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Saturday, February 12, 2011

Saturday, February 12, 2011

Budget Matters (Part I)

By Michael Meranze

The pilgrimage of President Yudof and Chancellors Reed and Scott to Sacramento was notable for a number of reasons. First, while they were there for an Assembly hearing they chose to present a united front at their press conference. Instead of the usual arms length distance between the sectors, the three administrators made clear that California’s higher education future was at systematic risk. They insisted that California was at a crossroads: the proposed budget cuts building on poor public policy going back decades. Yudof and Reed, for example, both made the case that CSU and UC were effectively being given budgets equivalent to the late 1990s while the size of their student bodies had increased dramatically. Scott and Reed were more militant than was Yudof but none of them tried to deny the dismal character of the present. They each insisted that unless funding changed, the systems would shrink and increasing numbers of Californians would be shut out of higher education. Indeed, that closing off of opportunity has already begun.

Implicit in all of their comments was the reality that President Yudof’s proposed “hybrid university” could not succeed. Understandably enough, Yudof did not say this fact outright. But it hovered over his presentation all the same. In both his press conference and in his statement to the Committee he pulled down the pillars of his own conception. First, he recognized that declining state support for public higher education was not a fact of nature but a conscious, and reversible, policy decision. Second he acknowledged that neither student tuition nor fund-raising could sustain the University. Third, there was his remarkable statement to the Committee that UC loses “money on virtually every research contract that we enter into.” (Hearing at about 49. minutes in). Yudof thereby joined with Reed and Scott in emphasizing the argument that UC, CSU, and the CC could not fulfill their legal mandates without firm and growing public funding.

The problem facing Reed, Scott, and Yudof however is that—having had public funding decline for decades, something the UC Regents, at least, have been complicit in—they are now confronting a budget where they have little or no political leverage. As damaging as Brown’s budget is for Higher Education its real horrors lie elsewhere. While Brown has placed great emphasis on his proposed “realignment” strategy whereby more responsibility and revenue will be shifted to the counties, the most dramatic pain will be imposed on those who still depend on the state. Over 50% of Brown’s proposed spending reductions target health and human services. Children and the elderly, the sick and the poor will bear the major pain of these budget cuts.

Nor is Brown doing anything to challenge the basic inequities in the ways that government is funded or intervenes in the economy and society. Brown has proclaimed that his proposed budget provides a balance approach to revenue and spending. But we should be clear what that means. Brown is not proposing any new revenue sources. His revenue solutions are to continue already existing but temporary taxes. (4) There is no discussion of an oil extraction tax, or any attempt to take back some of the recent giveaways to corporations. Indeed, he is allowing the Republicans to cast an extension of already existing taxes as a tax increase.

There is no discussion of making the tax system itself fairer. One often forgotten reality is that in California, despite the formal progressivity of the income tax, poorer Californians pay a larger percentage of their income than do the wealthy. (CBP,33)  Brown is not trying to change that inequity or to push corporations to pay more. His strategy on taxes appears to be to hold the revenue streams constant until a more sustained economic recovery occurs. Of course that presumes that it will.

There are numerous political, economic, and social reasons to be skeptical of Brown’s budget strategies. And I hope to address some of these in a forthcoming post.

But a second important theme emerged from the hearings and press conference. Both Reed and Yudof made clear that their approach to this year’s cuts was different than the one they imposed two summers ago. First, assuming that Brown’s tax extension passes in June, they indicated that they would not ask for tuition raises at this point. Second, they made clear that they did not see the cuts being implemented at the system-wide system. Whereas the crisis of 2009 was largely handled through furloughs, fee increases, and pressures on union negotiations, Reed and Yudof insisted that now the cuts would be determined and implemented at the level of the campuses. At UC this process will overlap with an ongoing debate within the Senate and administrations about a reformulated system for the distribution of revenues to the campuses.

Exactly how this process will take place is extremely unclear. Although both administrators assured the legislature that there will be an open discussion and decision-making process, the calendar is very compressed. Yudof has asked each campus for a plan by the end of February so that he can present his plan to the March Regents meeting. Reed seemed to be moving along a similar schedule (with campus admission numbers promised almost immediately). Both made clear that programs and services were potentially on the cutting block.

While it may seem quixotic these plans mean that faculty and staff need to be vigilant and active in responding to proposals on their campuses. Staff members, as always, are most vulnerable to ill-thought out strategies. UC Berkeley’s administration will whine that it is being asked to take a proportional cut along with the other campuses but wastes millions paying Bain to accomplish little but staff demoralization and an apparent lessening of effectiveness. But hopefully, staff unions and organizations will push to get a greater say in how changes are implemented. The CSU faculty also has a system-wide union (the California Faculty Association) which is pushing to have a say in the way that cuts on their campuses will be approached. I hope that CSU faculty and staff will keep us apprised of their efforts and let us know if we can be of any help.

The UC Faculty is in a different situation. Despite the rhetoric of shared governance our actual leverage over these matters has been quite limited. Although the system-wide Senate effectively improved the pension “reforms” traditionally it has been too far removed from local faculty. Faculty themselves are split by discipline, interest, generation, and campus. We lack a system-wide voice that is meaningfully independent from UCOP.

In the immediate moment faculty who are part of the Senate need to be sure to push for greater openness and input in the process; those who are not in the Senate (or other college and university committees) need to push those who are. After all, the responses to the cuts are going to be taking place in evaluating programs and departments—faculties, like staff, have deep interests in these. And in so far as instructional decisions are involved faculty have a claim to authority over them.

In the longer term we need to seek to invigorate those levers that we have and to create new ones where necessary. At the very least I think that people need to become more active within the Senate as a way of achieving greater transparency and pushing both Senate leaders and the administration to open up decision making.

But we also need a larger discussion. We have had a great many concrete suggestions for responding to the budget problems and debates over tactics in the here and now. We have had less discussion about building or engaging with institutions. Such an effort would entail some shift of attention from departments to campuses and the university as a whole. But given the long-term pressures it is necessary. Do we think that the Senate can be transformed sufficiently? Can we, in fact, get greater involvement in, and mobilization of the Senate? Is there some way to better link committed faculty across campuses? Campaigns? Unions? Faculty Associations?

To be sure, these decisions must take into the wider context of the state and national budgets. But the process within the university has started. We can wait no longer.


Toby Higbie said...

Thanks for this post, Michael. Your suggestion of coordination between faculty who are already on Senate committees makes good sense as a starter. But how exactly does one push for greater transparency? If it's obvious, forgive me. But perhaps you could lay out the "Top 5" transparency goals and how Senate faculty can contribute concretely?

Michael Meranze said...

Toby, I don't think I can give you 5 goals because these things will vary depending on campuses. The point is that campus administrations are being asked to draw up plans right now to meet the proposed cuts. What is on the table? What is off? Why? Who is going to decide? If there is a shifting or shrinking of programs the faculty must have a role? At what level are decisions of effectiveness being made? etc. One of the things that has seemed clear in the Bain process is that despite the fact that the logic of reorganization means that these decisions should be made from the local units up that is not the way things are being done. Faculty in the Senate (and without) have the obligation to insist that the cuts (because there are going to be some) minimize the effects on the heart of the university--the instructional programs. Different Senate committees have different charges and can ask for different information and consultation. They need to be active in doing so.

AndrewD said...

Transparency implies different things to different people. An extremely formulaic approach to budget (cut) distribution is "transparent": until one asks why that particular formula was chosen.

I believe that fiscal transparency (from the point of view of the University's faculty) should provide information about the ways in which money is being spent in a format that can provoke meaningful questions about the decisions underlying such expenditures. A difficulty that we are grappling with in a task force I am involved with is how to aggregate such information at a level that is helpful. Too much detail confuses, too little conceals.

One outcome of our deliberations, I suspect, will be to make clear that many choices over the past 10 years have aimed to "minimize the effects on the heart of the university -- the instructional programs", and that this has had consequences for other parts of the University, for example building maintenance and libraries, that are becoming problematic.

Solving these problems coherently (rather than simply hoping for a better tomorrow with more state support) will (as Michael noted in his post) require the efforts of all of us.

Gerry Barnett said...

Fascinating that Yudof is ready to accept that UC is losing money on extramural research contracts, yet it appears no-one in UC admin is focused on addressing *this* element. Here, there can be transparency without formulas. First, why is UC not collecting its full indirect costs? Second, with regard to federal grants, where the administration portion is capped at 26%, why is there no move to bring the administrative costs down immediately--cut *those* administrative salaries, cut needless pseudo-compliance programs and positions, and the like? Third, if the UC is losing money on extramural research, against the express requirements of its own research policy, why isn't there a move to limit such research until the shortfalls are addressed? Certainly put an immediate ban all extramural research without full F&A. And certainly raise the F&A for all non-federal research immediately.

Someone explain to me how the shortfall in state funding isn't showing that the fundamental underlying canker in this whole mess is the long-term, consistently incompetent, policy-violating, unreported administrative cost of extramural research expenses outside the direct budgetary control of PIs.

Toby Higbie said...

So based on these comments here are 3 key transparency goals:

1) Exposing the un-recovered costs of externally funded research (and then halting that spending).

2) Making budget information available in a format that non-expert faculty can understand and act upon.

3) Making visible the chain of budget decisions that come from the top down.

I also agree with AndrewD that cuts to libraries and classroom buildings are undermining the core educational mission.

Bronwen Rowlands said...

Here is poet Wendell Berry speaking about denial, as he camps out outside the governor’s office in Frankfort, Ky., protesting the end-of-the-world scenario that is mining in his state. This passage reminds me of the response of many people in the UC community to the corporate coup d'etat that is slowly destroying UC.

“People don’t want to experience the discomfort of finding something untrue or wrong that they have always assumed to be true or right. There are economic arrangements that enforce that; for instance the bookkeeping in the current economy is very short-term. The people who run corporations are not under obligation to look far into the future, even necessarily at the interests of the very corporations they are working for. What they are working for is as large a dividend as possible in this accounting period to their shareholders. We are living in an economy and a climate in which short-term thinking is not only encouraged but in some ways enforced. There is even a kind of moral mechanism. The people who are in charge of these destructive corporations account to themselves not in terms of the effects on the world, but account for themselves in terms of their obligations to shareholders, which is an entirely different thing."

This is not a swing of some pendulum we're experiencing here at UC; it's the final swing from which we don't recover. Unless we're willing to fight back.

I appreciate the way Michael
Meranze keeps the UC staff viewpoint in the conversation. And I also agree with the urgency he expresses at the end of the piece:
"...the process within the university has started. We can wait no longer."

cloudminder said...

Please also see my recent post:
within the quick overview of the CPRA compliance audit findings-where UC received an F grade- CalAware says:
"What can students, faculty members and others do to encourage and/or enforce greater compliance with public records law?
First, test the current level of compliance by doing a CalAware-type audit of their own school, asking either for the same kinds of records—but concerning officials other than the chief executive officers—or for other records of particular interest, such as no-bid contracts, or both."
CSUs did far, far better than UC! Please share the reports with others.

cloudminder said...

also take a look at this:
Time for the CSU's Top Brass to Look in the Mirror
California Faculty Association launched a CSU Waste Whistleblower web page

Bronwen Rowlands said...

Hilarious! UC Berkeley's downsize machine ("Operational Excellence")pretends to have principles! And what a document it is: http://tinyurl.com/4ofo9sg.

The UCB Council of Deans OK'd this? Oh boy are they going to be embarrassed.

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