Last week's UC news of $500 M in untapped administrative savings eclipsed the real story, which is that like CSU, UC's state funding remains destructively low. 

I have updated the charts that continue to follow this story.  I want to thank Maelen Haugen of UCSD and UCEAP Lyon for her particularly intelligent updating of our messy master spreadsheets.  These 2 charts have minor errors (e.g. a Benchmark that doesn't dip in 2009) and will be replaced when I get back to my desk next week, but the overall picture is accurate.

The standard funding model for higher education ties funding to state General Fund (GF) availability. When we produced the first version of this chart in 2005, we sought to change the framework for thinking about higher ed funding. We did this by calculating a 2001 Benchmark, the turquoise line sloping up, which was tied not to the GF but to aggregate state personal income.  The Benchmark rises at a rate tied to the amount of money Californians actually earn.  The Benchmark reflects UC's General Fund share when it simply does as well as the state's income earners - no better, but also no worse.

The Futures Report and its heirs have discussed the other lines so I won't say much here - the green 1990 Pathway that is far over our heads, the orange Compact line which blocked recovery. There have been decision points along the way.  The Senate officially recommended that the President ask the Regents to add $700 million to their budget request in 2007-08 as a way of getting back on the 2001 Pathway - growing with the state - while there was still time.  This suggestion was not transmitted, seeming already to be a "non-starter" as one Regent's assistant told me at the time. 

The price of our "realism" can be seen in the Schwarzenegger snarl of falling lines. Purple was our worst-case scenario in 2005 - a public funding freeze.  The May Revise of 2009 put us below that in the current year. We then have the turquoise bounce that is being heralded as good news by UC officials, which it is only in the context of cuts to other agencies.  Note that it leaves us well below the Compact line -- which the Governor unilaterally abrogated in 2008.  It also remains close to the worst-case scenario of 2005, which incidentally envisioned filling the budget hole with fee increases to $20,000 a year, not the kind of deep, steady cuts in service that we are seeing this year and next.

 When GF revenues are corrected for inflation, it is easier to see that we have ended the decade well below where we began it.  Please note that we have not corrected for enrollment growth or for real cost increases tied to the Higher Education Price Index, but have used the lower Consumer Price Index for California.  But this graph does give you a sense of why academic units all over the system are looking at 5% - 15% permanent cuts over this year and next, with no end in sight.

The core problem with the current funding model - which Michael referred to as the hybrid model - is that it is and long has been unable to sustain correct levels of public funding. 

A related problem is that when adherents of this model  now try to sustain public funding - as UCOP certainly now is -- they get tangled up in political compromises that reduce the likelihood of success. I will say more next week about why this is, but note in the meantime two corrosive compromises last week:
(1) the unlikely praise for Arnold Schwarzenegger's budgetary largesse to UC that suggests that the return of $305 million that he cut last year is a maximum rather than an only partial undoing of major damage.
(2) the administrative savings initiative, whose inflated $500 million estimate implied that UC is sitting on a half-billion of waste, meaning that our next half-billion of recovery money can come from us rather than from Sacramento.

Last week UC went backwards, not forwards. Next week I will offer more gruesome charts and outline better funding parameters.

By Michael Meranze

If some future historian comes to write the History of the Decline and Fall of the University of California she undoubtedly will puzzle over the administrations of Robert Dynes and Mark Yudof. The former’s problems were legion—from the Compact with the Governor, through myriad administrative scandals, to the alienation of the Regents and their increased efforts at micro-managing the University. The Yudof years are, of course, far from being finished. But certain characteristics are clear: a drive towards centralization and his dismissal of faculty and staff voices (for instance in his cavalier characterization of the university’s employees as the inhabitants of a cemetery) being the most obvious. Ultimately, however, these problems are symptoms of a deeper failing that cuts across both administrations: their inability to imagine a way out of the present crisis because their policies and assumptions are part of that crisis themselves.

Indeed, the most striking characteristic of the last two administrations—and the Regents who have employed them—has been their inability to offer a compelling economic, ethical, intellectual, or political justification of the University and its social importance for our time. President Yudof insists that he is an admirer of the Master Plan—and I have no reason to doubt his sincerity. But the problem isn’t personal preferences. Far from seeking to transform the financing and rethink the nature of higher education as they claim, UCOP and its allies are simply proposing a more intensified version of an already failed system. The basic assumptions that President Yudof, UCOP, and their propagandists make about the way the world is actually reinforce the structure of business as usual. Because they are committed to a model that has failed American higher education they have been unable to defend the University effectively.

UCOP’s story begins from a basic unassailable fact: the decline in public funding support for the UC, indeed for all of the California’s higher education apparatus. President Yudof points, again with accuracy, to the fact that this decline has been occurring across the nation—while California’s crisis receives a huge amount of coverage, the underfunding of higher education here is not unique. Faced with this crisis, Yudof moves to his proposed response, what he has termed in the past the “hybrid university.”

The “hybrid university,” he insists, must accept that the decline in public funding is permanent. It must seek out new sources of revenue—from private donors, corporate contracts, and student fees—to compensate for this change. In effect, the hybrid university not only breaks with the centrality of public support, it also breaks with the centrality of the university’s public character. Public funding and the public aspects of the university’s institutional culture become means to leverage private funding, private support, and private commitments. This practical redefinition of the public from the heart of the university to a means of leverage helps explain UCOP’s continuing depiction of publicly funded parts of the University as drains on the institution’s finances while they laud privately generated funds as actual investments in the future.

But President Yudof is not articulating a new strategy; he is merely renaming the strategy that public universities have been pursuing for two decades—and that has brought us to the present crisis. This pursuit of the “hybrid university” has brought us to a period of declining educational achievement, increasing inequality in access to education, and a death spiral of funding for public education. The hybrid university has been in place at least since the early 1990s. It is the financial infrastructure of the decline of American higher education. It is that reality that UCOP is unable to confront.

To continue already failed strategies is not a rational plan—it is a recipe for continued decline. UCOP and its allies insist that the state cannot be brought back to its commitments and chide those who insist that it must for allegedly living in a fantasy world. But facing necessity is not fantasy—the strategies proposed by UCOP and its allies will not turn around the university because they are the strategies that have brought us to this point in the first place. Renewed public funding is not simply desirable. It is required.

The efforts to finance the University through tuition and private endowments may alleviate the problem slightly, but they cannot solve it. As the “Futures Report” made clear, there is no way to compensate for the loss of public funding without transforming UC into a fully private university. And how UC would make up for its minimal endowments, gain access to its physical plant (owned by the state), or be able to compete with leading private universities is unclear. To say nothing of how it would recover from the loss of its soul.

The only way to save the university, then, is to regain public support and state funding. Regaining state funding will not be easy and it will not be immediate; no one believes otherwise. Indeed, we should recognize that the present crisis is real and that the next several years, at least, will be difficult. As we all know, cuts have been imposed and more are coming.

It is because of the depth of the problem that the abdication of UC’s leadership (both in UCOP and the System-wide Senate) is so devastating. By pretending that there are funding solutions without state reinvestment, they enable the Governor and his allies to dodge the full responsibility for their actions. And by failing to make the full economic, ethical, intellectual and political, argument for public education and for public investments they help ensure that students will receive lesser educations in the future and that the state will suffer the consequence.

The tragedy here is that in their embrace of a failed funding model and their depiction of faculty and staff as dinosaurs from another age they denigrate the institution that they are charged to protect and serve. Again, President Yudof’s off-handed comment that the “shine” is off education is all too typical of a lack of confidence in the very institution that he is charged with leading. Californians have, for decades, taken great pride in their institutions of higher education. It is the recent transformation of the universities into corporate like entities whose main concern seem to be revenue streams rather than teaching, research, and service that alienates so many of the public. Students are trained into debt rather than disciplines; they are driven into fields because of economic pressure rather than curiosity. And in the end, they are not even guaranteed a job. But UCOP seems unable to draw upon that long-standing pride. Appearing more as managers of a corporation than educators of a generation, they simply reaffirm the worst fears of skeptical public.

If UC’s leadership truly wishes to save the University they cannot do so by pretending that there are private funding streams that can preserve the University or, indeed, by thinking about UC alone. UCOP, of course, needs to intensify efforts to work with the leaders of the CSU and the CC’s to make the case for the necessity of higher education to the state. But even this alliance will only get part of the way towards ensuring education into the future.

The state faces an ethical and political crisis—one that is based upon the question of whether or not we plan to sacrifice or educate and nurture the young. Higher Education cannot survive in a context where children are denied health-care, child-care, or education unless their parents are wealthy enough to provide them. Higher Ed leaders must draw upon the prestige of their institutions to make the public case not simply for higher education but for broader public investment in the future. They cannot do this overnight—nor can they do it alone. There is no guarantee of success.

Saving the University by helping to transform California’s political culture will necessitate genuine change in the attitudes of UC’s leadership—most importantly they will have to break their complicity with the right-wing forces in the state government (most evident in their embrace of the Governor) as well as curb the power of finance capital in the running of the University. They will need to stop insisting that the University can do without increased state funding. And they will need to turn their backs on the hybrid funding model that has brought us to this crisis. But if they do not attempt to do so, they cannot complain when the History of the Decline and Fall of the University of California treats this moment as the strange defeat of the University.

So reported the Chronicle yesterday, with supposed savings of $500 million.  The changes involve procurement streamlining, increased software compatibility, etc. It is presumably Regents item F3, but as of this posting there are no public materials to review.

Quite gratuitiously, "Peter J. Taylor, the university's chief financial officer, told The Chronicle that adopting common financial systems would encounter cultural resistance in such a decentralized system. 'The hard part isn't identifying the opportunities,' he said. "It's driving the cultural change that will have to take place.'

UC has been talking about things like regularizing computer systems (e.g. for payroll) for 20 years.  The obstacles have been No Coordination - these are complicated operational problems that require long-term effort from UCOP - and No Money.  It's true that campus offices don't like unfunded mandates from on high, but contrary to CFO Taylor's remark, there is no "cultural" support for outdated and incompatible software and for five layers of procedural checks.

On the other hand, there is a need for central administration finally to follow through on their talk, which will also entail that they not foolishly imply at the start of a process that the campus personnel who will implement any changes have been causing the problem by dragging their feet.  Several of UCOP's most vocal figures now routinely address everyone below the rank of senior manager with a reflexive, defensive, arrogance that makes them look pretty silly while reducing the chances that even worthy programs will succeed.

By Michael Meranze

Some persons of a desponding spirit are in great concern about that vast number of poor people who are aged, diseased, or maimed, and I have been desired to employ my thoughts what course may be taken to ease the nation of so grievous an encumbrance. But I am not in the least pain upon that matter, because it is very well known that they are every day dying, and rotting, by cold and famine, and filth, and vermin, as fast as can be reasonably expected. And as to the younger labourers they are now in almost as hopeful a condition. They cannot get work, and consequently pine away for want of nourishment, to a degree that if at any time they are accidentally hired to common labour, they have not strength to perform it; and thus the country and themselves are happily delivered from the evils to come.

Jonathan Swift, A Modest Proposal

In his May Budget Revision Governor Schwarzenegger, unlike the projector in Swift’s famous satire, does not suggest that we eat the children of the poor—at least not literally. Instead, the May Revision plots out a path where the poor, the sick, and the young can be slowly disencumbered of necessary public support and left to their own resources in a recession-racked economy. The Governor and his republican allies have made the decision to place the burden of balancing the budget on those least able to bear it. We need to be absolutely clear about this point. While the May Revision insists that it is a “reflection of … the difficult and necessary changes required to address this year’s budget gap” (MR, 5) it is nothing of the sort. Instead, it is the result of a decision to protect the interests of the wealthiest Californians and of large corporations at the expense of the rest of the state’s population.

Typically, the Governor blames everyone but himself for the budget mess: no mention of his pandering rollback of the vehicle registration fee that set revenues back billions of dollars; no mention of the long-term decline in corporate taxes and the shift of tax burdens onto wage-earners; no admission that his own refusal to sign into law changes the legislature had passed at his urging (because they were not everything he wanted) had worsened the situation. Instead, the problem lies with Courts that uphold the laws, workers who expect to get paid, and legislators who don't follow him like children after the pied piper.

Let’s look at the central elements of the May Revision:

1) The Governor and his Republican allies have made it clear that they will not accept any tax increases. Arnold opposes an oil severance tax that might raise over 1.3 billion dollars and which all other oil possessing states, including Sarah Palin’s People’s Republic of Alaska, have imposed. Moreover, he indicated that he won’t roll-back the corporate tax breaks provided to selected corporations as part of political deals in 2008 and 2009—tax breaks that are costing the state billions of dollars in tax receipts. The refusals to impose an oil tax or repeal these corporate taxes are not, we should be clear, designed to benefit the working or middle-classes. The Governor’s willingness last year to agree to a sales tax increase (the most regressive of taxes) showed where his true loyalties lay—with the wealthiest and most powerful amongst us.

2) Instead of considering tax increases, the Governor has decided to raise fees and limit eligibility to Medi-Cal recipients as well as those in the Health Families Program, eliminate the Cal-Works program, cut funding for In-Home Services for the Elderly, and shift funding for some Food Stamp and Child Welfare Services onto Counties. (MR, 21-26) Just so we are clear who the Governor is targeting with all of his cuts it is not simply the poor in general but the elderly and the young. To take only one point: over ¾ of the Cal-Works recipients are children.

3) The Governor claims that he is meeting the Proposition 98 funding level for K-12 schools. Technically this may be correct, but we should recognize that it is the result of a series of sleights of hand. For one thing, the Governor also proposes eliminating “the remainder of state funding for need-based, subsidized child care totaling almost 1.2 billion” (MR, 41) (which lowers the overall budget and consequently funds for schools) and has proposed a swap involving gas taxes between the general fund and special funds which will lower the Proposition 98 funding levels.

4) The Governor is proposing that all state civil service workers take one furlough day a month with the resultant downward effects on wages.

5) As you all know the Governor has promised to increase funding for Higher Education in this budget. Several things should be said about this. First, the Governor’s proposal does nothing about the recently passed fee increases—they remain in effect at both UC and CSU. Second, the proposal effectively fills up some of the cuts from last year—it doesn’t address needs for growth. Third, while the budget for 2010-11 is larger than for 2009-2010 the Governor has lowered the proposed funding between January and May.

There is political calculation here, of course. As Robert Cruikshank has argued over at Calitics the whole political point of this gambit is to divide the different Democratic constituencies. Arnold knows that he will not be able to eliminate all of these programs. In response he will then cut Higher Ed and blame the Democrats. The middle-classes, faced with rising fees, will become even more disenchanted with the Government and the wealthy and the large corporations will laugh all the way to the bank. The Governor’s budget pits Higher Ed against services for the poor and the elderly; universities against children; and the middle-classes against the working-poor. By pitting the middle-class against the working class and the poor, the Right (and that is who Arnold represents) hopes to continue their long attack on any notion of a common good ensured through the public realm.

Even more insidiously, the May Revision implies that the only budgetary option is to choose among different ways to cut the state’s investment in the young. California has long been noted for its willingness to pay more to lock someone up in prison than to educate them at college. But under cover of the budget crisis and the recession, the Governor is proposing to sacrifice the young by undermining, and in some cases, destroying a whole range of social institutions: childcare, schools, health care, job training, colleges and universities. And all to protect the tax breaks of those who need help the least. In effect, The Governor’s proposal condemns the future to protect the past. This point seems to have escaped UC leaders in their rush to thank the Governor but it should not escape us. Against the politics of Arnold we need to support a politics of investment in the future; saving the University means reinvigorating the larger public realm.

The Berkeley Faculty Association has released a report on the preliminary UCOF recommendations and Dean Edley's apparently undead proposal for a Cyber-campus. Please take the time to read it. It offers a very important take on where UCOF may be leading the University and just as importantly indicates that, in the face of insufficiently quiescent working-groups, UCOP has decided to circumvent its own Commission and make "reform" proposals over the summer. UCOP, of course, is assuring everyone that any proposal will pass through the Senate but given the manner in which Divisional Senates are being asked to respond to the first round of UCOF proposals (as many of you may have seen senate committees have been given pre-fab response sheets), these assurances are not particularly re-assuring.

Please use this post as a space to report on the review process on your campuses as well as to respond to the BFA report.

In the past 10 days I have lectured at San Francisco State, at the University of Washington,  and at half of UC's campuses. I have had the pleasure of spending several hours at each place with faculty and staff who are trying to keep things one their campus from getting worse, and picked up a few repeat issues.

• No expansion, all contraction.  Like Herbert Hoover before them, the governors of the Western states are focused exclusively on deficit reduction.  There is no other goal of governmental policy than to spend less money tomorrow than the amount we spent today.  Reflecting the general paralysis, not a single person I met was discussing a stimulus push. UC, CSU, UW, et al should be demanding an economic stimulus and rebuilding strategy in which they would play an important role, but this  is off the table.  I wondered more than once if we will be remembered in future decades with the same mix of pity and contempt we reserve for contractarian goats like Mr. Hoover.

• "We'd protest, but we're late for work."  One student activist said the students most in need of stable public funding are working two or three jobs, usually adding up to close to 40 hours a week.  "In the 60s, there was time to think, to go to meetings, to participate politically."  Students are as active as ever, she said, but given time constraints and other ties tend to do politics in their communities, where things are just as bad.

•  Backward Budget Policy.  In general, administrators still treat the budgetary structure of our common  institutions as proprietary information, to be retained or dribbled out at their discretion.  Virtually everyone I spoke to is resigned: there isn't enough time in the day to ask for every spreadsheet six times or even to request a single number like the base figure to explain the percentage cut represented by a number that just appeared in a memo.   A few Senate folks have deep knowledge of parts of the budget.  There is an active transparency project at UC San Diego (displays correctly upon download). This is important work. It is also the exception rather than the rule.  And it means enormous duplication of effort and reduced personal effectiveness for the faculty members who are forced to play spreadsheet hide-and-seek in order to understand their own institutions and provide creative input.  This is not behavior required by healthy institutional cultures.

• Decline of educational quality.  I heard examples at each campus. The chair of one top-5 engineering department described cuts in the number of required laboratory courses their majors took, and growth in the size of each lab group in the remaining courses. He then said that a company that hires 40-50 of their graduates each year told him that "the quality of your graduates has been going down for three years now. They're smart, but they have less experience and need more help."  At another campus, a social scientist told me, "As my courses get bigger, I focus on signing-in, test recording, attendance, and behavior.  It is increasingly like teaching high school."

• Moribund reform processes.  No one suggested the Commission on the Future might come up with useful suggestions, or had much good to say about the first round recommendations. Expectations of UCOP are at an all-time low.  Few people seem to assume that UCOP is working for rather than against the campuses.  Folks had an easy time listing UCOP destabilizers of the system - operating cuts, salary cuts, pensions put in play, faculty role in instruction questioned, unions disrespected - but no services or supports.

• Ending the system. For the first time in my experience, at least one person at each campus asked me whether I thought breaking up the UC system would be a good idea.  Sometimes it was to get Campus X free of the burden of the other campuses. Usually it was to free Campus X from the burden of UCOP.  We have moved rapidly away from the "Power of 10" mantra of past years, and people are desperate enough to be considering divorce.

• Braced for further decline.  this was the dominant mood, although everyone was looking for a way out. My lectures have been trying to propose a way forward and I've been heartened by the intelligence and energy of the discussions.

• Community bridges, public service. Individuals and groups are doing wonderful things for California communities. Cal State's Metro Academies Initiative was one standout.  Great people and great work are everywhere on our campuses. So how can we make our university systems greater rather than less than the sum of their parts?

By Michael Meranze

The UC faculty needs to assert their own vision of the core functions of the University. For too long we have accepted the conventional understanding of a multiversity—that the definition of the institution must proceed from the top down; that the incredible complexity of knowledge demands that faculty can only tend their own gardens; that broad discussions about the aims of higher education will devolve into banality or irresolvable conflict. But whatever the conditions of the recent past, these assumptions can no longer be sustained. If the faculty do not become more involved and assertive in defining the University, its definition will be made by market-share and balance sheets.

If the UC Commission on the Future has made anything clear, it is how marginal the faculty—and especially the College faculty—have become in the governance of the University. Despite the serious efforts of faculty on the working groups, the Commission has been weighted from the beginning towards the administration and the professional schools. Of the Commission itself only two members are active members of college faculties (and both either are or have been Deans) while in the additional working group co-chairs one is an active member of one of the college faculties. By contrast, 15 members of the Commission and Co-Chairs of the work groups are either from UCOP, Campus Administrations or the Professional Schools. Indeed, even the professional school faculties have been, for the most part ignored, with Harry Powell and Mary Croughan their only representatives. The end result, not surprisingly, has been faculty alienation and dismay. This effect may have been inevitable once Croughan and Yudof decided that the Senate could not handle the task of thinking through the future of the University. I will leave aside the question of whether this alienation and demoralization was intentional; but it has been the clearest success of the Commission so far.

There is nothing surprising or unreasonable about having administrators involved in the Commission’s activities. But the particular configuration of authority is telling. The distance between UCOP and the Regents on the one hand, and faculty on the other has been growing for decades. The most recent attempt (in 2007-2008) to reform UCOP merely institutionalized that distance by failing to include any direct linkages between faculty members, UCOP, and the Regents. The fact that only the student regent attended any of the public UCOF forums and the tightly limited time allowed to individuals to present alternative approaches at the forums reveals how far the UCOF campus visits were from true opportunities for serious discussion and sharing of responsibility and insight.

Just as importantly, the marginalization of faculty has sidelined what we might have thought would be the central question facing the Commission: how best to preserve the educational core of the University. Instead, the Commission has been primarily concerned with how best to produce revenue lines and lower costs. Increasing revenue and effectively spending money are obviously central concerns; but they can only be addressed once we have made clear what the central ends of the University itself are. The danger is that the question of the purposes of the University will be decided without real debate. If this seems alarmist consider the offhanded way that the UCOF executive summary of the first round of Working Group reports transformed UC’s traditional tripartite mission (teaching, research, service) into a four-legged one: teaching, research, service and health care.

But it is important to recognize that the Faculty also bears responsibility for this situation. Since the budget crisis began, of course, we have been forced to react and play defense. Given the way that the last year has played out faculty have focused their efforts on preventing the implementation of the most damaging restructuring proposals and supporting student opposition to fee increases, indeed on having to support student free-speech rights in the face of efforts to suppress protests themselves. But these immediate pressures build on long-standing problems.

The faculty has reached the breaking point of a long-standing division of labor with the upper administration; that in exchange for allowing us to go about our normal everyday academic business the Administrators would be left to make basic budget decisions with minimal faculty input. Whether this compromise made sense in the past (and I have my doubts given the ways that the core functions have been increasingly displaced) it clearly is no longer tenable. The budgetary crisis has meant that unless we do a better job of defining what we think to be the core mission of the university, the financial managers will do it for us. And we have yet to do that in a systematic way.

Any such effort should start with the Senate. Again, many faculty members have been working on Senate committees to develop priorities and protect core programs. And the recent system-wide Senate Planning and Budget Committee “Choices Report” has attempted to put forward Senate perspective on priorities. But that is not what I have in mind. The Senate, both system-wide and the Campus Divisions, must take the lead in pressing for far greater transparency in the budget than now exists. The faculty throughout the system is being asked, or will be asked, to reexamine priorities, administrators are looking for ways to cut costs, and the burdens will ultimately fall upon departments and programs. But if real budget reform is to occur it has to be through knowing participating and shared responsibility between administration and faculty.

The only way this shared governance can occur is if the Senate succeeds in lifting the veil over the budget realities and choices that are being made every day. In fact, given the demoralization that has occurred as a result of the organization of UCOF, budgetary transparency is a necessary first step towards getting the faculty at large to believe that they have any real say in the matters at hand.

But budgetary transparency can only accomplish so much. It can make clear the structures of funding and costs, and clarify the choices that are being made. But in order to reverse the relationship between educational and budgetary decisions faculty will need to do a better job of indicating what we believe the core goals and functions of the University should be. That vision ultimately may be voiced through the Senate; but the Senate is not going to do so unless it is pushed from below. How we can start a discussion that could lead to pushing the Senate is of fundamental importance.

It may be, of course, that the faculty has not agreed on such a vision because they cannot agree on such a vision. Disagreements between Humanities, Social Science, Physical Science and Life Sciences are well known—they go back to early modern conflicts between the champions of the Ancients and the Moderns, the Utilitarian and the Classical. But the reduction of intellectual activity to the marketable and immediate should motivate us all to begin to rethink those divisions (indeed the recent displacement of the physical by the life sciences as the central recipient of funding should remind all disciplines how unstable predominance in the eyes of the market or state can be).

The defense of the core educational functions of the University, I would argue, begins with a renewed vision for undergraduate education. To reformulate undergraduate education the University must revalue its commitment to the place of General Education in the curriculum. It is essential that the long-standing division between “science” and the “arts” be addressed and overcome. Students (and faculty of course) need to able to link both sides of that "divide" if they are to critically and constructively engage with the world. The first project of the University should be to ensure that the University provides students with diverse and complex intellectual literacy: conceptual, cultural, experimental, historical, linguistic, and scientific. From these bases, students would be able to move to their concentrations and also carry more general understandings out into the world.

Departmental majors could be built atop this general literacy rather than on specific pre-requisites and increasingly narrow training. Students would still get the concentration they need in order to continue to further and deepen their learning; but they would also be given the general competencies needed to contribute critically to the world. Just as importantly we could insist on the connection between those general competencies and the more specific research inflected teaching provided to students.

The necessary combination of research and teaching would then become clearer to the public. In order to make this happen, faculty members should be encouraged to move beyond their departmental silos, not in search of some new master discipline, but in order to bring into being discussions about the ways that different forms of reason bring different perspectives to shared issues and indeed create new questions and arguments. Indeed, it is the rich diversity of research forms and agendas at UC that could make this project so successful. Insofar as we are able to able to bring the interplay of these different research agendas into the curriculum the relationship between research and teaching will become much clearer. Graduate students could be trained both to pursue their specific research interests and to provide instruction on both the general and the disciplinary.

The vocation of the University would be reaffirmed as a place of teaching and research; of learning in a broader sense. It is the task of the faculty to ensure that the rethinking of the University happens on the grounds of that broadened sense of learning. Otherwise budgets will not follow aims; aims will be directed by budgets.

By Bob Samuels

I would like to suggest here what the UC’s faculty position on pension contributions should look like. First of all, we should only accept the new plan if they promise to put employees on the pension board, and they allow for a public hearing to study the handling of the investments. Here is my fear: we will pay in more money, they will take out an expensive bond, and then they will continue to invest the money in an ineffective manner.

Here are the historical issues:

1) the UC started underperforming comparable pensions (including CalPERS and CalSTIRS) after the management of investments were outsourced in 2000 (this outsourcing was pushed by a Regent, Gerald Parsky, who had a vested interest in the privatization of the investment management);
2) since the UC now has over 50 money managers, it can not effectively control or diversify its assets, and it has to pay huge fees, while these money managers may be betting against each other;
3) the Regents may be influencing the UC’s investments in order to support their own business interests (real estate, private equity, high finance, construction) – individual Regents could be doing this by influencing the choice of money managers;
4) Like CalPERS, what may be happening is that middle men are being paid to find external money managers that represent the interests of particular regents;
5) the UC increased its holdings in real estate and mortgage-backed securities right when the market was tanking; these decisions may have been influenced by the Regents who have strong holdings in real estate and financial securities;
6) the Regents and UCOP are hiding the ineffective management of the funds by claiming that everyone lost money during this period, and that the real problem is the contribution holiday (while the holiday is a problem, do we want to hand over more money so they can bet it on toxic assets and cater to the Regents’ business interests?;
7) In order to chase higher investment returns, the UC has increased its stakes in highly volatile areas (private equity, real estate, securities, hedge funds); these investment allocations have to be studied and monitored – (Harvard and Yale have brought in more of their investments in-house and are pulling out of private equity and other non-traditional investment vehicles);
8) the actuarial projections of the pension plans under-funding are based on many questionable assumptions, like the future rate of investment return (even with the mismanagement of the funds, the UC twenty-year average of 13% is way above the 7.5 rate the actuaries are using); Most public pensions are funded at 80%, and this is considered solvent, so why does the UC have to be at 100%?

I think we should support starting up contributions, but we should use our leverage to safeguard the investments. Also, while it seems that I am contradicting myself, by pointing to the low returns and the low rate of return used by the actuaries, I am arguing that we can maintain higher returns if we invest wisely.

I think we need to write letters to the chair of the Academic Council and the chair of the systemwide Senate's Faculty Welfare committee addressing these issues.

By Michael Meranze

As a follow-up to Chris' post on the meltdown of UCRP I wanted to give a brief report on some of the highlights of the UCRP Task Force Presentation at UCLA on April 6. Several Members of the Task Force were present and while I can't give a blow by blow account I can point out some of the plans that they are seriously considering. They went out of their way, in good task force fashion, to indicate that they had not finalized any recommendations and that in the end they only would be making proposals to UCOP. For some reason they seemed to think that people are suspicious of their efforts.

1) The Task Force acknowledged that the University has a legal obligation to honor the pension commitments as they have accrued up to this point. Exactly how they construe their obligations going forward is less clear to me. Stressing past obligations could simply be a way of indicating that they are going to be raising our contributions more than is presently planned or it could mean that they are considering changing the benefits ratio for future earnings. They are thinking of changing the eligibility requirements in terms of age and years of service but it was unclear whether this change was for new hires alone. Indeed, they made it clear that they are still discussing where to set any cut-off point for grandfathering of the old eligibility requirements.

2) They are thinking of "offering" new employers a defined contribution plan. The entry wedge here appears to be the Medical Centers. In the case of the Medical centers they claim that a defined contribution plan is a better option for employees. But they are also thinking of making it an option for new employees. They are considering a new tier for new employees in any case: higher age and service, higher contributions, lower payout--indeed for all of the rhetoric about how nothing has been decided I think it is extremely likely that they will propose a different system for new hires. For example they now promise a defined benefit regardless of social security. One thing that they stressed was a proposal to include social security in calculations of benefits and to lower the ratio at which benefits would be calculated from 100% to possibly 80%.

3) They are clearly going to seek changes in the retirement health plans--either through higher benefits, a redistributed ratio in the amount that UC vs. the Retiree pays. Apparently now UC pays something like 89%. They are talking about gradually lowering it to 70%. They are discussing possibilities for structuring the situation so that people chose not to retire until they are covered by medicare.

Again, the Medical Centers are an interesting case because, according to figures presented today, the retirement health benefits to medical center employees are hugely over market averages. They are considering bringing them more in line. Interestingly, although there was also data that suggested that salaries for Senior Managers in the Medical Centers were also above market, there was no discussion of lowering those in order to save money.

4) Shane White was there as the Senate Representative. He spoke quite forcefully against the proposed changes in benefits and indicated that the Senate would oppose them as well.

5) Peter Taylor seems opposed to the UCFW proposal on bonds. As far as I could tell at the heart of his objections apparently is his fear that the UCFW bonds would crowd out other bonds that the University might float. Interestingly, he suggested that should these bonds be offered UC might be forced to draw upon student Ed Fees in order to pay for them. When asked about the relationship between student fees and bond service (the "Meister Controversy) he again insisted that no Ed Fees had been used to cover construction although he did indicate that Reg Fees had been used that way. If I heard him correctly he seemed to want to make a distinction between fees having been "used" and "pledged." He did not deny that Ed Fees were pledged as collateral but wanted to insist that they had never been actually used to pay off debt. Again he suggested that practice might change if the UCFW plan was implemented.

6) They trotted out the LAT opinion piece (written by an aid to Arnold) and the Stanford study (sponsored by Arnold) to point out the difficult political climate. I pointed out that since they seemed to have given up on the state funding UCRP I wasn't sure that this was relevant and suggested they were piling on. In response to that someone from UCOP insisted that they were still in negotiations with the state to get them to resume contributions and that whereas that wasn't going to happen right away they hadn't given up hope.

7) They insisted that they had heard the input from faculty about how central the retirement benefits are to recruitment and retention. So further pressure may do some good there.

There were a couple of points that I think were left very vague and that I did not think to press in the meeting. But they may be worth pursuing as the Task Force visits other campuses.

A) Where does the money go if there is a shift into defined contribution plans? At the present time, all of the money for retirement is centralized. But if UCOP opts for a defined contribution option for new hires then wouldn't the contributions of those individuals need to be removed from the general fund? If so, wouldn't the overall actuarial gap be increased?

B) This seems especially pressing concerning the plan to allow the Medical Centers to shift to a defined contribution scenario. As I understand it, part of the large actuarial problem is that while the Regents have not been contributing to UCRP, neither the clinical enterprises nor outside granting agencies have either. So each dollar that the Regents don't spend means two other dollars not spent. I understand that if the Medical Centers shift to a defined contribution plan the overall liability will decrease somewhat but so will the money being placed into the system. There was no clarity concerning those numbers or considerations.

UC's state-paid employees took about an 8% pay cut this year.  On April 15, the total cut climbs to 10% with the restart of contributions to UCRP.  Income over the Social Security wage base ($106,800) will be withheld at 4%.  The base rate of 2% is expected to rise to 5% for employees (the current CalPERS rate) in step increases of 1% a year.  The employer share is also slated to rise: under the Regents' 2008 "Funding Policy," under a "Slow Ramp-Up" plan,  employer contributions rise 2% a year starting July 2011. 
UC salaries are already 10-15% below salaries at comparison universities, but UC's outside consultants have long claimed that UC's pension plan was so much better than the others that it brought "total compensation"at UC into a strong position.  This claim was continuously contested by the relevant Senate committees, but in any case that argument is over.  At a 5% contribution level, the "value of UCRP to active faculty is below the average value of pension plans at the Comparison 8 universities" ("TIFR Recommendation to assure Adequate Funding for UCRP, p 11).

Take a deep breath, and ponder the sheer speed of UC's deterioration as a workplace.

Then ask, why restart contributions now, in the same year in which pay was cut? The simple answer is that UCRP was shifting from being super-funded to being underfunded even before the financial crisis, and the restart was set in motion two years ago.  A good summary of current official estimates of the problem is in this Regents presentation, given by UC's actuary, the Segal Company, which shows the decline of the funding ratio (assets over liabilities) such that pension commitments could no longer be funded 100% by UCRP investment income.  (Most pensions fund about 75-80% of their benefits from investments, and depend on employee and employer contributions for the rest.)

Commentary on the subject is all over the place.  The most thorough public document is the Senate's, linked above.  This is absolutely required reading on the subject, and I'll come back to it.  Bob Samuels has suggested that a new actuarial rule is being used to overstate liabilities, create a crisis, and reduce retirement benefits.  On the other hand, one faculty participant on a listserve has suggested that Regental mismanagement has led to such a large and genuine underfundng crisis that the University might consider "letting the pension fund go bankrupt," forcing the Pension Benefit Guarantee Corporation" to pay off pension obligations.

A UC economist who has followed the discussions splits the difference.

I don't think there's any question that the green-eyeshades people in Oakland want to cut benefits anywhere they can. But the crisis is indeed real. The funding status of UCRP will continue decline because the figures reported are using actuarial and not market returns.  Only 1/5 of the meltdown is recognized each year, using actuarial smoothing.  (This isn't misleading, it's openly acknowledged, and an acceptable way to keep annual contributions from being overly volatile.)  PERS uses 15-year smoothing. So we can predict how the funded status will decline, as we "recognize" more and more of the losses, through 2013.

This economist confesses some bafflement at the variations in the amounts by which the pension is said to be underfunded, and then adds an important political comment: since the state is unlikely to restart its support for employer contributions, these will increasing depend on increased student fees.  (Fees are relatively fungible UC revenues that currently help pay for salaries, among many other things).    This puts student and faculty interests increasingly at odds. If new faculty hiring stalls, it's possible to imagine a rapidly aging faculty, already overrepresented in the Academic Senate, consenting to higher tuition out of pension self-interest.

In addition, UCLA's Faculty Association offers a thorough backgrounder on UCRP in the context of state public pensions.  It calls on the state to live up to its obligation to fund the employer contribution to the pension, which the state has so far refused to do.  UCLA's FA also suggests discussion of a "tier 2" plan for new employees.

My own review of the situation started with a Stanford policy brief about California state pension, written by some public policy grad students advocating a more complicated way of assessing liabilities.  If you look at Table 2, you will see that in their "adjusted' accounting of UCRP liabilities the funding ratio is an alarming 59.3% (meaning that only about 60% of liabilities are covered by assets).  But the stated liabilities, using the standard method of discounting liabilities in lockstep with (smoothed, estimated) investment returns, are nearly 99% funded as of July 1, 2008.

I am not qualified to comment on the value of the Stanford authors' probability-based "stress test" for pensions, but am doubtful of the foresight of such modeling-- triply so in the wake of the financial crisis, whose tandem epistemological crises have yet to be resolved.  So I  humbly note that the stock value crash that occurred later in 2008 will be smoothed over 5 years, that the funding ratio is based not on market value but on actuarial value as noted above, that this method brought the funded liability to 95% after the crash (slides 7-8),  and that the ongoing, non-drastic downward smoothing will be partially countered by the bounceback of equity markets in 2009-10.

So far, this looks like less than a major emergency.  A "gentle ramp-up" on contributions? Yes. Weighing better accounting methods, investment strategies, and accountability? Yes. Rethinking the status of UCRP and public pensions?  No.

But it gets worse.  The issue is the gap between the Segal Company's Recommended Contribution and UC's actual plan for restart, the Slow-Ramp Up.  The Recommended Contribution was 11.6% of covered compensation for 2009-10 (due by the end of 2010), which would come 2% from employees and 9.6% from the employer. Segal recommended nearly doubling this to 20.4% in 2010-11, the current year,  3% from employees and 17.4% from UC.  This Recommended Contribution is based on the scary action in Segal's Regents slides in Slide 12 and Slide 13. The really big pension funding gaps - $10 Billion in 2010, $20 Billion in 2014, and so on that we see there, comes from projecting the effects of continuing insufficient contributions from both the employer (via the state) and the employees, causing the Unfunded Accrued Actuarial Liability (UAAL) to grow each year.

Is the red line a scare tactic designed to induce employees, already financially destabilized, to take more money out of their shrunken pockets?  We have no way of checking the public math because there isn't any.  The red line does seem to be a worst-case scenario, based on projecting low contribution increases (the Slow Ramp-Up of 2%/1% annually) out into the future, and coupling these with unknown but probably pessimistic assumptions about investment returns (not still 7.5% / year?).  We need more explanation of the generation of these scenarios before we react to the bad one.

But now we come to the Senate's TIFR report, cited above (TIFR stands for Task Force on Investment and Retirement, and it is part of the systemwide Faculty Welfare  Committee (UCFW).  TIFR has looked at the math, has better access to UCOP data than any other systemwide Senate committee, and has membership that doesn't rotate and so keeps its accumulated expertise.  Their report is as scary as Segal.  The "Slow Ramp‐Up," they say, "will lead to a catastrophic underfunding of UCRP over the next 15 years" (6).  There are a number of factors-- do read this report of 13 double-spaced pages--that starts with a gap of 10% between recommended and actual contributions in 2009-10, and 14% in 2010-11. In this scenario, the gap compounds, until by 2022 the contributions rise to 50% of covered compensation, doing further major damage to UC's ability to spend money on actual education.

Underfunding looks inevitable: the state won't pay the costs of the employer start-up, UC seems not to have the money, most employees are broke, and in fact they got their contribution "holiday" in the first place to make up for flat or falling pay during the cuts of the early 1990s. Although the assumptions and scenarios need to be checked, and although I would like to know if they are assuming everyone retires at once as some suggest (and as dumb an assumption as that may seem), I have no grounds to doubt the TIFR-Segal projections.

If more laissez-faire will lock us into a death spiral, what would get us out of it?  We have the usual two funding sources of sufficient size - major student tuition increases, and restored state money.  TIFR recommends adding a third - the issuance of "Pension Obligation Bonds" as a way of providing the employer contribution (employees would still pay through their income).  The idea is that paying interest on the bonds is cheaper than making up the shortfall later on.

That is no doubt true, but I have two objections to this TIFR proposal.  The first is discomfort with older people borrowing to pay for their stuff and sticking the young with the bill.  We've been funding state services this way in the Arnold era and it isn't right.   The second is that raising money with bonds is like raising money with tuition hikes: both allow the state to say, "good, you've solved your own problem, no further need for you to come running to us."

The only solution I see is restoring public funding on the multiple educational grounds this blog has often described, with the added twist that refusing to honor pension payment obligations sets UC up for a step-function decline.  How low does Sacto want us to go?

This solution of extracting state support for its retirement obligations has to buck pervasive predictions, as in an op-ed by a Schwarzenegger aide in today's LA Times, of a coming pension nuclear winter.  These predictions could at some point persuade the state to two-tier and eventually eliminate its public pension system.  I can imagine the Gov. Meg Whitman special commission on the pension crisis, a Parsky promotion of an "employee independence from unaffordable pensions" scheme, an Edley endorsement, a ballot proposition like that of 2005, and a "Fast Ramp Up" phase out of future accruals and benefits.

So expert groups like TIFR need now to put as much energy into solving the UCRP problem as they have put into exposing it-- in a way that fits with the public character of the university.

By Michael Meranze

“Once we allow ourselves to be disobedient to the test of an accountant’s profit, We have begun to change our civilization.”
John Maynard Keynes

Despite the claims of its leaders and proponents, Wednesday’s rollout of the first draft of UCOF recommendations reveal that far from being “a brave first take” as President Yudof would have it, the Gould Commission threatens to throw the University into a headlong embrace of the most conventional assumptions of a public philosophy that has led the United States into economic, political, and social crisis. At precisely the moment when the decades long denigration of public commitments in favor of private interests has led to profound economic crisis, when the high-tuition, high-aid model in higher-education has proven unable to sustain wide-ranging access, when the effort to reduce value to a question of marketability has revealed its larger implications in failed schools, cities, environmental degradation and growing inequality, the UCOF process proposes to remake the University in the name of market efficiencies. Rather than breaking with past UC practices, the concrete proposals of the Gould Commission would simply entrench the shift from public support to private fee, the disengagement of research from teaching, and the expansion of the non-educational sectors of the University.

To be fair, there are things to applaud in the workgroup reports—signs of individuals’ efforts to push back against the narrow framing of the UCOF process. For one thing, both the “Access and Affordability” and the “Funding Strategies” reports make clear the absolute centrality of state support for the University. Indeed, the Working Group reports challenge the often-repeated assertion that UC must accept the reality of declining state funding and rely more and more on private and individual contributions in order to survive. Instead they demonstrate that UC’s leadership’s acquiescence in declining state support and plans to compensate on the backs of students is doomed to failure; even without the obvious ethical and political problems the funds would never be sufficient for the University to flourish. Instead of this passive acceptance, the Working Groups recommend a much more active and consistent effort to regenerate public support and public pressure in favor of the University. For another, both the Funding and Research Working Groups have made clear the extent to which core funds have been underwriting external research in the University for decades. The reports offer a variety of plans to try to raise the rates for Indirect Cost Recovery—proposals that would generate large sums of money. The Research Working Group has acknowledged the importance of breaking down the insidious distinctions of the value of research based on funding opportunities, and recognized the various ways that research remains a public good. The “Access and Affordability” Working Group in particular emphasizes the centrality of the commitment to access to the University and the need to acknowledge the University’s uneven success in meeting that commitment. In particular, they ask for a reaffirmation of the University’s promises to California’s High School graduates and of the University’s responsibility to disadvantaged students. Finally, several of the Working Groups recognize the importance of a serious effort to re-engage the Federal Government in the support of the University in the widest way—and not simply in the support of discrete research projects.

While welcome, many of these statements of commitment bear little relationship to the practical heart of the Working Group recommendations. Instead, the substantive proposals to confront the budget crisis all continue well-established, internal UC practices. Rather than an effort to rethink the way that the University operates or conceives of itself, or a meaningful effort to restore the public heart of the institution, the UCOF proposals simply intensify trends that have been in place for the last decade—trends that have contributed to the depiction of higher education as a private service rather than a public good.

For all of the laudable rhetoric about the importance of public support and funding, and despite the important recognition of the distorting and damaging effects of the structure of ICR, the “Funding Strategies” report, as Chris has shown, centers on a dramatic increase in student fees (renamed tuition) as well as an expansion of out-of-state students. These proposals could eventually double the costs for instate students and raise those for out of state students to nearly $40,000. Yet even with these numbers (and with the expansion of out of state students) the rise in fees would not cover the recent cuts in state support. Just as importantly for the long-term character of the University the logic of these fee increases—or at least the logic of how to calculate them—is done solely according to the elasticity or non-elasticity of demand. Put another way, the calculations being proposed are not based on a project of making the University as accessible as possible but rather on one designed to raise costs as high as possible without losing consumers.

By the same token, despite the powerful restatement of the rhetoric of opportunity in the “Access and Affordability” report, the history of high-tuition, high-aid programs demonstrates that access is in fact lessoned considerably. The percentage of Pell Grant recipients at the University of Michigan, to take only the favorite comparison institution, is little over half the lowest percentage in the UC system (UCOF, 96), while the University of Virginia to take another favorite comparison has lower percentages than Michigan. Moreover, while the Working Groups bravely insist that there should be a new contract with the state the historical evidence strongly suggests that raising fees simply allows the state to lower its support for core programs. Again, put another way, rather than a departure from the practices that have landed the University in its present fiscal crisis, the tuition model will simply exacerbate them.

Not surprisingly, the contradictions of the recommendations are clearest in the “Educational and Curriculum” Working Group’s report. Rei Terada has effectively dissected this report so I will not belabor all of it. As she forcefully demonstrated, the systematic effect of their report is to ask students to pay more for less: encouraging the “buying out” of senate faculty and their replacement by lecturers and graduate students, pushing to expand online programs despite their checkered history, finding ways to shorten time for degree in exchange for a decline in student options, etc. But even more striking is their diffidence in defending the notion of a quality education. As the work group puts it (49); “The Education and Curriculum Working Group believes that maintaining the quality of UC undergraduate, graduate, and professional education at the highest levels possible should be a top priority.” “Believes”? “Should be”? “A” top priority? Compared to what? Are there higher priorities for the Working Group? Why such diffidence? Leaving aside the question of defining “high quality” the report seems to confirm what many fear—that there are forces within the University who believe that educational quality (which UC has always insisted includes teaching and research) is not “the” core priority for the University.

In fact, this diffidence gets to the heart of the problem with the UCOF process. The Working Group reports are filled with the language of “inputs” and “outputs,” “best practices and efficiencies,” “metrics” and “value-added,” “elastic” and “inelastic” demand. Of course, who could be opposed to “best practices”? But “best practices” and efficiencies” to what end? If the aim of a fee system is to maintain the widest possible access then the best practice is different than if the aim is to raise as much revenue as possible without losing consumers. If the aim of efficiency is to lessen administrative costs then the best practice will be different than if it is to cajole or compel faculty into more uniform departmental practices. If the goal of a course is to create a repeatable commodity that can be viewed individually at any time while earning revenue for the University then the best practice will be different than if the aim is to provide opportunities for students to learn from each other’s questions and engage in a give and take with a teacher. If the aim is to give priority to funds coming from external grants and fee for services then the best practices will be different from emphasizing the shared core programs and responsibilities of the campuses.

Remarkably, the questions of what the University is for are barely touched upon in the Working Group reports. Instead of an evaluation of purpose or a searching discussion of the place of higher education we are overwhelmed with languages more appropriate to a cultic bowing down before the Gods of Accountancy. But as has been pointed out so often, the Gods of Accountancy may teach the price of everything but they teach the value of nothing.

If we approach all questions through the lenses of managerial logic and markets we will only get answers in the logics of managerial calculations and markets. But it is that logic that has devalued so much of what makes the university worth defending—and life worth living for that matter. And so UCOF proposes to continue and intensify attitudes that have helped create the crisis in the first place. Despite all of the rhetoric, we are not witnessing administrators making “hard choices” (it is always interesting how their hard choices tend to hurt others rather than rebounding on themselves) but a pretense of new departures and imaginative approaches to the future.

Indeed, UCOP shows no indication of resisting the prevailing finance and market mentality. In supporting the online proposals President Yudof remarked that “'In the long run, (expanded online instruction) will happen at one of the great research universities,' .... 'It's just a question of when. I'd like to see UC play a leadership role.'" But this statement does not mark UC as a leader but as a lemming. We must do it because someone else might; we wouldn’t want to miss out on market share after all. But what if the spread of online courses had more to do with profit margins than with educational opportunity? What if the purpose of education was less the capacity to absorb knowledge than to think about it critically and in dialogue with others? But what if the University actually acknowledged the damage that has been caused by the reduction of values to market share? What if it refused the misapplied realism that has devalued the public and the community?

The time has come to refuse the false wisdom of Christopher Edley when he dismissed the “consultation process which typif[ies] the University” while insisting that “budget discipline comes from the top-down.” I would insist that contra Dean Edley “we cannot afford [not] to go through the normal consultative process” and that the last thing we need is a “more muscular central system” when we have no idea what values—other than economic efficiency--guide the administrators. Ironically, what Dean Edley would give us is the worst of two worlds—the primacy of vacuous notions of market efficiency and the undemocratic imposition of central planning. It would be as if we combined the worst of high-modernist city planning with the worst of the financial industry’s denigration of long-term sustainability in order to protect the lack of transparency and growing inequality in the institution. Such a combination would prove lethal to a community devoted to open inquiry, research, and teaching.

We are clearly at a crossroads in the UCOF process. The first round of recommendations is precisely that—a first round, a testing of the atmosphere. If the faculty sits back instead of arguing back the Regents will reinforce the trends that have helped bring about this crisis while exploring new means to shift the UC away from being the foremost public higher education system in the country. People need to speak out in whatever forums they have. And they need to so without delay.

by Viviane Michel

To an interested outside observer, it is puzzling why the best public university system in the world saddled itself with an unproven, cumbersome mechanism of self-reflection: the Commission on the Future of the University of California. But one need not jump to the conclusion, as some have done in the press, that the culture of the university prevents innovation and change. On the contrary, if there
was ever an organizational form devoted entirely and fundamentally to innovation and change, it is the form of the university. No other organization in the state of California has a comparable mission: to enhance the life of all citizens of the state through teaching, research, and service.

Of course the Commission had to have representation from all 10 campuses and from the vice-presidential level at the system headquarters: a university is decidedly not an organization defined by its central management. This was acknowledged from the outset by voices from the President's office and from campus leadership. Try single-handedly mandating curriculum changes, policy changes, risk management changes, fiscal changes, or whatever you would like to try: it cannot legally or practically be done without full consultation. Academic freedom and shared governance are enshrined in the rulebook, and for very good reasons. They are major factors in what makes any university great. Unfortunately, this is easily forgotten. Nonetheless it is an integral part of higher education, and a primary reason for the success of universities over the past several centuries. Yet celebrating this also means acknowledging the complexity that results.

For such a complex system, an unprecedented process like this Commission on the Future poses a daunting data-management problem. One can only imagine the amount of emails, phone calls, agenda items, attachments, proposals, memoranda, policies, and comments distributed across dozens or hundreds of computers. Even if one surmises that the collectivity of such documents is thus organized in arbitrary ways that certainly mask some redundancy and cross-reference, one can safely assume the amount of sheer data - numbers, excel sheets, longer and shorter texts, graphs and curves - is not fully represented in the voluminous PDF of recommendations the Commission posted online yesterday. In turn, the Commission's own structure, with a steering committee coordinating five working groups whose total membership goes into three figures, is only an approximation of the kind of collective effort that must go into helping to run an organization as complex as this large public university. The apparent hierarchy of the Commission masks a structural need to involve multiple lateral levels, muc  in the way the operational management of the university seeks to mask the complexity of the academic enterprise.

One may go further and bet that comments, responses, and rehashed as well as new proposals are even now inexorably accumulating within the noisy channels of shared governance. By "noisy channels" I do not mean that the Commission's work, the central administration's staffing support, or the Academic Senate's activities are mere gossip or background - on the contrary, they are in fact crucial to the operation of the University, with powers explicitly delegated from the state via the Regents to the faculty. But it is clear that these days especially, educational assessment, administrative accountability, research support, and other aspects of any academic enterprise are intensely data-driven.

The question about "noise" is how, and at what point, such an accumulation of data, such a steady flow of phone calls, webcam conferences, emails and other online encounters, turns from sheer quantity into quality. At what point do data enable decisions, formal recommendations? This question must be rephrased as a question about defenses against complexity. For the faculty members and administrators involved, the sheer amount of data is enough to overwhelm every hour left available between student contact hours, lecturing, preparation and grading, and other such routines and mandatory frameworks of the academic year.

Systems theory describes this sort of management as producing the distortion that brings a complex system into equilibrium. The conditioning that the noisy channels of shared governance (shared between campus administration and faculty members) introduce is preferable to the overwhelming complexity of the system's raw data feed. It is an illusion that an organization as complex as a 10-campus university (each campus composed of schools division, and they in turn organized in departments, but with a flat hierarchy that affords few controls) could ever be directly administered centrally. Indeed the opposite is the case: central administration might wish to portray itself as the direct cause of certain institutional effects we observe, but they actually cannot affect such change directly (I will spare us all a long list of empirical historical illustrations here). The illusion is maintained in order to communicate to the large organization a vision of itself - but it is an impotent vision that strips away the noise, the essential complexity. This pleases many of us in its simplicity, although we may well intuit how inaccurate it is. The levels of central management that appear to control the university's operational functions certainly have more direct influence over the corporate auxiliaries and profit centers at the margins of each campus - housing, parking, medical centers - but such hierarchical influence is felt far less in the main campus areas, where general management is de facto and de jure a matter of shared governance within the legal framework of the institution.

Of course there are lots of controls in academia - internals levers, ranging from curriculum committees to peer review of proposed publications, and external limits, ranging from limited and shrinking higher education budgets to the quality of the high school education incoming students bring to the table. But largely their contribution to the complexity of the mission of the university is irreducible - they cannot be "managed away". Management in any kind of large organization is confronted with complexity. Operational management refers the uncertainty of appropriate ends and useful means to economic markets. General management refers the necessarily resulting internal tensions to modalities of the organization. Corporate management refers the allocation of power and influence to the social and political challenges of our times. In each mode, management is not just a way of coping with uncertainty, but also a way of cultivating uncertainty. It is clear to most observers of higher education that university management is assuredly not a reduction of short-term questions to the most efficient response. There are no case studies in MBA courses on total control of an academic institution. Inversely, the axiom that we "do not already know" is a fundamental academic virtue.

By emphasizing this as an intrinsic defense against over-stimulation, we may cast shared governance itself in a defensive role - and we do so advisedly. Campus administration and the Academic Senate must play defense: not only because there are some perverse voices on the Commission who get a rise out of portraying academia as hide-bound and in need of some simple and long overdue change-management (sell the buildings, fire the faculty, outsource teaching to online distance education) - certainly there are always going to be some resentment-mongers, given today's political spectrum in California. Yet at any given moment, and even in the best of times, proper shared governance necessarily overwhelms. All administrators and faculty members know this and can attest to it. Whether one believes that this is because administration is bloated, or because few unpaid volunteers among the professoriate pick up the slack for the many faculty who avoid such chores, or because the university has always been in the idea business and thus all sorts of ideas are always bounding around: the fact remains that shared governance confronts all participants with considerable complexity. (In fact, if one forcefully inserts into an organic organizational system an unprecedented mechanism like the UC Commission on the Future, it can easily become a magnet for bad and previously rejected ideas, as is evident from some of the recommendations the Commission discussed publicly yesterday.) This kind of organizational complexity can neither be fully controlled nor fully understood, it can only be managed.

To that extent, the necessarily and essentially noisy role of the Academic Senate and of campus administration is defensive management.  But it is not just defense against the new mechanism the UC invented for itself: it is a more systematic response that helps explain why UC would do this to itself - by assigning the Commission the role of an inoculation, as it were. Look at one example. At the UC student Regent's live blog of the full Commission meeting, Dean Edley is quoted: "We cannot get bogged down in the endless consultation process which typifies the University. We cannot afford to go through the normal consultative process, we need a more muscular central system."  Quite apart from the fact that this lawyer should be reminded of the constitutionally delegated authority of the Regents
and the Academic Senate, it is a great quote. It is great in the way Edley's colleague Yoo provided history with great quotes about how inconvenient international treaties about torture are to those who desire greatly expanded authority. (But if we wished to amuse ourselves with cartoonish ideas of Edley cast in the role of Kissinger to Yudof's Nixon, central casting would correct us and point out that perhaps it is Yudof who resembles quick-witted and jowly Kissinger, while Edley's public persona may recall Nixon's bundle of resentment and authoritarian ambition.)   More to the point, the inoculations offered by Commission members like Edley will boost the university's defenses. Even the most casual observer of higher education knows that online delivery of courses has in fact lost dozens of universities million and millions of dollars each. It works well for some forms of training and testing, but it is not education, even the most populist critics of US universities acknowledge as much. So it may be a good thing in times of crisis to force the institution to recall its core virtues, and to communicate them back to its central administration, even though the ranks of Yudof's advisors are oddly thin on people with a solid grounding in a main campus research discipline.

Perhaps one unspoken recommendation issuing from the Commission is that the President's office must not rely too heavily on professional school faculty. For the Commission to be successful, for the UC to succeed, the challenge is to involve enough people from the very core of enough campuses, instead of letting a few ill-tempered outsiders who have yet to acculturate to main-campus academia ruin the institution. For instance, one cannot (and indeed must not) recommend fiscal changes without understanding the historical, piece-meal evolution of the university's funding; and there are major inequities and grandfathered differences that compounded over decades that UC must rebalance before anyone even begins to discuss differential student fees by campus or major. Likewise, there is award winning competence in risk management on some campuses, and this know-how should be shared and understood before another campus obliviously claims to have hired the right consultants that will enhance the university's efficiency. Vague claims about potential administrative efficiencies run the risk of ridicule if they remain unquantified; more importantly, they certainly should not be generalized from one campus to another (let alone from a fat campus to a lean campus).

The press keeps reporting about administrative bloat in state government and in the state's education sector, yet none of the UC Commission's work groups took it up. The compensation scandals in the office of the UC President have not been forgotten; scandals in the UC medical centers have not stopped. Perhaps only the state audit of the UC can yield a clearer picture of this complex system's budget.  Meanwhile, it is equally obvious that the bulk of our politicians do not value the state's research university system any higher than they do their own community-college alma mater. UC was once the envy of the world; circumspect planning for our public university's future to remain so is appreciably complex. And for that reason alone, it cannot be left to those who cling to bad ideas from the dot-com boom era.

by Rei Terada, Professor of Comparative Literature, UC Irvine

UCOF'S EDUCATION & CURRICULUM RECOMMENDATIONS: LESS FOR MORE

The proposals offered by UCOF this week quite literally ask students to pay more for less instruction. How to get them to pay more is covered under the funding recommendations; how the UC might deliver less instruction is covered in the section called “Education and Curriculum,” which will be my focus below. I’ll try to give an analytic summary of this 25-page section (pp. 29-54), as well as to suggest some larger concerns that emerge from its reading.

(1) The first set of Education and Curriculum recommendations (pp. 29-35)suggests moving students through degrees faster, for example by raising average credit loads, changing or “streamlining” requirements, and increasing summer and cross-campus enrollment. This set of proposals includes possibilities that could benefit students by facilitating graduation; transfer credit, for example, might be treated less bureaucratically, and major requirements could become more practical to fulfill. In a system so revised, however, students may also have less leeway about when to take courses, tighter add and drop deadlines, and more regimented courses of study. Further, another goal is to get them to graduate with fewer UC courses all together, through increased use of AP, high school, and community college credits and by lowering the total number of units students may take. In an obvious sense, a three-year B.A. gives less UC experience to the student even as fees are desired to rise.

In addition, the UC courses students do take would be less likely to be taught by ladder faculty. For the recommendations wish to “make more effective use of faculty resources” (29), or, bluntly put, to pay less to get courses taught. The working group suggests “extend[ing] the use made of research grant funding to buy out ladder faculty from instruction” while deploying lower-paid lecturers and graduate students to “backfill” the gap (29). In this all-too-appropriate construction metaphor, ladder faculty are removed by excavation, while lecturers and TAs are the gravel you scrape back into the hole. The “fiscal implication” of these recommendations for “the state and the University” is to “reduce the cost per degree . . . by efficient use of campus facilities and instructional personnel” (31), and the long-term “implementation method” that corresponds to this suggestion is: “consider changes in mix/type of faculty deployed to various courses” (32). So, savings are realized by channeling students and faculty into non-UC courses, summer sessions in which ladder faculty are paid less per course than in the regular academic year, and by using cheaper labor. The supposed benefit to students is that by graduating earlier, they will “have the opportunity to reduce their total costs”--costs that need reduction because the Regents are raising them even while continuing to lower the cost of the instruction they are receiving.

It's well-known that instruction is the only part of the UC budget, in distinction to capital and administration, where expenditures have been on a downward course. On the educational level, to ignore the implications of “changes in mix” of teaching staff is to refuse to recognize that top universities maintain their reputations by maintaining students’ access to tenure-track faculty. On the level of labor relations, graduating students on the basis of fewer courses necessarily reduces the ranks of ladder faculty, not just while they’re off doing research but structurally and permanently. The ladder faculty’s ability to shape the UC would be eroded by emphasis on lower-paid temporary staff and graduate students who are not voting members of the Academic Senate and are excluded from the job security and governance rights of regular faculty. And that in turn would make it easier to accomplish further corporatization.

(2) The second set of Education and Curriculum recommendations (pp. 36-39) advises the UC to “continue timely exploration of online instruction in the undergraduate curriculum, as well as in self-supporting graduate degrees and Extension programs” (36). This recommendation is linked directly to the first set in that online instruction would facilitate cross-campus, high school, and community college enrollment in UC courses and hence students' graduation with fewer UC courses. In addition, lucrative post-baccalaureate degrees offered online could “generat[e] revenues that support the University’s educational mission” (38; online courses are already offered, for example, by UCLA Extension). The possible impact of expanded online instruction on student access to faculty and on the faculty as a labor force is plain enough. The recommendation is presented somewhat gingerly, in the consciousness that people are likely to regard online instruction as inferior. The working group therefore stresses that the pilot project of 40 online courses currently being coordinated by the Office of the President be treated as a chance to evaluate the quality of online courses (36; while this is not the place for a discussion of the social science of educational assessment, what constitutes valid assessment is clearly an issue). In this section “Faculty concerns, e.g., about academic quality, workload, ongoing institutional support, intellectual property rights,” are acknowledged in a single line. Students' desires for personal relationships with their teachers and fellow students and concern for the university as a community are not mentioned among the “challenges” the online education proposal faces.

(3) The third recommendation is to “expand use of self-supporting and part-time programs” (40) including UC Extension and professional M.A. programs, with a focus on “high demand disciplines” for which students are willing to pay top dollar. The third recommendation therefore echoes part of the second, in which online instruction is envisioned to be an appropriate venue for “self-supporting” programs. Many such programs already exist in the UC--in business, engineering, health sciences, and information science programs, for example. In addition to non-degree, certificate, and professional M.A. programs, a new part-time B.A. in “one or two general, interdisciplinary majors” is also contemplated. Again, these programs are imagined to be staffed in part by cheaper TA labor (41), and while additional TAships would help graduate students in the short run, substituting TA labor for faculty labor in a large program also reduces the ranks of faculty and so shrinks the employment prospects of those same graduate students.

The part-time B.A. introduces a topic worthy of discussion--increased access for nontraditional students--but in troubling ways. Instead of furnishing nontraditional students with the full range of educational and research possibilities, it offers "general” degrees, even though the “admission criteria would be the same as current transfer requirements” (41). So even though this new body of part-time students would be as qualified as other UC transfers, it would be offered a reduced range of degree possibilities in return for fees “most likely . . . approaching non-resident tuition level” (41; my italics). The “underserved population” mentioned as an example is the “26% of the adult population” in L.A. County with “some college” (40). Now, the median income of that group is about $36,000 a year. Non-resident tuition is recommended to increase from $33,181 in 2010-11 to $36,027 in 2015-16 (89). Thus before financial aid, the “underserved” (but equally qualified) student who needs a part-time degree because she must keep working (p. 40) is here imagined to be the exemplary recipient of a reduced-option B.A. whose annual fee is equal to her annual income.

The working group adds that “these programs can be designed to return a portion of the fees to financial aid,” but also that “to the extent that self-supporting programs generate additional revenues for academic departments, this improves access for students in the regular programs” (41). That "extent" would be small if the new B.A.s were structured financially like existing Extension programs; current non-professional Extension revenue is “relatively small--generating modest amounts above program costs” (42). But Extension courses are nondegree programs and presumably less valuable. So it is not clear whether the part-time B.A. would also generate only modest revenue (if financial aid was significant), or would extract it from a target group with a median income of $36,000. No justification is ever given for why part-time students equivalent scholastically to transfer students should be excluded from the full range of degrees. None of the social inequities involved are mentioned among the “challenges” to the proposal (42).

(4) The fourth recommendation reads: “Develop a systemwide academic planning framework that incorporates campus goals within the context of priorities identified for the University as a whole” (46). A new way to coordinate planning systemwide might be useful, but it is not obvious what the working group envisions. An “assessment” program is part of it; would this be a standardized assessment of programs? How standardized? And used to what end by whom? The working group wishes to “establish and routinely update an integrated set of campus and system academic priorities” (48), but does not give a clue about how this would be done, who would articulate these priorities, and how the identification and articulation of priorities might involve the Academic Senate and other governance structures. As it stands, the specific disposal of budgets handed down to individual campuses, deans, and eventually units is left to the discretion of the local entities involved. The working group suggests that “budget cuts implemented by individual campuses during a year or two may not pose immediate risk to the systemwide academic profile, but the cumulative effect of such decisions over a longer period could be quite harmful” (48), and so suggests that a systemwide body wants some measure of control or oversight over how local entities distribute the budgets they are given. Local and centralized authorities may of course end up at odds, and it is not explained how conflicts would be resolved and what rights in the matter local entities would retain. An idea of “striking appropriate balance between campus/system interests” needs to say what balance is appropriate, and to confront the possibility that the interests of an entire campus could be de-emphasized from a central perspective. Instead, the working group introduces the notion of creating “an integrated set of campus and system academic priorities” without reference to the UC Master Plan or to existing long-range plans developed on each campus before the height of the global financial crisis.

Since the question of planning process emerges in this section, it's worth pointing out that in practice the procedural form that dominates the entire document is that of the special “task force”--innumerable “task forces” are proposed to further develop recommendations that are general to the point of being obscure. But task forces are highly problematic exceptions to the structure of university governance. They are smaller, appointed, often oligarchic bodies that shape topics, deciding what's worth discussing and what’s not worth discussing, before proposals get to the properly elected bodies that eventually consider them. Justified as time-saving and convenient, they too often save us from the inconveniences of a more democratic culture.

(5) Finally, although the recommendations on Education and Curriculum repeats throughout that proposals should be explored while maintaining “quality,” its final portion (pp. 49-54) demurs from explaining what “quality” means and instead “seeks UC input on its forthcoming recommendation on quality.” By deferring discussion of the criteria by which it knows its recommendations must be measured, the working group evades most consideration of the intellectual impact of its suggestions. The definition of quality devolves upon “metrics” yet to come (49), suggesting again that assessment methods may be a future area of contestation. Usefully, faculty are stated to be the arbiters of quality in their own fields. But the background document that comprises Appendix A to this last section, “Characteristics of UC Quality Courses, Majors and Programs” (52-54), operates at a level of generality that is unable to distinguish the University of California from any other college, and so does not bode well for the ability of current assessment procedures to provide directive criteria.

So far, I’ve been reading the UCOF recommendations on their own terms and following UCOF’s presentation, but in fact its terms and presentation are part of the problem. As Christopher Newfield noted in his post on Monday, the content of the UC’s educational mission is set aside instead of being developed so that budgetary thinking might be organized to meet its principles. As it stands, when the profitability of a recommendation is being pointed out, and the phrase “support the University’s educational mission” is tacked on--as in “generate revenues and create workload efficiencies that support the University’s educational mission” (36, 37)—the statement becomes entirely circular, since no mission is ever elaborated except the optimization of assets. The recommendations on Education and Curriculum are above all evasive. They remarkably omit any consideration of connections between educational programs except when advocating the elimination of redundancy. Faculty opinions tend to be referenced under “challenges,” as they are called when the working group is afraid of faculty objections. Students' views of education and hopes for the UC are literally never mentioned, as though they did not exist. As it stands, even the financial advantage for instruction of the recommendations is obscure, because although it’s noted in several places that lucrative programs can help to fund less profitable ones, it is never said that they should. The document’s studiously impoverished account of what public education might be implies that a genuine account is somehow irrelevant. Its refusal to be articulate is so pervasive that it becomes the main message: the vision is that there should be no vision, and that no one should even have to say so.