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Friday, November 20, 2009

Friday, November 20, 2009

Doomsday Medicine

The only good news coming out of UCLA has been the student protests. They attracted lots of media coverage of the financial hardships caused by the 32% fee hikes - and of frustration with a closed decision-making process.  The coverage of the students was almost entirely positive. It included a photo of a little tasering going on next to the bushes, not long after the UCLA admin denied the possibility that students were being tasered.  The Regents did their work under police protection, and left under even heavier police protection, and they were all trapped together in the parking garage by students for 3 or 4 hours, which I doubt was enough time for them to ponder all the errors of their ways.

That's too bad, because UCOP and the Regents have made UC's finances worse, not better, with this fee hike.  A little history will help explain.

In Major Downturn 1 (1992-1995), UC lost about 20% of its state funding and raised fees (excluding campus fees) from $1624 to $3799, an increase of 134% in 3 years.

In Major Downturn 2 (2002-2005), UC lost about 16% of its state funding and raised fees from $3834 to $6141, an increase of 60%.

In Major Downturn 3 (2008-??), UC has already lost 25% of its state funding. This is by far the worst of the downturns, and is hitting the state workforce hard.  Fees started at $7126 in 2008. Were they to rise by the average of the two previous increases, or say 100%, they would be at about $14,250 by 2011-12 - up another $4000 from 2010-11 (set yesterday at $10,302).

Were the fees in this downturn to go up as much as they did in Downturn 1 (134%), they would stand at $16,685 in 2011-12.  If the downturn stays bad, more cuts will come and fee hikes will be even higher - to $20,000, with the usual stipulations about 33% return-to-aid.

The Regents this week all but locked us into this.  Here's why:
  1. Sacramento has another new deficit and opinions range from the Republicans calling for deeper and deeper cuts to the Democrats saying they don't see any way around deeper cuts.  
  2. Fee hikes take political pressure off Sacramento to restore funds.  Hikes do not make up for state cuts (UCOP estimates they make up for 1/3rd; I estimate this hike will net 2% new funds for UC's core budget.  But they create the public impression that UC has access to new non-state money, and will struggle a little but will be just fine. 
  3. Many in UCOP and on the Board of  Regents have convinced themselves "the era of public funding is over."   They correctly note that state government would like to minimize its contribution to higher ed in various ways, including through such means as reneging on its agreement to pay a share of UC's pension costs. This pessimism is, however, a self-fulfilling prophecy, and undermines strong proactive engagement before it begins.  The only alternative to public funding are large, repeated fee hikes.
  4. UCOP and the Regents have no critique of the Governor's slash-and-burn budgeting, no plan to howl about downgraded student dreams and reduced economic contributions, no game-changing plan in general, nor any announced intention to start one. 
In reality this decline is unnecessary.   Like many others I've made counterproposals (see the debate there too), and UC is full of faculty, staff, and student organizations with better ideas than what we heard from the Regents committees this week.

The first step is going to be the hardest: the Regents will have to figure out how to implement what the great majority of the UC community would like to see, rather than rejecting that every two months.


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