Racial Patterns of Campus Budget Inequality: the State Audit Part II

You'll recall that the California State Auditor released its audit of the University of California last July. In Part I of my analysis, I discussed the Bureau of State Audit's (BSA's) incomprehensible claim that student tuition money is public funding. Yet the audit compensated for its coverup of UC's revenue problem with a disturbing analysis of UC's internal distribution of funds among the campuses.  It noted two things: a rich man/ poor man inequality among campuses in educational resources, and an apparent racial pattern in which the poor campuses are those that have higher proportion of underrepresented racial or ethnic groups. 

I'll discuss these findings, and toward the end of this post will show charts that challenge the Office of the President's rebuttal of these findings.  Has UC's central administration been underdeveloping the University of California in part along racial lines?  In spite of OP's 's good intentions--and the audit's backpedaling on "inequity"--the current evidence says yes.  The unequal distribution of both underrepresented students and core funding poses a question about whether UC is willing and able to advance social development in a minority-majority state.

Here's the figure that summarizes the Audit's findings on racial disparity:

UC campuses have significant variation in their proportion of underrepresented racial groups, defined as "Hispanic, Black (non‐Hispanic), American Indian, and Alaskan Native."   The report separates them into two clusters on either side of their 18% systemwide average.  The averages for the two groups are 27% for the campuses with more students from underrepresented groups, and 15% for the campuses that have a higher proportion of students that are white and/or Asian American.  These latter campuses are Berkeley, Los Angeles, San Diego, Irvine, and Davis. The more black-and-brown campuses are Merced, Riverside, Santa Barbara, and Santa Cruz. 

The audit equally finds large variations in the per-student amount of state and tuition money that each campus receives from the Office of the President.

These variations are also large.  A student at the poorest campus, Santa Barbara, has 63 cents on the dollar received by a UCLA student down the road.  The auditors know that the difference has something  to do with the outsize per-capita sums spent on medical education -- hence their third column above, and San Francisco's $55k per student.  Comparing Santa Barbara to Berkeley, which also has no medical school, still puts Santa Barbara at 72 cents on the Berkeley dollar.  In spite of its placement with the better off campuses in Table 7, Irvine is a lower-middle income campus with a medical school, receiving 79 cents on the Davis dollar (another medical campus). 

The punch line is the Auditor's correlation between the poorer campuses and their higher enrollments of underrepresented minority students ( Table 7 again,  p 38).  The audit quantifies underfunding as something over $200 million a year for the four "minority" campuses.  $200 million would buy a lot of the individualized instruction that budget cuts are squeezing out right when the state of California needs instructional  upgrades instead. The audit puts the difference at about $3500 less per head at the lower-income campuses.  Since the average of all the campuses minus SF is just under $15,500, students at poorer campuses lose nearly a quarter of average UC resources by attending one of the them.

The Audit thus identifies two separable but interrelated issues with UC's budgetary structure:

1.The campuses are unequally funded.  Though some of the differences reflect different program mixtures (on this more below), it is very hard to justify charging all UC students the same tuition and then giving them very different resources at different campuses.  On its face, UC creates a clear inequity when it charges the same amount for different resources depending on the campus a UC student attends.

Similar arguments can be made for research: all UC activity is premised on UC being a balanced system of comparable quality everywhere.  To put it obnoxiously, the NSF doesn't fund grants at UCSB thinking that that campus will put in 63% of the intelligence or effort of a similarly funded grant at UCLA.  Indeed UCSB personnel and students put in 100%, yet without 100% of the matching resources. 

2. UCOP sends less money to campus with more underrepresented students.  The audit doesn't claim that UCOP sends less money because a campus is more black and brown, or that UCOP has any racist intent -- it goes out of its way to deny a causal connection and refuses the term "inequity" (see p 37).  Nonetheless, the BSA identifies racial disparities that correlate with funding inequalities.

Unequal resources for racial minorities is  a fundamental pattern in American society and schooling that decades if not centuries of struggle and countermeasures have not remedied.  UC is not above this history. Now the state audit lays a serious charge at UC's door.  How does UCOP respond to the audit's identification of these issues? 

UCOP makes two main points:

• Campus funding differentials reflect "150 years of strategic funding choices," different program mixes, and each campus's unique identity (pp 79-80). These differences do not reflect inequity, but instead the strategic flexibility that former UC president Clark Kerr described as a key to excellence.
• Regarding the racial pattern, UC has no biased intent and the BSA has no evidence of either intent or disparate outcomes.  The "BSA makes no investigation into or observation of disproportionate or inequitable treatment or outcomes for students at different campuses. The University of California has a firm commitment to diversity and an extraordinary record when it comes to the persistence and graduation of students from all California communities:" (p 81)

I have two thoughts about the first point. One is that UCOP shouldn't see Kerr-style excellence as expressed by a system that has turned out to have such unequally funded campuses.  It is true by definition that the poorer campuses have cheaper programs, which means they have fewer professional programs and graduate programs and the myriad intellectual activities that go with that. Since UC is a system of research campuses, why is it OK that at least four of them are funded more like undergraduate colleges?  We should instead take unequal funding as a sign that UC remains underdeveloped, more so at some campuses than others.  We should also read UCOP as saying that in a restricted funding environment, this underdevelopment has been intentional and strategic.

For some reason, the auditors deny they implied that funding differentials have a "potential for inequity" (87).  In fact UC officials have not only admitted resource inequity but said that it is deliberate and good.   In addition, they say they will oppose correcting it: the Office of the President "further stated [to the state's audit team]  that the university does not wish to jeopardize the achievements of the Berkeley and Los Angeles campuses by shifting funds away to other campuses in an effort to provide an equal amount of the general funds and tuition budget per student" (36).   In a period of stagnant or declining funding, UCOP defines its job as protecting UC stratification rather than correcting it.

Secondly, funding differences aren't created by the presence of high-cost professional and medical programs (pp 32-33).  A fellow UCPB alum analyzed UC's audited financial statements and removed funding for the medical and other professional schools.  He did this for 2006-07, which was a fairly normal year after the cuts of 2002-05 and before those of 2008-2012.  This is a chart based on those calculations (excluding the all-medical campus of UCSF):

UCOP distributes both tuition and state general fund unequally, in a pattern similar to that the audit described.  (San Diego is sometimes called the "third flagship" but is funded as the system's average campus. Irvine is actually found among the poor.)  The crucial point is that differential campus funding remains even after the biggest program-based causes are removed.  The remaining differences derive from "historical variations" by campus in funding for undergraduates and academic graduate students.  This is the problem, not the justification of it.

On the racial pattern, UCOP pushes back hard.

[W]e strongly object to the BSA’s use of the variation in the race/ethnicity profiles of our campus student populations to further cast into doubt the integrity of the University’s allocation process. There is absolutely no basis – statistically, historically, or ethically – for drawing such a connection. Furthermore, the BSA makes no investigation into or observation of disproportionate or inequitable treatment or outcomes for students at different campuses. The University of California has a firm commitment to diversity and an extraordinary record when it comes to the persistence and graduation of students from all California communities. Four- and six-year graduation rates for all combinations of race/ethnicity and gender are higher at UC than at 21 public peer institutions.

But UCOP's own 2009 report on campus differences does find inequitable outcomes - namely, significant variations in graduation rates. 

The audit's rich and poor campus correlate are those that have system's higher and lower graduation rates, respectively.  (UC's comparator universities show the same correlation.)

Although a race-based breakdown of graduation rates is beyond my scope here, we do have this evidence that UC's underfunded campuses have lower graduation rates that would negatively affect their higher proportion of underrepresented students.  In this case, UC's funding disparities places an extra burden on its underrepresented students.

The patterns I've discussed call into question UC's social relevance to a state which now has a solid minority majority in its student population and in most metropolitan areas.  Were UC to equalize graduation rates and academic attainment across racial groups, that would be remarkable and transformative, and something the state's majority would be likely to fund.  But if UC mostly reproduces racial hierarchies through a stratified system of unequal campuses, it does much less work for the state, and will have less interest to its population.   UC would by this logic of diminished public service receive less public funding.  If UC defines its accomplishments as damaged by equitable funding distribution around the system, as it does when it puts flagship funding first, these accomplishments will not attract broad public interest.

Finally, there has been some important internal rethinking of these funding patterns.  The faculty Senate's Academic Council has proposed the "rebenching" of base budgets, which I will discuss in another post.  In so doing, the Council offers this as its core principle: " UC is one university with one standard of excellence at its ten campuses, and the cost of a UC quality education is the same on every campus."  Council passed this principle unanimously.

Principles are free and can be adopted by anyone.   UCOP should adopt the principle of equal funding across campuses for each type of student (undergrad, grad, etc) . This would allow the UC system to accomplish it larger mission.