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.

The Gilded 36 and What "Demoralizing" Really Means at UC

By Gregory Levine and Louise Fortmann
Crossposted with Sacramento Bee

On December 29, 2010 the San Francisco Chronicle reported that, "Three dozen of the University of California's highest paid executives are threatening to sue unless UC agrees to spend tens of millions of dollars to dramatically increase retirement benefits for employees earning more than $245,000."

Some of these "Gilded 36" receive salaries in excess of $500,000. All will receive sizable pensions, even without this increase, while their salaries, bonuses, and perks allow opportunities for additional retirement saving and investment. These are opportunities the majority of UC employees and Californians can only dream of.

In their letter to UC President Mark Yudof, these executives and deans stated that failure to increase their pension benefits would be "demoralizing" to them. We- faculty who teach and guide students towards careers and contributions to society- point to other, far more demoralizing trends on UC campuses: Tuition increases that force students to borrow more, take on second jobs, and withdraw before finishing their degrees; budget cuts that vaporize classes in key subjects, wipe out hours of library access, and leave unfixed broken chairs, projectors, and lavatories; layoffs of skilled staff that gut essential services; declining graduate student funding that leads the brightest applicants to choose private Universities over UC; realizing that teaching and working at UC does not mean that you can afford to send your own children to its campuses.

The question to ask the Gilded 36 goes beyond contracts and lawsuits: Can their demand for tens of millions of dollars in additional pension payout be justified morally and ethically given the fiscal shortfall facing California, when budget cuts imperil the instructional and research mission of UC, and when the UC employee pension faces a $21.6 Billion unfunded obligation that threatens the futures of thousands of UC employees and their families? By making the UC pension appear to be an excessive giveaway, the Gilded 36's demand obscures the real function of the pension as deferred payment for the hard work that UC employees do now to ensure that the University remains an engine of education, innovation, and shared benefit for California.


We feel no sympathy when the Gilded 36 complain that a deal is a deal. The Master Plan for Higher Education was a "deal" with the people of California, their children, and their children's children. It has been broken repeatedly by the state's defunding of public education and mismanagement by UC Presidents and Regents. Some deals, when broken, mean the difference between a higher or a lower six-figure pension. Other deals, when broken, undermine the world's greatest public university system, narrow access to education, and threaten California's economic recovery and cultural vitality.

We feel no sympathy for the administrative and academic elite who claim the right to be compensated at "market value," when they have accepted employment at a public university and receive salaries that, while not at market value, are often higher than the salaries of the majority of UC employees and Californians by a factor of ten. We reject the assertion that executives at the top must be retained whatever the cost. This big business notion is antithetical to UC's core missions: expanding access to the highest quality teaching and maintaining the highest caliber of research for the good of California as a whole. The Gilded 36 should model themselves not after private sector executives but after UC faculty and staff who teach and work at strikingly non-market value salaries because they care about more than simply personal financial gain; they care about the public good.

We feel no sympathy for the suggestion that these high-paid UC employees have sacrificed much during this crisis. How many of the Gilded 36 worry about meeting basic living costs, not the costs of luxury? Many Californians and many UC employees and students worry on a daily basis about keeping a roof over their heads and paying for heat, food, healthcare, daycare, and transportation.

The hardships of the fiscal crisis at UC are felt most painfully not by its executive and academic elite but by the majority of students, staff, lecturers, and faculty. This majority- together with UC alumni and indeed all Californians who value fairness and equity- should speak out forcefully and repeatedly against the blatant greed demonstrated by the Gilded 36 as well as the larger ideology of private greed and entitlement that is destroying public education and, arguably, the state as a whole. UC's leaders, as servants of the public good, must demonstrate to the Governor, state legislature, and people of California that educational access and quality and support for advanced research- being essential to California's future- must come before the disproportionate personal gain of the few.

Gregory Levine
Associate Professor of Art History, UC Berkeley, for SAVE the University

Louise Fortmann
Professor of Environmental Science, Policy and Management, UC Berkeley, for the Berkeley Faculty Association