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Wednesday, March 16, 2011

Wednesday, March 16, 2011

An Odd Regental Duet this Morning

I came in late on the webcast of the UC Regents Committee on Finance meeting.  I missed the three chancellors presenting their campus pictures.  I'd wanted to hear this because their last presentation, at the infamous furlough meeting of July 2009 was a devastating picture of declining quality, and clearly came as new information to the Regents.  The first voice I heard today was Berkeley Chancellor Bob Birgeaneau saying a couple of interesting things:
  • the $1.4 billion cuts to California higher ed could still get worse. He has gone to Sacremento and can't find a single legislator that is willing to say that higher education is just too important and these cuts are unacceptable.
  • compared to his experience at MIT, the level of corporate support for UC is very dissappointing. Silicon Valley leaders complain to him that UC isn't producing enough graduates for them, so they keep on stealing each others' employees.  I said to them, Birgeneau continued, that we need better funding to produce them. Silicon Valley leaders just don't step up to support public universities.  A bit later, Birgeneau remarked, frankly, they owe us, because we educated the people that are making them, that are providing them with resources.
This might have been an opportunity for the Regents to focus on increasing support for restored public funding, which scholars of higher education myself included have shown repeatedly is the only source large enough to fund high-quality public education for all who can take advantage of it.  Birgeneau rightly focused on one of California's wealthiest business sectors that has been largely missing in action.  Before anything like this could get underway, Unconfirmed Regent David Crane launched into one of the most relentlessly negative assessments of state funding that I've ever heard in public.  Here is my inexact paraphrase of his comment:
I’m very familiar with the state budget. We ain’t seen nothing yet. You’re going to look back in 5 years and say these are the good old days. Even if we had legislators that like higher ed, and we don’t-- for some reason they are again raising spending on corrections . . . -- the state faces a  wave of expense that is inexorable: increasing health care costs, and increased spending on unfunded benefits, not because workers are earning excessive pensions but because politicians are not funding promises made.  I see a customer that is paying 13% of our revenues, and I see that customer going away entirely . .. We are a public university in name only. We must remain true to why we are all here - access and so on. And yet that customer is going away.
 Obviously Crane is right about sizable liabilities, but he completely ignored revenue solutions, and the rhetorical effect was to make any suggestion of restored state funding impossible, unrealistic, not tough minded, and simply not playing in the big leagues.  His  bombastic certainty has no doubt intimidated many an audience in the past.

There were two dissents.  One came from Superintendent of Schools Torkalson, an ex-officio Regent, who said (more approximate paraphrase)
we should maintain faith in the california voters and legislature.  We have to have a strong educational system – it’s embedded in our constitution as a top priority. Remember that I recently declared for K-12 a state of financial emergency. We had 38-40 students per class but the lights were still on. The public wasn’t aware of what was happening until we got out there on the road about the situation we’re in.  Also note that we’re collecting $5-8 B less per year in taxes than we did 10 years ago. California and its great wealth has more to give and more to invest. We have to talk bluntly about new revenues, taxes, whatever we want to call it. The immediate big dollars are to get the tax extension measure on the ballot. We all need to the members who are critical to get the 2/3 majority we need.  The $12b on the ballot is the big big picture and we need to focus on that.  We need to do that for all the students that are coming that deserve to have this great  education and we want them to have it. Should we declare a state of financial emergency for the University of California?  We’ll get the votes and then have the great California conversation: are we going to have great education or not?
The second dissent was Irvine Chancellor Drake reminding the Regents of the slide he described from A+ to A to A-, noting that maybe A- would sound pretty good to the legislature, and that it was the Regents' job to keep the legislature from accepting that decline.

But this was drowned out by a superogatory blast from Regent Chair Russ Gould, who seconded David Crane in saying that all the new dollars were going to go to things other than higher ed. Everybody loves higher ed, no one puts it first, so UC needs to build self-reliance, and that's the end of it.  His speech made it clear that, at least in Regents meetings that he chaired, the idea of increased public funding is dead.

The meeting then turned to a range of "balance sheet initiatives"  These are perfectly reasonable changes that, in the best case scenario, were said to be able to raise $62 million in near-term revenues plus, more ambiguously, $300 million for FY 2010-11 through debt restructuring and what will probably be a one-time purchase of very cheap municipal bonds that had just been dumped in a temporary panic in January.  The Regental praise for Peter Taylor and these strategies was extravagant, a genuine love fest. These ideas are terrific, Regent Gould exclaimed.  The pursuit of the "big picture" dollars in the public domain was forgotten in the enthusiasm for investor strategies that will yield far less than would a successful public strategy.


Anonymous said...

This is almost too depressing for words. I'm all for assessing the current climate and trying strategies that will have a better prospect of success, but at some point a public university is a public university--it is a public good, a public necessity, and, looking at the history of this country, equal access is a public right. Why don't we have regents who believe in our mission and who support that? Wait...I know the answer to why...it doesn't change the fact that we should have regents who support the fundamental institutional mission and role.

Bronwen Rowlands said...

"Three campus chancellors pleaded with regents for more autonomy, which they said would allow them to retain top professors who are being recruited aggressively by other universities."

This story of the pleading chancellors has beeen repeated already by several online news outlets. I think the Regents treated us to a little theatre today. A little theatre cooked up by the UC PR people, to distract the public from the real corporate powerplay behind the curtain. I scanned the transcript of the recent interview Yudof gave to student newspaper reporters and one of his spokespeople described this Regents meeting as a "workshop." A workshop that she, no doubt, had a hand in planning.

cloudminder said...

it was full-on Naomi Klein Shock Doctrine act I act II- tomorrow will be act III.

another interesting exchange with Ruiz(?) saying to Lentz 'I don't trust those figures- I don't believe that info Patrick, we need to be more thoughtful' - a regent says this to the chief financial officer! that was boldly honest (re: e.g. the whole 10,000 =hundred million dollars)

and Simmons did a fab job schooling them how silly their ratio looks when they talk about grad students

Norm Pattis says he wants salespeople to go "sell" the university to private industry.

These regents have no political savvy- they are saying some of the most incendiary things in the most incendiary way! They aren't even talking about other models in higher ed.

University of 2 and 20.

Other regents calling the legislature "public funder" then, in the next breath saying "customer is going away"

Crane asking questions about basic UC financial terminology- and Lazano saying "oy, we go through this every time- we need to have a new regent tutorial"-- a tutorial should occur before he hastily takes the regent title with no prep work -he likely has not read any current public reports like UCOF etc- yet he takes that title of regent prior to state senate hearings, mind you.

Yudof- "museum of priorities" was an interesting quote.

"Playing Cassandra to Birgeneau's Pollyanna"--another interesting quote..

anyway those are some initial impressions on what we are hearing.

cloudminder said...

one other thing:
earlier this week Blumenthal was on a little two minute comcast segment- (its public service announcement time they give) and the reporter asked Blumenthal about the figures for what UC contributes to the state- she challenged one figure- and then said "you believe that" and he said yes "i believe that to be true- I hope it is true"

we can't have Chancellors making the case for UC citing numbers and talking points from their development officer or UCOP and then saying "I hope it is true" when challenged.

cloudminder said...

also the regent chair of investment was pretty miffed that he did not recall his committee reviewing the balance sheet initiatives Brostrom and Taylor presented-- somehow it went straight to finance committee.

BS moves goin' on.

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