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Monday, November 27, 2017

Monday, November 27, 2017
The UC Regents have finally released Justice Moreno's Report into the allegations that UCOP interfered with last year's audit.  As Chris and I noted last spring (see here, here, here, and here) the damage caused by UCOP's handling of the audit has been considerable.  With the release of the audit, newspapers up and down the state have intensified their criticisms of UCOP and President Napolitano.  Although the Regents and others are trying to minimize the implications of the audit, the damage is real because the Moreno Report is so damning.

The State Auditor, Elaine Howle, had explicitly requested that the campuses send their survey responses directly to her office.  The surveys covered campus views of UCOP itself, and were thus not to be routed through UCOP.  As the report makes clear, President Napolitano approved a plan that required campuses to submit their evaluations of her office to her office before they were transmitted to the auditor.  Although there may not have been any illegality in UCOP officials asking to review the audit responses, it was a remarkable step to take: requiring that evaluations of a superior pass through that superior would obviously have a chilling effect on the responses.

UCOP insists that their intention was simply to make sure that the responses were appropriate to the audit and represented the view of the campus chancellor. But this claim isn't persuasive.  Justice Moreno and his team found numerous examples of the President's Chief of Staff and Deputy Chief of Staff pressing campuses to make their evaluations more positive (9-13).  The chancellor of the Santa Cruz campus reported receiving an angry phone call from President Napolitano because his campus had sent their responses in without being checked by UCOP.  After he recalled his responses and went over them in light of UCOP criticisms, UCOP again pressed him to make further changes (20).  President Napolitano has declared that she didn't know that her Chief of Staff and Deputy Chief of Staff were intervening on the micro level.  But she did approve a plan that, by its very nature, would stifle the free flow of knowledge and information upon which the audit (and indeed a healthy university) depends.

In order to explain its actions, UCOP claimed a "toxic" relationship between the University and the auditor and the sense that the audit itself was political.  And the Moreno Report does raise important questions about the behavior of the auditor's staff in intruding upon and surveilling UCOP staff members (5-6).  But while these facts may help explain the attitudes of UCOP, they do not justify their actions.  Most of the discussion of the relationship between the Auditor and UCOP has focused on the 2016 audit of non-resident students which caused open conflict between UCOP and the auditor.  But it is important to remember that the struggles go back at least as far as the 2011 audit that identified funding inequalities between campuses and pointed to a correlation between those inequalities and racial composition: the poorer campuses had the highest proportions of Latinx, African American, and Native American students. Grasping that longer history is essential if UC is going to move forward from the present crisis.

Viewed together, the three contentious audits reveal several ongoing problems in UC's governance and strategies.  First, each of the audits marked the increasingly damaging effects of the implicit privatization strategies that UC adopted during the Schwarzenegger administration.  The first audit, as Chris pointed out at the time, hid the damage of state disinvestment by wrongly counting student fees as public funding.  Importantly, while the University challenged the audit's criticism of funding formula for campuses (80-81), it did not address this most fundamental change in the definition of public funding.

This acquiescence had two interconnected effects.  First, it almost inevitably accelerated rises in tuition and reliance on non-resident tuition.  Second, when the rebenching process later reduced campus inequities in state funding, it shifted inequality between campuses to their ability to generate non-resident tuition--an ability itself dependent, at least in part, on historical funding inequities.  One didn't need a crystal ball to see that the handling of non-resident students would become a political flash-point, when neither UC nor the state were willing to think seriously about how to structure a university that could meet its intellectual and social obligations while maintaining traditional, lower proportions of non-resident students.

Internally to the University, the acceptance of privatization has led UC to flail around in search of a magic bullet.  This process started during the Yudof Administration.  On the one hand, we were treated to the spectacle of the Regents' UC Commission on the Future that produced no new ideas  but exhausted people's time and energy.  On the other, we witnessed President Yudof's support of Berkeley Law Dean Chris Edley's fantasies for online education combined with his contempt for inclusive decision-making processes.  Shockingly, the eagerness to follow private sector fads (tech and managerial) didn't provide any real answers.

When President Yudof stepped down, the Regents continued their practice of following the latest managerial fetish and sought out a non-academic politician for president. In theory, President Napolitano should have been able to improve the political and fiscal standing of the university. After all, she had a successful political career and, while Governor of Arizona, had supported higher education in that state.

That expectation has proven inaccurate.  In the aftermath of the latestaAudit, UC is in its weakest political position since the Dynes presidency in the 2000s--if not since the late 1960s in the aftermath of the firing of Clark Kerr.

But if UC is in a weak political position externally, equal damage has been done to the University internally.  The effect of the Yudof and Napolitano years has been a growing centralization of power in the hands of UCOP, a tightened control over the campuses, and a marginalization of the Academic Senate as an independent voice.  Instead of initiative from below, essential to any real university, we face an intensifying managerial structure of top-down efforts to reduce the faculty's authority over academic matters.

Even President Napolitano's recent National Center for Free Speech and Expression is a symptom of this centralized thinking.  I hope to say something about its organization elsewhere, but for now I would simply point out that it was created, as far as I have been able to learn, without any Senate review.  Even a single campus research center would receive that much oversight.  Nor have more clearly administrative initiatives been thoroughly analyzed independently of optics and politics: the UCPath debacle, begun under President Yudof and continuing today, makes that clear.  We seem to have gone from Fiat Lux to simple Presidential Fiat.

UC needs new leadership.  But this cannot be limited to finding a replacement for President Napolitano.  The UC Regents, after all, have made the decisions--through their choices of presidents and policies--that have brought us to this point.  The Regents and UC must give up on trying to mimic the failed Michigan model in finance and the failed managerial model in administration.  The new leadership of the university must restore the primacy of academic judgment over the demands of finance, must seek new ways to transfer funds from administration to education, and must be open to ideas from below.  Meanwhile, the Senate must move beyond its currently reactivity and begin to act as a producer of vision and not just a commentator on administrative proposals.  In addition, faculty throughout the system need to take ownership of their local budgets and campus futures.

UC needs new leadership but it is crucial that that new leadership be based on more inclusive decision making and a vision that places academic judgement and the University's academic future at the heart of its planning.

Tuesday, November 7, 2017

Tuesday, November 7, 2017
This blog turned ten on Sunday, prompting me to wonder whether blog years are longer than kid years, or the other way around. Kid years are longer when you're waiting for your birthday. Blog years are longer when you're watching a university board meeting and you could have sworn the president said exactly that same thing about the budget 7 years ago, except it was a different president.  In any case, UC Berkeley looked like this when we started -- me in 2007, as a kind of alternate track while I was finishing a book called Unmaking the Public University, and Michael in 2009, when California higher ed got massively cut, employees were furloughed, students were protesting massive tuition hikes, and the road ahead seemed both steep and open.  Of course time in higher education policy moves in a circle, rather than straight ahead, and those of us who assumed that our professional status obligated us to continuous institutional self-governance wondered whether we were actually crew blown "into the devious zig-zag world-circle of the Pequod's circumnavigating wake."

You do what you have to do, which for us has meant offering analysis of the full range of university topics, which themselves intersect with the full range of U.S. scientific, social, and cultural issues, increasingly managed in Ahabian style, with many similarly loyal first officers who, notwithstanding the last ten years of missed opportunities, remain less doomed than Ahab's.  One dominant theme has been the persistence of culture wars on the university, now returned in the form of accusations that universities are the enemy of free speech.  Another has been the way short-term public cuts have been translated into long-term structural adjustments.  Both of these we stubbornly oppose, not just because we are stubborn, though we certainly are, but because we can see better alternate realities, which we will continue to set down here.

For a good while we were greatly helped by the editing of Jack Chen at UCLA, and are still helped by Alysse Rathburn working in the background, along with at least two dozen intermittent contributors, some anonymous.   Many thanks to all of them, and to our readers.  The work for universities continues, and I know I don't speak for Michael when I say here's to the next ten years!

Wednesday, November 1, 2017

Wednesday, November 1, 2017
How are we doing with the private-goods model? Advocates have defended it by saying that "multiple revenue streams"--tuition, philanthropy, non-resident enrollment growth, housing, for-profit masters programs--protect the university's public benefits.

I got an up-close look during my second visit this year to the University of Michigan at Ann Arbor. Preparing a lecture on the theme of "U-M: 2117," I went through the university's most recent public data, realizing I was doing this for the first time since our UC Academic Senate group wrote the "Futures Report" ten years ago, using Michigan as a worst-case state cuts scenario.

The good news is of course that U-M is one of the world's great universities, having pioneered inclusive quality and public funding in the 19th century, and gone on from there. It has wonderful people and programs, as I experienced once again first hand.

It's also a best-case example of privatization. It has an endowment of around $11 billion, making it 9th in the country and the largest public university endowment focused mainly on a single campus. It is said to have the largest living alumni base. It is second in the country in extramural grant revenues, and would be first if we excluded Johns Hopkins' Applied Physics Laboratory as a de facto government lab. It has an extraordinary number of departments ranked in their discipline's top 10 for research.  It was an early entrant in professional education, and pioneered large research centers in the social sciences.  It's a member of that tiny elite that doesn't lose money on its sports programs.

But there are costs.

First, students:   In-state fees are $15,000 for lower division and $17,000 for upper division.  Non-resident tuition is now over $50,000 for upper division students.  Average student debt for borrowers is a comparatively low $26,000.  But here's what the student body looks like.

Nearly two-thirds of U-M students come from families that make over $150,000 a year (top 12 percent).   The students who come from the bottom half of the population by income--and who are the furthest behind the upper-middle class in college attainment--amount to 13% of the student body.   U-M's Pell grant share is 15 percent, tied with the boutique private Rice University, and nearly the same as Northwestern, Tulane, and Duke. (UCSB's is 38 percent; UC Berkeley's is 31 percent, or twice Michigan's share.)

Another group whose college completion is an urgent public good are first-generation students.

Seriously, 5 percent? That's about one-third the rate of elite privates like Stanford and Princeton.  U-M-Ann Arbor enrolls African-American students at around a third their share of the state's population.  The data show that under the Michigan Model, the public research university simply stops being relevant to the majority of the population the system was invented to help.

In 2016, the national press discovered the feasibility of free college. In 2017, they've discovered a consequence of its absence:  tuition strategies increase inequality.  Some of this year's reporting is based on research from the Raj Chetty crew: a parial list of papers is here; a series of New York Times reports this year can be sampled here and here.  There was renewed coverage last week from Lee Gardner at the Chronicle of Higher Education and Rick Seltzer at Inside Higher Ed, both on the theme of public universities now catering to wealthy students.  The University of Michigan is Exhibit A.

What about the business end? The main private revenues are various kinds of tuition.  Leaving aside their negative social effects, they are probably close to their maximum.  Enrollment growth--especially non-resident enrollment growth--also has costs and limits. There may be a bit more mileage left in both, but these are mature strategies.

There's philanthropy. U-M Ann Arbor is a best-case situation.

Operating revenues from endowment are a small fraction of the U-M system's nearly $7 billion overall revenues.

Tech transfer revenues also come up in this context: UCLA recently added a business board to its operation because the professional campus staff was supposedly missing some big money.  The U-M case says there isn't any.

These are gross revenues, so the return to research is much smaller.  And the gross, averaged up to $25 million a year, is under 2 percent of research expenditures, never mind the overall campus budget.  We need more STEM research, not less. But we can't justify it in financial terms.

The big research gross tells an important story.

Ten years ago, U-M was spending 15 cents of its own money to support each dollar of research expenditure.  Now they're spending more than twice that.  In 2016, they spent $456 million of their own funds on research.  Inadequate cost coverage turns research universities into subsidy platforms for outside sponsors, and U-M has stayed on top by paying out of pocket (federal revenues are flat).  The further universities move from public to private sponsors, the more their institutional subsidies rise.  This is an absurdly taboo subject, while in the background subsidies continues to erode public university solvency.

Top university officials often say privatization, under its quasi-official name "multiple revenue streams," works just fine. The evidence says the opposite: it damages public benefits (quality degrees across the whole society), and university finances at the same time.