August 17th was new UC President Michael V. Drake's first day of work (red gown at left, at CSU Dominguez Hills).  He picked a hard time to start the job. But the Board of Regents has made it harder by pushing the president and the faculty out of the search for the campus chancellors.  The Board did this to the University's first Black president in the name of diversity.

Lack of diversity was the lead reason the Board of Regents (BoR) gave for rushing through changes in the selection process.  Both staff and faculty (especially tenure-track faculty) do need to be more diverse at UC.  But the Regent-commissioned report didn't  analyze applicant pools and hires to show racial disparity or anything else.  They would have had to offer evidence of systemic bias, since, in terms of outcomes, President Janet Napolitano (2013-2020) has a reasonably good diversity record with her 6 chancellor hires.  She brought on board two white men, Sam Hawgood (San Francisco, 2014) and Howard Gillman (Irvine, 2014), both promoted from within the campus, an African American man, Gary S. May (Davis, 2017), two white women, Carol Christ (Berkeley, 2017, from the campus) and Cynthia K. Larive (Santa Cruz, 2019), and a Latino man, Juan Sánchez Muñoz (Merced, 2020).  The 3 external hires were a Black man, a white woman, and a Latino.  First glance suggests that the easiest way to cut the white majority is not to hire from within.  

The Regents proposed a much more dramatic solution: a set of new search rules that overshadowed all other issues at their July meeting, including Covid infections and costs and the possible 12-16% revenue losses in 2020-21 that I discussed last time.  A review of the case suggests that a lack of chancellor diversity was not the main motivation.

In November 2019, Board Chair John Pérez convened a Regents Working Group on Chancellor Search and Selection. It produced the report, which does note the opportunity to "underscore how UC can better integrate diversity, equity, and inclusion practices into its chancellor search and selection process." But first came this:

While over the years, the Regents have delegated authority for many of the operations of the University to the President, appointing chancellors remains one of the most important responsibilities, which the Board has reserved unto itself.1 This reservation of authority requires particular attention and dedication by Regents with respect to the appointment of chancellors— the specific process which is set forth in Regents Policy 7102. (1)

Footnote 1 cites Bylaws 22.2 and 31.  Bylaw 22.2 sets out specific reservations of regental authority, and is a series of unilateral approval rights.  Bylaw 31 states that chancellors "are appointed by and serve at the pleasure of the Board," with the president advising and consulting on appointments without appointment power.  It also defines the chancellor as a direct subordinate of the Board as well as the president--as someone who can be line-managed by the Board. 

The Board's main motivation for the review appears to have been to increase its direct power over appointing chancellors.  The two discussions of the items were fraught, with both the Senate and the current UC President objecting to the changes and asking for further discussion. In the end the changes sailed through. 

First, the changes. The Board's Governance Committee Agenda for July 29th had three items on this matter, in which the acceptance of the Working Group Report would lead to immediate changes in the search policy, Regents' Policy 7102.  You can see the modifications here.   The new and approved clean copy is here.   The key changes are: 

1. Though the Board of Regents always appointed chancellors, candidates were identified and a finalist proposed to the Board by a "Committee." Now, this body is a "search advisory committee," with its powers identified as advisory only.
2. The president was the lead on running the search.  Now, "the Board and the President each has a role"--they are co-managers of the search process.
3. The five faculty members of the Committee were appointed by the Academic Senate.  Other groups selected and sent their representatives. Now, the chair(s) of the search advisory committee will select members from a slate of three for each position.
4. The Committee membership was constituted by the process of submitting names, not subject to further adjudication (I assume).  Now, the president meets only with the regental members prior to retaining a search firm or any committee meeting to insure a "strong balance" on the committee.
5. The five faculty members of the Committee were responsible for reviewing candidates and submitting names to the full committee, "working with the president."  Now, this reviewing is done by an outside search firm.
6. The Committee deliberated the virtues of the long and short lists submitted by the faculty reviewers.  Now, the lists prepared by the outside search firm are discussed by the president and the regental members of the committee.
7. The Committee came to a conclusion about the final candidate(s) together, through some (unspecified )process; the president would then communicate the nomination to the Board of Regents for approval. Now, only the regental members of the search advisory committee will vote amongst themselves on the name to be forwarded to the full Board of Regents.

In short, the chancellor search will be run by an outside search firm hired by the Regents and the Regent members of the search advisory committee. Only Regents will vote on the committee, and the result will be handed from the Regent members to the full Board. The president has been removed as lead authority in the search, and the faculty have been removed from the review process.  Faculty can submit nominations to the committee, just like anyone else.

Ironically, the actual search issue this year was not faculty having too much influence over administrative hires but having no influence at all.  During the search for the new president that led to Michael Drake-- the Regents completely excluded the faculty advisory body from contact with the applications or any of the candidates. The Senate Chair has in the past functioned as a member of the Special Committee; after an initial meeting, she was never allowed back. The Academic Assembly formally protested in a February Resolution, when the problem could have been fixed.  The Academic Council also protested in a July letter dated the day before the discussion of the chancellor search items. It objected to the refusal of the Regents even to acknowledge receipt of formal requests to be consulted. The new chancellor's search process will make them more like presidential searches, which in the current case meant the near-total bypassing of the faculty. 

The Senate response to the Working Group's search changes was strongly negative.  Before the letter I just mentioned, on July 23rd, the Academic Council wrote to the president to say that the "lack of inclusion" of faculty from the Report's interviews had skewed the results, and that it offered no justification for marginalizing faculty expertise about and personal commitment to their campus. It also stated that research university faculty members have special knowledge of what it takes to run a research university and asked that the new rules be delayed for further consultation, including consultation with President Drake.

The next Senate response was the bombshell, a letter signed by 20 former chairs of the Academic Senate, including virtually every head of the Senate for the past quarter century.  Though I've often wished for it, especially for demanding the Regents improve their generally poor job of maintaining UC revenues, I've never seen this kind of united Senate front before. The chairs' letter rejected the implication that "the UC faculty have been an impediment to the diversification of the University," pointedly contrasting the Senate's longstanding defense of affirmative action with the BoR's overturning of it in 1995, from which Underrepresented Minority (URM) student representation has never fully recovered. The letter defined the process of the recommendations as "not in keeping with the best practices of our University" in having excluded faculty from the Working Group and the Senate from meaningful prior review.  In addition, the former Senate chairs criticized the demotion of the president in the chancellor's search.

[T]he proposed Section 6 of the policy . . . would require the President to meet privately with only the regental members of the search committee, and then seek their approval of the President's choice prior to submission for approval by the full board.  The effect of this change is to fundamentally undercut the authority of the President in selecting Chancellors.

This critique of the Regents on both process and substance was the basis of a Los Angeles Times article by Teresa Watanabe. Many Regents, including the Board chair, first read about the 20 Chairs' retort in the newspaper, and they were riled before the discussion began.

There were two discussions of the search process changes during the meetings , first on July 29th (here) and then July 30th (starting at 2'09" here). The Working Group report was defended by Regent Lark Park, the WG chair, and by several of its other members.  I watched both discussions on line, and didn't hear anyone identify a clear operational problem to which the changes were a solution.  Park said the point was to be "more efficient, accountable, and inclusive" (2'04").  No one objected to this goal,  but there were questions about how these changes accomplish that? A few Regents expressed frustration with getting only one finalist  at the end of the search on which they were asked to do an up-or-down vote. But there were other, simpler ways to address this understandable concern. For example, the Committee could meet with the BoR while the process is ongoing, or the President could write reports to the Board chair every 2 weeks, or the Committee could submit a short list of 3 final candidates to the full Board instead of just one (as will now be done for Committee selection). None of these would require pushing the faculty or the President out of the process, as these changes do.  

The outgoing President didn't support the changes. Janet Napolitano noted there's "the question of what the problem is that we're trying to fix here" (2'41").  She said the Working Group could try to reduce their differences with the faculty and also said that "it would be useful to consult with President Drake." She noted that while most of the changes are "not necessarily objectionable," that one is a change to the president's power and the other is change to the faculty power. She said to the Board that her preference was that they "receive the report" at that meeting and engage in "greater consultation" with the faculty. They should "then consult with President Drake. I think that would be very respectful of him "(2'43"). 

Here the President offered the Regents accurate definitions of both respect -- consultation and discussion prior to a decision--and of shared governance, in which the process treats the views of all parties subject to equal treatment.  The sharing of governance requires what we can call epistemic parity, in which one set of views cannot simply negate the other, but must seek some kind of mutual understanding if not reconciliation.  In the previous process for selecting a UC campus chancellor, the sharing took place during the review and consultation process, after which the BoR hd full decision rights.

The expression of regental views went on for quite a while. A handful of Regents, including immediate past chair George Kieffer, acknowledged the deep dissastisfaction of the faculty and the clear non-support of the president, and said these were reasons enough to delay the vote until further consultation had amended views (3'08").  They were in effect speaking for shared governance's underlying principle of treating the epistemic positions of each party as valid, requiring further efforts at accommodation.

A bit later Board Chair Pérez asked Regent Park a narrower question-- whether she had in fact not shown the document to the Senate leadership in time for the Senate to deliberate and opine. She said there had been a meeting with the chair and vice-chair, and they had noted they needed to consult with the Council, which then produced the negative letter linked above.  Park then responded to the general concerns (starting 3'23").

I will just go back to this Chancellor appointment being the purview, responsibility, and duty of the Board members and the Board members alone in ultimate approval, and that is why Regent search committee members are treated differently in the proposed amendments to Policy 7102.  With regard to . . . the letter signed by many academic chairs. I was at some level astonished to receive that letter. I felt that the letter was not respectful, or did not acknowledge the purview of the Board, and the many Bylaws and Standing Orders that currently exist that show exactly who reports to whom, what has been delegated to whom, and what responsibility lies where.  22.1, 22.2, 30, 31 of the Bylaws all speak to this. Standing Orders 100.1, 100.4 clearly lay out the responsibility. . .  This idea that the Board does not have this prerogative is frankly surprising in terms of coming from past members of academic leadership in that acknowledgement, and seemed to suggest that the Chancellors function more as political appointees of the President, and again that if they're not picked by a president they cannot be loyal.  I find that not credible, and contrary to all the policies and bylaws that I have seen. Not to mention that upon that logic, none of these chancellors today could be loyal or follow the direction of our new President because he did not have a hand in picking them. So that to me is a fear that can be quickly dispelled by taking a more vigorous look at the existing Bylaws and Standing Orders. 

I really welcome the wisdom of our new president in a great many things. But I will take today as a case in point for not delaying further action. 

Park said that we've had a lot of discussions already and that to say "we should spend a great deal more time on these recommendations " would suggest that the Board cannot do  time and process management, and "then as a Board we cannot govern if we literally tie ourselves up in endless discussion." She was totally opposed to further consultation. She added, 

This is not an attack on shared governance. Truly it is not.  Faculty are the lifeblood of the university. That will not change with these recommendations. . . . And I would really love to see 24 [sic] academic senate leaders come together to opine on things that are deeply concerning and weighty to the institution--rather than whether shared governance has been quite respected enough in these modest recommendations.

There are several issues here. First, Regent Park missed the point of the Past Chairs letter.  It did not challenge the Board of Regents' appointment authority, but disputed the plan to end the shared procedures that had traditionally led up to the exercise of that authority.  

Second, Park read disagreement as an attack on regental authority. 

Third, her response to that perceived attack was to reassert that regental authority-- as unilateral. 

Fourth, she told President Drake that approving her recommendations was more important than getting his "wisdom."

Fifth, she denied Academic Senate's clam that this was an attack on shared governance by asserting that it wasn't. 

The full Board did indeed respond to Park's call to power.  Few explicitly echoed Park's claim that the point of the changes was to give the Regents full unilateral control.  Many instead told the faculty that they didn't want what they said they wanted, or that not having it didn't matter like they thought.  Regent Leib specialized in this Orwellian discourse, telling faculty that the Report was a "gift" to them because it meant they wouldn't have to do so much work. The discussion was often patronizing and dismissive, and oblivious to common sense basics of sharing and collaboration.  Regents like Lansing and Leib didn't want the faculty to feel bad, or think they were part of doing a bad thing to them. But they and nearly all of the rest of the BoR voted not to wait to give either the faculty or President Drake reason not to feel bad.  

Obviously nobody is going to die from all this, but the Regents' report, discussion, and vote were a textbook case of epistemic injustice, resting on the five features above.  This happens when the more powerful side tells the other that their concerns are wrong, that they need not be considered further, and that they comprise an attack on legitimate authority. 

Let me finish by widening the picture a bit.  Faculty, staff, and most campus administrators have no power over major University decisions of top management appointments, budget policy, layoffs and furloughs, system health and safety regulations, and the like.  But they do have clear jobs to do on their campuses. The function of governing boards is not so clear. What, today, is their value-added to the overall institution?  

University governing boards were justified in earlier centuries as a kind of natural aristocracy: the better people had a monopoly on wisdom, and board membership were drawn exclusively from them.  Few now espouse this kind of social Darwinist view of concentrated intelligence.  In addition, today's universities are enormously complex. The needed intelligence is widely distributed.  Experiences and needs are quite diverse. Front-line contact is more valuable than ever. The intelligence that solves problems must be integrated from a range of quarters. In this context, boards of trustees or regents are archaic forms.  The unilateral authority affirmed by Regent Park is this form at its most archaic point. 

Board members almost always lack university expertise, so that members of the campus community cannot be heard to say to each other, "How can we keep UCPath from ruining our lives? Regent N might be able to help us."  Or, "How do we reduce houselessness among formerly incarcerated students? Let's call Regent Q: she knows a ton about this, and would be glad to listen."  I have never heard a comment like this. Campuses and their many units feel entirely on their own;  the BoR is treated as a ruler, distant and adversarial, to be managed and dodged but not consulted for special insight.  The stereotype is that they are most concerned with (1) implementing the views of external powers in business and politics; and (2) exercising their own rights and powers.  

Unfortunately, Regent Park fulfilled this stereotype.  The Board, faced with a choice between power and consultation, sided with power.  Personally, I would love to bring to bear the achievements and capabilities of Regents in their own domains. I would love to see them exercise their sophistication and influence to protect the university from political interference and financial damage. Such Regents would be outward facing. Their internal gaze would focus mostly on managerial competence--on helping the senior managers serve the increasingly beset employees of the institution.  In the three domains of politics, management, and finance, such Regents would be especially focused on the third. They would insure financial vitality--they would protect and increase core revenues as necessary. 

Good trustees--like good professors, physicians, presidents, landscapers, cooks, civil engineers, parents-- don't push their authority beyond the limits of their competence. Power beyond knowledge is the great American temptation: U.S. organizations are top-down and prone to chains of command. University governing boards are generally granted quasi-monarchial sovereignty, as is UC's. The structure is inherently and deliberately anti-democratic. It is not justifiable on grounds of standard political theory. Elizabeth Anderson's book Private Government is a good analysis of the anomaly of governing authorities that have "arbitrary and unaccountable power over workers" in a putatively democratic society. Still, though lacking in political justification, unilateral power might have operational claims: Power can be earned by operational effectiveness.  But, as we have been forced to note repeatedly on this blog, the operational achievements of the UC Regents are rather modest.  Instead of addressing this problem by, for example, spending all of one day on the buried budget crisis, the Regents made themselves less accountable to faculty and to the president--the clear purpose of Regent Park's Working Group.  

As the Regents succeed at greater power and distance, epistemological bubbles will form around them, and consultants--who report to them and are unlikely to challenge them--will replace people in touch with real conditions on the ground. UC's split between Oakland's Office of the President and the campuses will continue to make this worse with a structural gulf that can be crossed only with consistent and accurate communication, and that has been undermined here by the regents own action. To be accurate, this communication must be between parties with relatively equal standing.  Exchange between superior and inferior is distorted by the inferior's need for self-protection, and the superior's entitlement and self-overestimation. I can't go into this here.  To summarize in a formula, epistemic inequality insures error.  When the Board turned a collaborative committee into a two-tier set up with superdelegate privileges for its Regents, they insured the intellectual distortions that no one actually wants.

One final note: governing boards all over the country, like UCs, have gradually come to regard the faculty as a problem for university success.  There are many sources and causes for this, but the result is default prejudice against faculty as people who just defend their privileges rather than the interests of education or university.  I must call this managerial bigotry against professionals. It is categorical, uninformed, and wrong.  UC will never move forward until its Board, including its Jerry Brown Bloc, and its allies can work through their anti-faculty prejudice and make use of their deep expertise, always freely given.  For example, each of UC's 10 campuses has some of the world's most respected scholars of race and ethnicity, who would bend over backwards to help increase educational justice and diversity.  

The saddest moments in the regental discussion on July 30th were when outgoing president Napolitano asked the Board, at least twice, not to decide the new president's role in chancellor searches before President Drake arrived. It would have meant waiting 3 weeks.  The Regents couldn't wait, and so the outcome of her last meeting as president was the triumphant affirmation of Bylaws 22.1, 22.2, 30, 31, and Standing Orders 100.1 and 100.4.

I wish President Drake the very best in his new role. I'm very sorry the Regents cut his power over  chancellor's searches.

Photo Credit: Los Angeles Sentinel (Michael Drake at the investiture of  CSU Dominguez Hills President Thomas A Parham)

That may be my worst title ever but it's an important point.  So here we go. 

Where are university budgets near the end of our bad policy summer?  In a bad place -- a worse place than seemed likely during the weeks of activist government from mid-March to mid-May. In this post, I'll discuss the national issue, describe a flawed university budget discourse that makes universities more vulnerable, and link this to the failure of today's mainstream Democrats to accept the economic role of government.

The federal CARES Act was signed on March 27th, and sent universities $14 billion of the $46.6 billion they'd requested (with half of that going directly to students). Having gotten 1/6th of their stated need, higher ed advocates placed their hopes in a follow-up HEROES Act passed the House on May 15th, which Mitch McConnell, Senate Majority Leader, sat on throughout the summer.  Thus the nation's schools and colleges planned for fall in a state of deep uncertainty and growing dread.

This past weekend, POTUS signed executive orders (mostly "memoranda") mandating supplemental unemployment benefits at $300 rather than CARES's $600 per week, with another $100 to come from the states. He extended student loan forbearance from September 30 to the end of the year.  Even if these orders go into effect, there are no provisions for supplemental funding for education at any level, including nothing for the K-12 systems that POTUS and his Department of Education secretary have been trying to bully into opening.  If the states are forced to pay part of the federal unemployment supplement, which some say they can't, that will mean even bigger state cuts to education.

The American Council on Education has a helpful summary of the current situation:

There are technically three bills under discussion in the COVID-19 emergency aid negotiations. The first bill is the HEROES Act written by House Democrats and approved by the full House two months ago. The second is the HEALS Act, which represents the ideas of Senate Republicans and the White House. Finally, the Coronavirus Childcare and Education Relief Act (CCCERA) is legislation introduced by Sens. Chuck Schumer (D-NY) and Patty Murray (D-WA) that reflects Senate Democrats' ideas about education spending in response to the pandemic. . . . The bills all include emergency aid for students and institutions, but the levels of funding proposed differ greatly. ACE has estimated that institutions have a total of $46.6 billion in increased student financial need and lost revenues, and will spend at least $73.8 billion on new expenditures to reopen in light of the COVID-19 pandemic. While CCCERA provides a total of $132 billion to meet these needs, the $37 billion provided for higher education in HEROES and the $29 billion provided in HEALS fall far short. 

The federal bill that comes closest to meeting actual higher ed need--at $132 billion--has no chance of passing McConnell's Senate.

Republican control of key governing bodies has artificially induced massive state failure in suppressing SARS-CoV-2.  The U.S. has the worst Covid-19 suppression record in the wealthy world, and, by failing to build public health infrastructure (see Jeneen Interlandi's superb overview), will continue to inflict massive suffering, disparately along lines of race and class, in all of the areas where common life should offer equal treatment, including education.  The failure of public infrastructure is damaging the private economy that Republican-driven premature opening was trying to protect. Republican opposition to a new stimulus increases the odds of a new depression (see Hiltzik and Krugman for summaries). 

Operating on this familiar political landscape, it's hard for people to maintain transformative ambition.  I sketched one version at the end of April ("Our Converging Crises III"), which involved massive public spending for full Covid-19 suppression, full employment, and educational experimentation. The American self-conception is of a nation that leads the world into a better future. The reality, given our decrepit social infrastructure, is a vast majority focused entirely on getting by. 

The Real Covid Budget Crisis

The same is true in higher education. There's been no follow-up on the early burst of federal effort,  and higher ed is engaged in a new round of austerity, translated as operations cuts, layoffs, and program downsizing. The Cal State system threw in the towel early, announcing on May 12th that it would be all-online.  This was at a time when most administrations assumed Covid-19 would be well in hand by fall; Cal State's Chancellor Timothy White could see pretty clearly that they didn't have the extra billion they needed for testing, tracing, isolating, cleaning, tent classrooms, and the rest. Since then, reopening plans have gone into full reverse, including at wealthy private institutions like Princeton and Johns Hopkins whose core value is small-scale face-to-face learning.  

University of California campuses are quietly joining Cal State's closures on a case-by-case basis.  Berkeley announced all-online on July 21st.  The other semester campus, UC Merced, will open August 26th with an unspecified ratio of remote and in-person. Among quarter campuses, which start a month later, UCLA has dropped its in-person proportion from the 15-20% announced in June to 8%.  UCSB hasn't officially updated its mid-June description of fall quarter as "some face-to-face," but is heading toward basically closed. UC Irvine is keeping its students in the "most classes will start remotely" twilight zone.  All sorts of intensive planning is going on behind the scenes.  And so are planning for budget cuts when UC needs that same extra billion that Cal State needed to open safely.

Although dominated by liberal Democrats, the California state legislature put stable CSU and UC funding in the hands of Mitch McConnell at at time when he was already holding it hostage.  In the final state budget, UC will get a 5% increase over 2019-20 if and only if California gets $14 billion in federal stimulus.  If there's no stimulus, UC gets what UCOP calls an 8% cut from 2019-20.  

In addition, the permanent state budget is cut either way: the federal stimulus money will be treated as a one-time backfill on the state cut.  Even that was a bizarre combination of "augmentations totaling $212.9 million and reductions totaling $471.6 million." Rather than offering higher ed affirmation and stability during the pandemic, the legislature provided a changing combination of cuts and increases that, without an unlikely Senate backfill, gives UC and CSU a major cut.

How big a cut, actually?  The legislature reduced the state allocation for UC from $3.938 billion in 2019-20 to $3.466 billion in 2020-21.   This is a year-on-year reduction of 12.2%.  Its a Covid cut of a size that a red-state legislature could brag about.

It's worth remembering all the way back to November 2019, when The Regents requested an increase of $422.1M in overall state funding, which would have brought state general funding to $4.360B (see the slide here minus $25M for the Riverside School of Medicine).  Annual base cost increases at UC are a bit more than 5%, and since that's 5% on less than half the revenues of the core budget, which comes mostly from (long-frozen) tuition, 5% state increases put core funding further behind.  Campuses have tirelessly tried all sorts of revenue workarounds, mostly involving overenrollment coupled with non-resident student growth, but it hasn't worked. (For the resulting long-term austerity, see "Three Essential Charts"). On top of its rather brutalist history, the California legislature now proposes to cut UC by $903.5M from its November request--barring a McConnell conversion like Saul's on the road to Damascus. The is a cut of 20.7% from the Regents's November request.  

Remember too that even had that $903.5 million November increase been enacted, many campuses were projecting deficits in 2020-21 or the following year. That was not a luxury budget. To repeat: because of prior cuts by Govs. Schwarzenegger and Brown, years of tuition freezes, and sub-inflation state growth, the non-miracle state budget cut that now looks likely is a 20.7% cut from pre-Covid's home for UC semi-solvency.

This would be a disaster for UC (and CSU). And it's likely enough to be treated explicitly in plans for both budgeting and the University's political engagements.

Budget Idealism at the UC Regents

This brings is to the July 30th UC Regents meeting. The Regents have absolute authority over budgeting, revenue strategies like borrowing, as well as political advocacy. If alerted to a budgetary emergency, the Regents might be expected to instruct UCOP to mount a massive siege of Sacramento and Washington D.C., pulling in their contacts in the tech community as well as in national politics.  But UCOP's budget presentation (see the July 30 afternoon session at the bottom of this page), rather than rallying the Regents, kept the real dangers behind the curtain. And Regental behavior encouraged this concealment. 

UCOP presented the budget as in basically good shape.  Medical losses for March-June 2020 are $1.7 billon rather than the earlier projection of $2.8 billion.  UC Health VP Carrie Byington had already suggested that the med centers have learned so much about Covid treatment that they won't repeat spring's revenue losses during the current and future infection spikes. 

Undergrad enrollments are "looking very strong," in the words of associate budget VP David Alcocer (11'47"). He said the same was true of international enrollments, in spite of a very turbulent policy picture on top of Covid travel problems.  He basically claimed that enrollment targets would be hit no matter what. I'm also a bit of an optimist on enrollments because I'm a pessimist on the economy: even remote-college looks good compared to a nonexistent job market.  Polling data suggest we're both wrong, and that colleges should expect a growing enrollment melt.

The presentation noted that housing and dining revenues will be down, but UCOP did not quantify or tie these to different durations of Covid-related reductions. A bit later, UCLA chancellor Block offered some campus numbers, and in later questions a couple of Regents clarified that only single rooms will be offered in the fall, though without revenue numbers for system losses. New VP for Research and Innovation, Teresa Maldonado, gave a candid appraisal of major disruption to research, UC's distinguishing educational activity. She was particularly direct on the damage to women and early-career researchers. But this remained a matter of delayed research progress more than a fiscal crisis.

The presentation of the state budget was a delicate matter (starting around 7'40"; I'm not following UCOP slide order). Alcocer explained the numbers in the slide below (they are different from my calculations above). He noted that the final July budget has a better upside than the May Revise and a smaller potential downside. 

He then went on to explain his right-hand column. He noted that "there's a lot of uncertainty here" because the range of outcomes is nearly half a billion dollars, or 5% of the core budget (9'20").  I can attest that the uncertainty has created in campus planning a somewhat toxic mixture of paralysis, wishful thinking, gloom, and fatalism about cuts. Uncertainty is actually encouraging austerity by making the early stages seem very mild.  

But Alcocer's statement about uncertainty incurred an interruption from Chair John Pérez, who said, 

I just want to push back on the way we characterize this uncertainty. And here's why. The way this reads to me, in simple terms, is "uncertainty is bad, and smaller uncertainty is better than greater uncertainty." When in fact the final budget, in both the worst-case scenario and the best-case scenario, are better for the University, than the May Revise. . .  "Uncertainty" is inherently a bad term, so if we want to look at "range"--some other way to characterize it--because we don't want a negative connotation to the spread we see in the final budget, when in fact it serves us better than the May Revise does."

This intervention forced Alcocer to repeat what he had said two minutes before, which was that the upside was better in July than in May. It suggested to me that Pérez has no idea how uncertainty is weakening the campuses. It also suggested that he would not tolerate university officials criticizing the state legislature in even a polite and indirect way. Any campaign to get a reliably flat budget from the state (not conditioned on McConnell's conversion to St. Mitch), or an increased budget that could cover Covid costs, would never get off the drawing board under Pérez.

The misty aura of fiscal stability was punctured only by Berkeley chancellor Carol Christ, who projected a $340M deficit through fiscal 2021 (or more than ten percent of the campus's $3 billion or so in annual revenues).  She read a version of her administration's July 15th statement, and stressed the dependence of the campus on tuition and state revenues. She stated that the latter were $100M below their 2008 level even though the campus enrolls 8200 more students today.  

If the Regents had paused to take that in, they'd get a glimpse of the system's deep structural woes. Berkeley is historically wealthier per student than any campus except UCLA, so a responsible Board might wonder what its woes say about the rest of the system.  This was the only time in living memory that a Berkeley chancellor has said point blank that privatization doesn't work and thus we need good state support. Actually Christ didn't say that, but she came closer than ever before to noting that the problem isn't just Covid but a flawed business model in which the University has let state funding massively decline.

Later, as Alcocer was about to move to UCLA chancellor Block for a campus view of losses in auxiliaries, Board chair Pérez interrupted to complain about how long the budget presentations were taking.  "This was identified as a thirty minute discussion. . . . when an item is 30 minutes, the presentation is no more than half of that. We've now exceeded 35 minutes, before we've gotten a single Regent engaged in discussion." (32'30"). The obvious remedy would be to allocate more than a half-hour to analyzing what may be most important fiscal crisis in the University's history.  The time overrun was entirely due to letting three chancellors say a few words about their campus finances outside of the UCOP PowerPoint story.  Things got even more rushed after that--and even more superficial.  

In questions, terribly delayed to minute 38, Regent Makarichian performed his solo role of asking for budget numbers, and guessed at overall losses by adding some numbers in his head.  Pérez instructed CFO Brostrom to have those figures in the September meeting. I know Brostrom had versions he could have produced then, but who would dare try the Pérezian patience by pulling up another slide?  

In the meantime, UC is covering its losses with borrowing. It floated a bond for $2.8 billion in July, with $1.5 billion in "working capital" and the rest for capital projects. (UC debt has doubled in a decade from around $10 billion in 2009-10  to $24.6 billion in 2018-19). The budget discussion ended with a hopeful wait-and-see good-case scenario which, as I've said, is translated on the campuses as cuts.  

A Plausible Scenario for 2020-21

The Office of the President and the campuses are all doing projections, so I'm going to adjust some internal UC numbers to draft a plausible negative scenario.  This is not a good case, but it's not a worst-case: for example, I optimistically assume that students who can enroll do enroll, and that all are willing to pay full tuition for mostly remote instruction.  The nicer scenarios assume a return to mostly-normal after the fall term. Based on our country's failed-state approach to Covid suppression, I assume that full fall impacts last through the end of Spring 2021.  I use the governor's January budget as a base for state funding, which was $220M less than the Regents' November budget.

The assumptions:

• Tuition: full undergraduate enrollment.  Though 75% of admitted international students do not enroll, many are replaced by domestic non-resident and resident students. Waitlists and "appeal" lists are liberally used, maintaining overall totals.
• Housing is converted to singles, and dining does not return to normal, costing campuses 70% of normal revenues.
• Grad student enrollment. This falls 15%, slowing research, but it has little impact on revenues as campuses simply eliminate sections as necessary in remote courses, while canceled grad seminars free up some faculty to teach more undergraduates.
• Research continues to be affected by outbreaks made worse by shortages of tracing and isolation programs.
• Philanthropy is reduced by renewed turbulence in the markets, as is UC investment income.
• Medical center and clinical revenues recover from spring 2020 levels but don't get back to normal.
• The Republicans block higher ed stimulus funding in the Senate. Although the Democrats win back the Senate in November, President Biden wishes to govern from the center, and decides not to antagonize the 48 remaining Republicans by giving too much help to education.  Like public universities everywhere,UC goes to its lower permanent state funding base.

Here's a rough estimate of what this would look like by standard budget category.

Scenario B Budget Category	Decline $Millions	Negative % Change
2020-21 Base	39,738
Student Tuition and Fees	775	14
Auxiliary Enterprises	1165	61
Research Contracts & Grants	779	12
Philanthropy & Investment Income	555	19
Medical Centers	2279	15
Educational Activities (esp Clinical Rev)	521	12
State General Fund Appropriation	481	12
Total Losses	6555	16.6
Projected 2020-21 UC Revenues	32,823

Scenario B is a decent guess at one possible program for 2020-21: 17% revenue declines for the UC system overall, and 12% or so for the educational core.  Cuts like these would cause major damage to teaching and research, and of course prevent meaningful Covid-19 suppression.  If two things happen, first, Covid illness persists for several years, as some medical officials predict, and second, U.S. politics allows economic decline, then UC, like other universities, will be permanently downgraded.

The Governance Problem

The Republicans are obviously the biggest problem, but so are Democrats and their governing boards.  The Republican donor base sees government as a potentially victorious competitor to business and finance in economic management (through equitable tax policy and regulation but also better social infrastructure and more productive investment).  Weak government has enabled today's "plutonomy." Republican politicians logically oppose programs that will make government useful, effective, and popular and thus empower their direct rival.

But Democrats are also a problem when they reject both strong and weak Keynesianism.  In the strong version, public agencies spend massively to reconstruct society on the principle of equal treatment. This would fund a Green New Deal in which, for example, some of our tens of millions of unemployed people would be paid by the government to insulate the country's housing stock, starting with those owned by low-income people. I pointed towards this kind of spending in an April post.  Let's call it democratic-socialist Keynesianism, Sanders and AOC-style.  

There's also weak Keynesianism, a very useful combination of FDR and LBJ, in which public agencies spend massive amounts to keep an unjust and unequal status quo economy from imploding.  That would include the common-sense goal of keeping the education sector from shedding employees into a non-functional economy by giving schools and colleges stable funding. It would include the UK policy--enacted by the Conservative government--of covering 80% of the salary of laid-off employees so they can be furloughed rather than fired.  

Mainstream Democrats don't exactly oppose this kind of thing. But they don't promote it as their bread and butter. They also don't clearly expose the urgent need for it, or encourage others to expose it. At times, liberal Democrats like John Pérez actively block the creation of a budgetary need for weak Keynesian spending by preventing the open declaration of a budgetary problem. 

The current UC Board of Regents is chaired by the former Democrat Speaker of the Assembly. It includes the Democrat Lt.Governor, the husband of California's senior U.S. senator, and several former or current members of two Democratic governors' immediate offices. It also boasts several wealthy and prominent Hollywood liberals.  There is really no reason for this group not to activate itself in centrist Keynesian fashion. They would then create an urgent obligation on the part of the state to sustain its educational workforce, infrastructure, and student population, whose lives are currently set to be permanently damaged by the Covid depression. 

I don't understand the complacency that demands the current UC budgetary vagueness in which nothing is true and everything is possible, until the only possibility becomes austerity. It feels like proleptic excuse making--"we didn't fail to act, because we didn't know." I don't understand the lack of ambition, even the bare ambition to keep the rising generation whole. We can obviously do that, but it will take much clearer budget work at the level of senior management and governing boards.  It will take boards willing to support unprecedented mobilizations of political will for higher education, or at least willing not to block them,