UC Irvine on April 13, 2018     

by Trevor Griffey, School of Humanities, UC Irvine

Last May, 2025, I had the radicalizing experience of successfully lobbying for three months as part of a labor union coalition to prevent $270 million in proposed cuts to the University of California (UC) general fund allocation from the State of California, then watching multiple UC campuses go forward with tens of millions of dollars of budget cuts anyway. 

It was a level of cynicism and exploitation that I frankly hadn’t expected from a public sector employer. For months, the UC office of the President (UCOP) mobilized students and Regents to personally lobby legislators to prevent budget cuts that would be “devastating” to students. Legislators, facing tough choices about how to close a multi-billion dollar budget deficit, heard our pleas and protected us while passing on cuts to other government programs instead. Then UCOP said nothing when campus Chancellors, citing structural deficits compounded by uncertainty in the Trump age, went ahead and and made some of the same cuts that legislators had explicitly given UC money to prevent.

UC Board of Regents, March 2017    

That is the question.

This is the answer: Never.  

Or not at least until the campuses fight and change current Office of the President (UCOP) budget ideology and practice. They have never done that.  Not yet.  

I’m going to compare UCOP’s January state budget show with their offstage borrowing.  State funding yields little, while the debt yields a lot.  

I’ll keep my eye on two major implications for the campuses. The first is a lock-in of structural deficits with continuing cuts to the educational core--to both teaching and research.  

UCLA Royce Hall on May 14, 2018   

By early spring of the annus horribilis 2025, the UCLA Senate had lost patience with a UCLA Administration that had locked it out of any meaningful role in major decisions.  

The new CFO, Stephen Agostini, appointed in 2024, wasn’t working with the Senate in established ways. A new chancellor, Julio Frenk, had arrived in January, was to be inaugurated on June 5^th, and seemed okay with increased opacity.  The Senate chair, Kathy Bawn, must have been worried that something much worse than shared governance could get locked in by the new administration. 

Train Entering Station NYC on Oct 30, 2022   

I mean the question literally.  The New School (TNS, by which I’ll mean all its colleges) has advantages most private colleges would die for. Why is it now trying to push out 40% of its faculty and most experienced staff, mainly on the academic, non-arts side? How did it develop a $48 million deficit for the current year, or around 10% of operating expenditures? President Joel Towers has announced these things but does not explain them.  His administration has  published a closure list with no academic reasoning about the choices.

 

I’ve read all the documents I can access. My sense is that senior managers have made important financial errors over a number of years, and yet the underlying problem is poor academic planning. 2025’s Summer Working Groups notwithstanding, senior management have not yet constructed a multi-year collaborative academic planning process involving all faculty and frontline staff. 

 

Selling The Catalyst, UCSB on April 12, 2014   

2025 saw a shift in the hard right’s measure for the success of its decades-long attacks on universities: it moved from discrediting to subjugating the university system. It used decades-old methods in which culture wars and budget wars work together. These were now yoked under Trump II with federal coercion campaigns that extorted changes in core institutional policy through the unlawful withholding of federal funds.

 

University boards and presidents have not formulated common aims much less a joint strategy to fight the most powerful attack in higher education’s modern history, one already more destructive than McCarthyism. They have followed the mantra of corporate America: shut up, suck up, and try not to stand up.  I’ve noted that all the fighting has come from faculty groups and some professional associations.

 

UC Berkeley on May 29, 2024   

Every meeting tells a story as Rod Stewart once sang, more or less.  What stories have UC’s Office of the President and Board of Regents been singing when they met every two months?  Side A in November was “protecting student affordability.”  Side B was their perennial favorite, “budget rules everything.” The bonus track, unadmitted, was “stagnation conquers all.”

 

Fiscal stagnation means permanent austerity and the damage past and future appeared in the unscripted parts of the story in the public comment periods.  There some speakers opposed the termination of the campus hiring program associated with the President’s Postdoctoral Fellowship Program (PPFP). This seems to have been prematurely announced / decreed by the systemwide Provost Katherine Newman to a group of Executive Vice Chancellors, who brought the decision as an accomplished fact back to their campuses, which ignited a protest campaign from faculty, staff, PPFP alumni, academic consortia and, apparently, an unusually large number of chairs, deans and other administrators. The upshot was a letter from UC President James Milliken stating that reports of the death of PPFP’s faculty hiring incentives were greatly exaggerated. This was a real success for the protests, however unacknowledged by the president.

 

UCI May 25, 2018   

We saw in Part 1 that UCI Finance attributes losses to the Schools –the academic core—rather than to the non-core or medical center activities associated with research and various auxiliary services.  We also noted that in FY23 UCI needed to find $132.3 million in institutional funds to cover research costs. One result is unfortunate: dramatic cuts are coming to the core. 

 

Non-core and UCI Health may be conducting layoffs as well, but I haven’t seen any indication of this. The UC rule of thumb has been cuts to the educational core come only as a last resort.  It’s often honored in the breach, and I don’t see that UCI is following it now. 

 

UCI’s core funding is governed by a new Budget Model and multi-year planning process. It was tried out in 2024 -25 (FY25) and has been modified for the upcoming year (2025-26 or FY 26). 

 

Serpentine, Hyde Park London May 18, 2025   

UC Irvine is facing major cuts to its academic core, bigger in some places than others.  UCI lecturer Trevor Griffey analyzed them as the state budget was passed by the legislature. This post started life as the introduction to my analysis, UCI Part 2, but it has taken on a life of its own. 

 

As I mentioned in Part 1, there’s a national pattern at work, which is to assume and accept an even worse austerity norm – hyponormalization—rather than taking Trump’s assault on the foundations of the knowledge system as an opportunity to confront and change the university’s contradictory political economy. 

 

The confrontation will mean critique of various theories of the costs of college instruction that shape the thinking that operates universities. These theories are mostly bad, yet they are always with us.

 

Australian National University    

by Prof. Kylie Message-Jones, The Australian National University

The Australian National University (ANU) has said it needs to reclaim a budget shortfall of $250m. To do its bit, the College of Arts and Social Sciences last week published a roadmap to meet the University’s goal for its areas. Its change proposal boils down to a list of cuts that will damage staff, students, as well as local families, communities and economies. 

 

It might help to put the ANU’s situation in context. Although ANU is a small institution by Australian standards, with roughly 4500 staff and 22,000 students, it has historically been high performing. In the recently released QS 2026 World University Rankings, ANU, a member of the prestigious Group of Eight network, slipped slightly to come in fourth out of 36 Australian universities and 32^nd globally.

 

Santa Barbara on December 24, 2023   

In the May Revision of his January budget proposal for 2025-26, California Governor Gavin Newsom cut his cut to the two state university systems. 

 CSU Chancellor Mildred García wrote, “The May Revision reduces proposed cuts to the CSU to 3% or $143.8 million of ongoing funding – down from the 7.9% or $375 million cut initially set forth in the governor’s January proposal.”  UC got the same percentage reduction of the January cut—from nearly 8%, announced a week or so before Trump took office, to 3% now.

 

García went on to note that the Compact continues to exist at the convenience of the Governor and thus isn’t really a “Compact” in the normal sense.  “It’s like the father who announces, ‘I have a compact with my children not to spank them—except when I really need to spank them.” Sorry, I misquote. García’s only comment was, “However, the 2025-26 CSU ongoing multi-year compact funding ($252 million) remains deferred until fiscal year 2026-27 to help address the state’s budget shortfall.”

 

García added, “I commend and appreciate Governor Newsom for taking a thoughtful and measured approach to addressing the state’s fiscal challenges, while recognizing the unique and invaluable role that higher education institutions, and the CSU in particular, play in driving California’s workforce and economy.”

 

Not to be outdone, University of California President Michael V. Drake wrote, 

We are deeply grateful to Gov. Newsom for recognizing the value of the University of California’s contributions to our state in the May Revise. This is a challenging budget year for California, and our state leaders are facing very tough choices. Even in this difficult moment, the Governor has reduced the University’s cut from 8 percent to 3 percent, demonstrating his strong commitment to California’s students. His proposed budget minimizes cuts to vital student support services and preserves critical investments like affordable student housing construction.

 

The top managers at CSU and UC regularly teach their students and the public that Newsom is a sturdy hero of higher education funding.  If you criticize Newsom’s budgets for your campus, you in effect criticize your president, chancellor, and university officials, even though they've already done the maximum.

 

UC’s Executive Vice President and Chief Financial Officer Nathan Brostrom presented the cut-of-the-cut budget to the Board of Regents on May 14th (Item F4; video is from Finance and Capital Strategies Committee starting at 14’30.”  Here’s the summary slide.

Figure 1

 

 

I recommend ignoring the rightward columns, in which we imagine that the state stops hurting UC and turns over a new leaf. This is still very bad news. The ongoing $129 million state cut is oblivious to the cuts tsunami coming from the federal government, in the ten dimensions I outlined in my last post (Liner Note 25).

 

In his Remaking post, “Manufactured Austerity,” Trevor Griffey laid out the history of the negotiations. He noted the injustice of the January plan: 

Budget cuts negotiated in 2024 seemed like a done deal. Then something unexpected happened: new, more optimistic revenue forecasts came in, and the state of California entered 2025 with a projected $363 million budget surplus.

 

The Governor could have proposed to use some of this money to give a reprieve to the UC and CSU systems, or try to sustain the compact another year. 

 

Instead, the Governor’s January budget proposal reduced planned cuts to state agencies, while leaving the 8 percent cut and compact deferral in place for UC and CSU. 

 

The May Revision is a partial correction of that extra cut meted out by the governor and legislature to UC and CSU. But it’s still a cut in the worst year in my lifetime for U.S. colleges and universities. 

 

Where did the Department of Finance and the California legislature get the idea that it would be OK to replace the Compact increase with a $129 million cut?  

 

At Cal Matters, Mikhail Zinshteyn has reported,

The chair of the Assembly’s budget subcommittee on education finance, David Alvarez, a Democrat from Chula Vista, asked UC senior officials how much the state could cut and still leave student academics largely unaffected, including graduation rates and other endeavors that “ensure that student access remains the same.”

 

For UC San Diego Chancellor Pradeep Khosla, the answer was about $30 million, much less than the roughly $73 million in state cuts the campus would absorb under the current plan.  Systemwide, the UC’s 10 campuses could tolerate an ongoing cut of $125 million, said Seija Virtanen, a UC government relations official.

 

Mystery solved. The new cut idea came from UC officials themselves. Khosla told the Assembly Budget Committee that UCSD was cool with a $30 million cut three weeks after he told his campus community that they face cuts of $75-$500 million. Virtanen said a $125 million cut would be tolerable. UC’s cut was $129 million.  

 

The official UC discussions take place in a short-termist bubble in which only the most recent increments are in public view. The repressed pattern is a quarter-century of cumulative shortfalls.  

 

I’ve updated the blog’s ongoing calculations for the UC budget (CSU isn’t here) to reflect the May Revision.  If you’d like more background or a refresher, see “The Essential Charts.”  For Newsom’s funding pattern see “Shortfall.”

 

Figure 2

 

Here you see several lines.

 

The red line tracks the state's actual general fund allocation in nominal dollars.

 

The blue line is a benchmark, tracking growth in state per-capita income.  This measures the strength of the economy as it exists in people's pockets.  It goes up 4-5 percent a year most of the time.  

 

UC enrollment did not stay flat through this period, but increased by about 50 percent. The yellow line takes the per-capita income benchmark (blue line) and corrects it for actual UC student growth. 

The purple line is the California state budget (right-hand scale).  State government--health, corrections, transportation, K-12 education, etc--has grown at around the same rate as personal income.  California doesn't have an exceptional government, measured by growth rates.  It has an average-growth government--except for higher education, which state government has made sub-par.

 

Note that none of this data is corrected for inflation.

 

If a state wanted to fund an agency in an average way, it could use several metrics.  It could increase that agency’s budget at the overall government median.  The red line would track the purple line. 

 

Or it could increase that agency's revenues at the same rate as per-capita income. The red line would track the blue line. (In such a case, the legislature wouldn’t be treating that agency as more special, but just letting UC or CSU or public health or transportation grow with the state.)

 

Or the state could also acknowledge the growth in that agency’s service obligations, like enrollment growth.  In this case, the red line would track the yellow line. 

 

You can see that none of these average treatments take place.  UC’s state general fund revenues have fallen steadily behind the state in all three measures. And UC officials seem not only to be okay with this, but to co-create the substandard increases over years.

 

I’ve never understood why they do this, or why UC people don’t try in an organized way to make them stop. But here we are.

 

The traditional excuse was that UC will made up for state cuts with increases in student tuition. This has always been unpopular with the California public, so the line was that UC is compensating for state cuts by triple-charging international students, and this it’s a win for the state taxpayer.  When the taxpayers’ 4.0 or 4.3 GPA kids were getting rejected in large numbers from the flagship campuses with the highest shares of international students, parents complained, and the state negotiated campus-by-campus caps. Resident tuition got frozen by Jerry Brown (thanks to student protests) in the early 2010s, and the “cohort” tuition replacement makes little revenue difference. 

 

Long story short, if you calculate net tuition income, taking out some big expenses no longer covered by the state, you get this chart.  The green line adds UC general funds and net tuition income to state general funds.

 

Figure 3

 

Any way you slice it, the University of California has been underfunded by the state throughout this century. 

 

After these many years of substandard funding, UC (and CSU) are now woefully exposed to the ax-murdering of federal agency grants. At CUCFA, Eric Hays has calculated (conservatively) a UC-wide loss of $421 million in federal research funds from just one of the ten types of cuts—NIH reductions in indirect cost recovery rates to 15%.  

 

Damage is settling in everywhere. The system has frozen hiring on all campuses, amid various campus measures.

 

I noted above that UC San Diego, Chancellor Pradeep K. Khosla warned of cuts on April 1^st.

We are unable to predict exactly what the losses will be, but our initial scenario planning models indicate possible reductions ranging from $75 million to more than $500 million annually. In preparation, I have asked budget offices to model a 2.5% to 12.5% budget reduction based on these initial scenarios. We will continue to evaluate the data and further refine the range of our estimates.

 

That was the last update on his page.

 

At UC Santa Barbara, the chancellor has asked units to prepare for across-the-board cuts of 10%.

 

UC Santa Cruz already had a $107-111 million structural deficit before Trump’s election, and faces cuts and layoffs.  Students are noticing educational effects.

 

UC Davis was already projecting a doubling of its core funds deficit to $90 million, and now expects further losses due to federal cuts of $118 to $408 million.  The chancellor's statement following the May Revision (h/t Mikhail Zinshteyn) declares a $53 million deficit on tuition and state funds, and a prospective $500 -$907 million deficit adding federal sources at the campus and medical center combined.

 

And so on. 

 

The financial information is woefully incomplete. It doesn’t tie specific levels of cuts to known policy variations.  There are no “bridge funding” policies of the kind I discussed in Liner Note 25. There are no elements of a coming plan. 

 

Researchers across the system engage in pure guesswork trying to figure out the near future of their research and of their students and staff. What kind support institutional support might they have? Nobody knows. 

 

This atmosphere may explain why the chair of the Santa Barbara division of the Academic Senate resorted to writing, “I like to think that the temporal rhythms of institutions—which can admittedly be frustratingly slow, particularly in relation to the frenzied pace of the news environment—are ultimately going to be our best defense.” Perhaps that’s the function of opacity too: the psychic defense of knowing little and thus having a reason never to be ready with a large and possibly successful counteraction.

 

Pressure seems to generate many bad ideas on high.  Faculty have had to spend time this year opposing ideas like converting the 7 quarter-based UC campuses to the semester system (look at the work already poured into this), or UCOP forcing universal adoption of root-level surveillance software on all UC computer hardware without consultation (this UC Irvine Senate resolution against the plan passed with a 94.9% yes vote). 

 

Unquantified, undebated budget calamity is also behind serious challenges to UC’s educational core. At the UCLA Faculty Association blog, Dan Mitchell summarized part of EVC Darnell Hunt’s commentary like this: 

 

After the student-worker strike a couple of years ago - which boosted labor costs - and given the current outlook of reduced federal and state support, the number of PhDs UCLA can train is being re-examined. The job outlook for PhD graduates has also been diminished by federal policy. Some departments in the past created sections staffed by PhD student TAs in order to support those students. Now only needed sections will be staffed. And UCLA is looking at whether even needed sections might be replaced by such tech alternatives as AI and remote/hybrid classes.

 

Hunt is suggesting a major shrinkage of UCLA’s doctoral programs, which will make undergraduate majors unteachable, which would require conversion of a large share  of instruction to online or “AI” instruction. Some unknown large proportion of graduate students would disappear, and undergrads would have college on their phones. 

It’s hard to imagine a better way to dismantle the UCLA product and brand--not to mention knowledge creation and public benefits.  And yet there seem to be private talks going on about this at senior levels. 

 

None of these budget disasters are acceptable. I hope more people will fight them furiously.

November 9, 2022, Hyde Park

This is my ISRF Director's Note for November. Higher education's main response to political adversity has been accommodation. My comments on this here are relevant to the U.S. as much as the U.K. situation, including the data on teaching and research losses.

The Democratic and Labour parties regularly hint around about breaking with neoliberal austerity to build an equitable economic order, and then they don't. There are lessons for rebuilding in 2025 as well.  

Let’s say you work for Disney, and you’re part of the group that CEO Bob Iger instructed to “fix streaming.” By “fix” he meant, keep it from losing money in every quarter for a total loss of $4 billion in 2022. Bob offered a public hint about how to do this: “Basically we invested too much.”

You come up with a simple plan:

1. You invest less in new content, avoid challenging and therefore risky content, and cheapen existing content. You fire some people.

2. You raise prices, a lot.

Source: The Honest Broker.

3. You plan how to cut 100% of the loss over 2 to 3 years.

4. You ignore critics who call this an Endgame strategy and post rude charts about paying more to get less while subsidizing your creative decline.

The result is that 1 + 2 = 3. You do enough enshittification of your product and workforce (1) while seriously jacking up prices (2) so that you achieve (3), the actual ending of all your loss-making. The culture gets worse (4), but you achieve your financial goal of revenues equal to or greater than expenditures—about break-even in just two years.

Source:  The Honest Broker.

How does this compare to higher education policy in England and Wales?  

1. You have already been investing less in new content, avoiding challenging and therefore risky content and cutting existing programmes of that type. You have been cheapening existing content with larger classes, narrower module choice, and the like. You have been firing people.

2. You tripled your prices in 2012, but accepted simultaneous cuts in public revenue and the benefits are gone. The Labour party has just granted you a 3.1% fee increase for home students, which will increase their 2025 fees by £285 to £9,535. This will increase your teaching revenues for these students by £390 million per year. (The only other change is a minor increase in the amount students are allowed to borrow for maintenance.)

3. Instead of making up 100% of your loses, you plan to shrink them somewhat.  You lost £1 billion teaching home students in 2021-22, so with the 3.1% increase you can cut that by £390 million, or about one-third? Sadly, no: that inflation adjustment just keeps you from losing an additional £390 million on this year’s teaching . You’re still losing £1 billion pounds a year (more since that 2021-22 figure, and National Insurance rises will take £372 million of that £390 million). Your plan, in effect, is to reduce your home teaching losses by 0 percent!

4. You ignore critics who say your 1 + 2 = 0 as a solution for the university and you don’t address their concerns. You stay caught between the media, which exclaims that the £285 rise after an eight-year freeze “is a further test of students’ faith”, and universities, as when Sussex VC Sasha Roseneil states the fact that “unfortunately neither students nor universities will find adequate solutions in these modest uplifts.” Domestic teaching revenue remains nearly one-fifth below what it was for someone starting university in 2012-13. And the public maintains their perception that higher ed is unable to manage its affairs.

In the Disney case, enshittification makes you solvent, meaning you can theoretically avoid the Endgame strategy. (Ted Gioia, the source of those charts, is pretty sure you won’t, and indeed the logic of shareholder capitalism cuts against mature companies reducing their returns on investment by investing in better product.)

In the British university case, enshittification leaves you in the same hole you were in before.

What would work better? Not turning universities into corporations like Disney, but the opposite.

They should state their actual financial needs as required by their essential public functions, and then set up a plan with government to fix 100% of the shortfall between what the functions cost and what they can raise without further harming their students.

Take this HEPI chart from one of my previous notes.

Figure reproduced from Higher Education Policy Institute.

Home university students need to be taught properly; universities need a further billion pounds a year to do that. Government should supply 100% of that loss with a central grant, booked as an expenditure like schools or NHS.

The Institute for Fiscal Studies reported that “in 2023/24, £1,034 million was allocated to fund the teaching of high-cost courses, including medicine, dentistry and other laboratory-based courses.” This amount needs to be more than doubled, to fund the shortfall on the rest.

Similarly, in 2020-21 research lost nearly £5 billion. Research is a public good and national priority for all political parties. The government should fully fund the indirect costs of research, fixing 100% of that £5 billion loss. The sector could construct a five-year plan to achieve this.

Another chart from the same note:

Figure reproduced from Higher Education Policy Institute.

These shortfalls between student need and student funds are ridiculous. They are not shortfalls in grants but in the right to borrow. Universities should press government relentlessly to fund full maintenance costs, including restored grants for lower-income students.

There’s always great agony about the public supporting students, since as graduates they are cast as an elite. This isn’t true of most graduate salaries, but more importantly it neglects the public benefits, pecuniary but especially non-pecuniary, that all of society reaps from ever-larger numbers of highly educated people.

The standard view also neglects the reality that students are subsidizing the public with their fees. Not yet published calculations by our research partner James Brackley show students paying about five-sixths of the (declining) funding for their instruction.

Figure used with permission from the author.

Government grants covering home student shortfall would go part of the way towards equitable sharing of the costs of benefits that are social as much as they are individual.

Full public funding would make sense to the public if higher education organizations, like Universities UK, tied it directly to better student learning, more and higher quality research results, and better public benefits.

When universities pitch graduate salaries, commercial spin-offs, and other private benefits while ignoring the need for much greater public contributions, it is an Endgame strategy. But it wouldn’t be hard to replace.