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Monday, February 11, 2013

Monday, February 11, 2013

Gov Brown Could Take an Important Step Towards Fixing Higher Ed

by Stanton A. Glantz and Christopher Newfield  

While Gov. Jerry Brown's interest in online education captured the most headlines last month, the principles in his budget proposal for California higher education are more important.

The first principle is that correct public funding is essential to the combination of high quality and full access that made UC such a special exemplar of the potential of public higher ed.  The Governor’s budget says that “the state must begin to reinvest to improve the quality and affordability” of higher ed. 

This is completely right.  A central finding of our detailed study of UC’s budget, known as the "Futures Report"  (2006) was that public funding cannot be replaced by private funds in the form of gifts and research sponsorships.  More important, the Futures report concluded that the only way to replace public funding was with massive tuition hikes that were unacceptably large. 

The second principle Governor Brown (and many leaders in the Legislature) established is that the rapid tuition increases need to stop.   The Governor reiterated this point in his State of the State message when he said, “I will not let the students become the default financiers of our colleges and universities.”

The third and most important principle is to compare growth in higher ed budgets to the rate of state income growth, which the Governor’s budget proposal notes has “averaged slightly less than 4 percent per year.”  We have argued that this benchmark would both control costs and prevent destructive cuts to the state’s capacity to create new knowledge, capable citizens, and a creative workforce on the large scale required.

A problem arises with the Governor’s affirmation of this principle right now, in a deep funding trough created by massive cuts. Our chart shows where UC funding would have been if the state had followed Gov. Brown’s “income principle” for the past decade.
Past policy has been to privatize public university funding by deliberately shifting costs to students. So there is now a huge gap between "normal" general fund growth and UC's actual public funding level. The gap has been only partially filled by a tripling of tuition over this time period, but even these large tuition increases, once enrollment growth and financial aid are deducted, have covered 38 percent of the loss of state funding, according to University estimates.  

Governor Brown notes the resulting damage to both quality and affordability. He cannot, however, fix UC or CSU’s quality while simultaneously capping tuition and keeping state funding at their lowest per-student level in modern history--58 percent below its 2000-01 level (Display 7).

To be consistent, the Governor would need to tie UC funding to income growth not just right now, at a historic low, but over the long term. He would also need to propose a long-term plan to get public funding back on track—precisely so that tuition increases can be halted or, better yet, rolled back, even as quality is improved.

Finally, it has been suggested by University officials and many others that it is too late to fix the gap and that we should give up on fixing public funding.  

This view is factually incorrect. Glantz and Eric Hays have updated their report on how much it would cost to restore UC quality and affordability to 2000-01 levels.  Their answer includes not only the restoration of state funding whose decline is shown above, but also a tuition rollback to 2001 levels ($5278 in current dollars).  The recovery that the Governor's budget envisions, including not simply a tuition freeze but a tuition rollback for California’s entire higher education system (UC, CSU and the community colleges), would cost the median taxpayer $48 per year. 

We assume that the Governor is serious about ”reinvest[ing] to improve the quality and affordability of California’s system of higher education.”  We hope that he will maintain a logical consistency between his call to restrain tuition growth and the public funding recovery that this entails.  He – and all of us – need to study the graph above and move UC (and all of higher ed) back to the blue line, which stands for funding full educational quality for the next generation of students.


Anonymous said...

Does the $48/taxpayer figure on which this is based include the large unfunded retirement costs that UC faculty didn't contribute towards for the last 20ish years? Isn't that amount something UC and faculty now have to start paying for, to cover the lack of investment thus far? If that's included the editorial should highlight that, as it's probably a major concern, and it would make the case even more persuasive.

Chris Newfield said...

the $48 would rebuild revenues, but is neutral as to expenses. That is probably one reason political and business leaders and probably many Regents don't want to fix public funding: some of it would be spent plugging holes opened up by prior bad decisions, like the pension holiday that the R's inexplicably never reversed. Contractually obligated deferred compensation embodied in UCRP would be part of that, but so would doing deferred maintenance on UC's now sub-par physical plant and increases in various student services to cover recent enrollment increases--not to mention a crucial unfunded cost, which are indirect costs on extramural research.

Andrew Dickson said...

Undoubtedly, UC could spend more money; much of it probably to good effect. However, I wonder why the academic year 2001-02 is seen as an annus mirabilis that defines UC's needs for state funds going into the future?

Chris Newfield said...

that was the end of the last cycle in which the big cuts cycle of 1992-95 was folllowed by rebuilding, and was the last year in which UC was within striking distance of master plan levels of state-funded resources. It's also not ancient history--we can all remember a world in which normal educational quality, research support, etc. actually occurred, and weren't a huge deal over which we needed to agonize constantly.

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