that we need Red Asphalt 2 - the movie that shows not what happens when you don't slow down and pay your debt, but what happens when you don't repave the roads where you might be tempted to drive too fast. There's one slide in the Brown budgetfest that gets at this.
This chart suggests that given current policy -- the continuation of Arnold Schwarz- enegger's program of borrow and cut, , the state will not get back to its 2007 employment level until 2015 - with a significant larger population. Given how young the state is, and how poor our public services are, this is a death-spiral that leads to social unrest sooner rather than later, and to the end of California as an advanced society.
This is the theme Brown needs to lead with: Rebuild or Die.
Rebuilding - specific versions, prominently including higher education - requires spending. Hence, and only hence, there must be spending.
During the current fiscal year, general fund revenues are expected to total $89.4 billion. Education spending under Proposition 98 will total $36 billion. That leaves $53.4 billion available to pay debt service on bonds — more than eight times the $6.6 billion the state will need.Thus is raised the specter, in its very denial, that the state might spend the entirety of its non Prop 98 money on servicing its own debt.
The article goes on to debunk the myths that California has lost more jobs and businesses than other states, that its decline is worse than that of the country's, and that its structural budget deficit is caused by runaway spending:
Thirty years ago, general fund expenditures totaled about $7.43 for every $100 of personal income. In the 2009-10 fiscal year, that ratio was almost $2 less, at $5.52 for every $100 of personal income. In the current fiscal year, per capita general fund expenditures will total $2,246, less than the $2,289 spent 10 years ago and roughly equal to the inflation-adjusted level of 15 years ago.But then what? The obvious question is, "so what's wrong with spending less"? The next obvious question is, since we still have a deficit, why not spend still less than we do right now? These are entirely rational questions for our austerity culture, and they need direct and concrete answers. Nobody is going to care about cuts in general unless Lockyer, Jerry Brown and the new Sacramento order can rekindle belief in a causal connection in which cuts in public investment causes economic decline. But how will they, and who will help them?
Jerry Brown is the original small-government Democrat: in the 1970s he was already running as an austerity governor for the "era of limits" he later proclaimed in Cedar Rapids during his presidential campaign tour in January, 1976. His promise this month to cut the governor's budget was first made in his inaugural address in January, 1975. Circumstances have not given Brown much reason to change his mind. He has said, "The depressing spirit of the age ungratefully feeds off the boldness of the past. Where there should be saving for the future, I see frantic borrowing." Thee occasion was his second inaugural address in 1979.
Arnold Schwarzenegger built his governorship around repeated calls to cut state spending. Brown just recently promised to do the same, only worse. Arnold's version was more "blood makes the grass grow." Or "throw mama from the train." Jerry's version is "Curb Your Enthusiasm." But the implication is very Arnoldian: Brown may propose mid-year cuts in all sectors of state government. He assured K-12 that this would happen to them. We may be facing the same thing at UC and CSU: general fund cuts mid-year, perhaps the return of employee furloughs to make up for them, possibly mid-year tuition hikes, who knows?
What is Brown going to offer that's different from Arnold? In his presentation, he moved from budget basics to an illustration of persistent deficits (slide 7), to a clear portrait of declining expenditures (slide 10), to a conclusion that stressed that California is a Bottom-5 state in major public sector measures, including ratio of state employees to population (slide 16) and student-teacher ratios (slide 17). The strategy seems to be what driver's education courses used to call Red Asphalt: show the 15 year olds pictures of bloody car wrecks so that we are scared into driving well by seeing the deadly consequences of our careless acts. Show the causal connection between budget cuts and lowered educational resources.
Educationally and democratically this is the right strategy: don't tell the people the answer you already have, but lay out well-organized analysis that allows them to reach their own conclusions. Others have tried this before on this same topic of California's public spending being low rather than high. Los Angeles Times columnist Michael Hiltzik made an excellent short case using LAO data in May 2009. It will help to have the state's governor pulling in the same direction. But what about the causal case between public funding cuts and economic decline -- not just less government but less economy? How to work in personal hardship and stunted hopes?
The discussion raised a vital issue, but a different one: the burden of debt. Lockyer did most of the lifting here. He showed that during the governorship of Arnold Schwarzenegger, the state's debt nearly tripled from $34 billion in 2003 to $91 billion in 2011 (slide 1), and that debt service has tripled as well, to over $6 billion a year or nearly 7% of state general fund revenues (slide 2). The pace of this increase has caused the state's bond rating to fall to A1 (slide 5), and has added over 1 percentage point (110 basis points) to the interest California needs to pay on this interest (slide 8).
These numbers reveal the extent of the disaster for the citizens of the state. The increase in annual debt service during the Schwarzenegger administration of about $3 billion is about the same as what the state spends on all programs for the developmentally disabled, and what it spends on the University of California. In other words, during the Schwarzenegger era, the state came to pay the annual costs for an entire second University of California entirely to the holders of its new public debt.
The Brown-Clinton tradition of Austerity Democrats has a history responding to "check" by taking pieces off the board. Some members of their party are trying to head this off by painting the demand for austerity as a Republican trick: the Republican right creates public insolvency on purpose so it can cripple government and "drown it in the bathtub," in right-wing activist Grover Norquist's famous phrase. Progressives also point out that this is happening on the federal level with the extension of the Bush tax cuts, whose stimulus effect will be far outweighed by the nearly $1 trillion in new deficits it will create. The same is true in Europe, particularly in bastions of Anglo-American-style financialized capitalism like Ireland and Britain, where a crisis of private debt that threatened massive bank insolvency led to simultaneous 100% bailouts of private investors and simultaneous cuts in the public sector to pay for it. Ross McKibbin summed this up in a piece on Tory strategy in the UK by saying, "the crisis allowed the Conservatives to transform a crisis of the banks into a crisis of the welfare state." This is precisely the crisis that Brown is inheriting in California, and it is important to point this out.
But the cure depends entirely on ending the current Hoovermania with countercyclical policies. My claim here is that we need Red Asphalt 2 - the movie that shows not what happens when you don't slow down and pay your debt, but what happens when you don't repave the roads where you might be tempted to drive too fast. There's one slide in the Brown budgetfest that gets at this.
This chart suggests that given current policy -- the continuation of Arnold Schwarz- enegger's program of borrow and cut, , the state will not get back to its 2007 employment level until 2015 - with a significant larger population. Given how young the state is, and how poor our public services are, this is a death-spiral that leads to social unrest sooner rather than later, and to the end of California as an advanced society.This is the theme Brown needs to lead with: Rebuild or Die.
Rebuilding - specific versions, prominently including higher education - requires spending. Hence, and only hence, there must be spending.
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