As Chris pointed out, there was a striking gap at last week's Regents' retreat.  On the one hand, there was a new discourse of educational decline--but it remained strikingly vague.  On the other hand, there were a precise set of financial proposals--but they were neither new nor up to the challenge.  As is so often the case with the Regents, their distance from the actual functioning of the University (especially as it takes place on the campuses) became clear.  But we would be hard pressed to think that the business officers were any better.

Appropriately, much of the discussion focused on the cuts in state funding and their effects.  It appears, that Oakland is finally recognizing that they can no longer issues warnings about the potential damage of future cuts but must instead begin to demonstrate the already existing damage resulting from prior cuts.  That recognition is welcome.  But if it is to lead to something new it must be accompanied by a second recognition:  that it is unclear that UCOP is prepared to act effectively on that realization.  There are what one might call an external and an internal dimension to this problem.

The most important statement of the morning session of the UC Regents’ retreat came from President Mark Yudof, who for the first time that I have heard put the decline of UC academic quality at the top of the Regents' agenda.   He kicked things off (around 0:24 on the UC FA Blog's recording; Yudof Facebook version) by saying that the University of California is experiencing a “quiet but steady erosion of our academic quality at almost every level.”  He noted that people often express outrage at rising tuition, pension cuts, and various other UC policies. But where, he asked, is the outrage at the erosion of academic quality? He said that the board, in trying to cope with funding problems, had taken a series of passive decisions that damaged quality.

  
There were no board votes approving faculty salaries that are not competitive with peer institutions, . . .yet we are 10-20% behind in faculty compensation. There were no board votes approving a freeze on faculty hiring, but effectively that is what we’ve had over the last few years. There were no board votes approving a steady rise in our student-faculty ratio over the last decade, but in fact our numbers show a decline over the decade of 50% -- that is, we have 50% more students per faculty member than we did in previous decades. And in the past six years we have 30,000 more students without adding any new faculty at all, other than replacing existing faculty. You didn’t vote on any of that, but that is the consequence of the situation in which we find ourselves.   

The University of California with its legacy of trailblazing academic quality deserves better.  It is up to those of us at this table to reaffirm an active, immutable commitment to academic quality at UC, starting now.

This was music to my ears. The idea of fighting educational decline is not new, of course—the faculty senate committee for planning and budget (UCPB) started arguing in 2002 that threats to quality quality was the key argument against budget cuts, stated this directly to the Regents in 2007, and then the press began to cover quality problems during the fiscal crisis in 2009. What is new is the statement that declining academic quality is the university’s number one problem, or the declaration of a kind of educational quality emergency.  There is hope that rebuilding quality will finally get our undivided attention.

The retreat then turned immediately to balance-sheet and business strategies, led by Nathan Bostrom and Peter Taylor, at the head of business and finance respectively.

The Regents love these guys, and they are indeed both very articulate and also good at encasing budget strategies in a language of educational goals.  But the morning passed in a parade of previously rehearsed small-time revenue measures.  The second piece of good news was that the Regents seem finally to be tiring of the mismatch between the revenue problems and these business-process solutions.

The scheme that brought out some frustration was “parking securitization.”  The actual ownership structure remains undecided and unclear, but the basic idea is to bundle most of the parking spaces at all the campuses and transfer the concession, valued at maybe $1 billion, to the UC Retirement Program, which would then feed UC systemwide parking revenues into the pension fund.  The relevant slide (10) suggests selling bundled systemwide parking to a 3^rd party, which made many people immediately think of the disastrous sale of Chicago’s parking meters to a company that has screwed everything up.  Mr. Taylor insisted no 3rd party would be involved, but this did not quell the uprising.

For example, Regent Schilling commented, “I assume the campuses rely on this revenue?” Mr. Taylor said well yes, but the revenues they rely on for maintenance and operations would stay on the campuses and another portion would go to UCRP – you “can slice and dice this any number of ways.”  Regent Schilling said that she'd asked because, “I just want to be careful that we don’t screw the campuses.” Not screwing the campuses quickly made the plan more confusing and also chopped away a any likely returns.

Raising another core issue, another regent said it’s strange that this is the exact opposite of the Luskin hotel and conference center we just voted at UCLA.  There, he noted, we are trying to build new assets for the future when we could get the same thing—hotel rooms—for a lot cheaper right now by going down the road.  With parking, you’re proposing that we get rid of assets we already have. How do these opposite strategies fit together?  Regent Blum chimed in by saying that as much as he admires UCOP's creative financial team,  parking securitization is a very bad idea.  The real problem, he said, is we haven’t paid into the pension fund for twenty years, but that doesn’t mean we should transfer assets.  Overall, parking securitization went nowhere.  Since the campuses do indeed skim parking for all sorts of local operational needs, this scheme will encounter massive resistance and is very unlikely to happen.

Most of the other business ideas have been around for a while—a controversial kind of bond restructuring ($50 million in annual savings, slide 8); moving of short-term funds from lower- to higher-interest instruments ($30-$50 million, or $40 million on slide 9); the taking by UCOP of accumulated interest from thousands of campus “funds functioning as endowment” (FFE) (a one-time $20 million, slide 7); the use of standardized systemwide vendor contracts ($50 million annually at the medical centers, with another $50 million estimated for the campuses); and finally, cuts to unfunded state-mandated programs. About two hours for all revenue increases that don’t involve further cuts to faculty, students, and staff.

No one who spoke in the meeting  believed that you can add up these savings and get something like $200 million in new money that could be put into instruction and research.  Regent Blum pointed out with some exasperation that the umbrella contracts were proposed by a previous consultant five years earlier, and that a now-retired UCOP official had worked full-time on savings that never materialized.   Say with great effort that $100 milion were saved. That would amount to about 5% of the cuts plus mandatory cost increases UC has suffered since 2008.

So following Mr. Yudof's great kick-off, the discussion got sidetracked from the issue of reversing educational decline by getting UC out of structural deficit mode and into a full budget.   The obvious first problem with these business strategies is that the scale is too small by an order of magnitude.  The second problem is that UCOP keeps circling like a moth to the flame around ideas that involve a reach-in on campus resources, in the campus's worse financial period since the Great Depression. Mr. Taylor joked several times that for what he is about to propose he will need to hire bodyguards.  So why keep making this kind of proposal?

This gets us to the third problem, which is a flawed managerial epistemology.  It says in effect that management expertise bring with it a higher-order wisdom that creates new value by overriding local practice.  UCOP's plans always link efficiency to centralization. In reality, centralization is as likely to cost money as it is to save it, since coordination requires time and more money while at the same time suppresing tacit knowledge, concrete relationships, accumulated know-how, on-site experience--the whole craft practice involved in particular administrative jobs in specific communities that address distinct needs.  The centralization override is not only painful and frustrating for the affected employees, but is destructive of the knowledge that resides in them.  CFO Peter Taylor is eloquent on the beauty of standardized contracts that leverage size and scope—I have never heard better speeches on the virtues of vendor consolidation. But finance people aren’t often great students of humanistic management theory, which does grasp both the ethics and the value-added of freeing up employees to structure their own work and make their own decisions in horizontal collaboration with each other. Under questioning, Mr Bostrom and Mr Taylor did concede that campuses and departments may sometimes be right to say that they know what they’re doing.  Once this truth is admitted, many of the expected financial savings disappear.

The fact is that educational quality comes from the campuses, will be fixed there, and will be fixed from the bottom-up.    Possible administrative savings of $100 million via better vendor contracts and interest rates should be seen as financial officers doing their jobs, not as pathbreaking reforms.  The latter will count only when the affect the quality of a UC education. 

As you have probably seen (since it has been covered by the Financial Times, Business Week, the LA Times, Inside Higher Education, the Chronicle of Higher Education, and other news outlets) the System-wide Coordinating Committee on Graduate Affairs suspended its review of the proposed transformation of the Anderson MBA from a state-supported program to a self-supported program.  Chris offered an analysis of the proposal's budgetary confusion back in June. CCGA offers a full menu of objections.

For those of you keeping score that means that both Senate Committees (UCLA's Graduate Council and CCGA) that had the time to do a thorough review of the proposal refused to approve it.  The Legislative Assembly at UCLA had supported it by a small majority in a June meeting.  But it should be noted that that meeting had a severely limited time for discussion, crucial financial details were only made available to the Assembly the day before the meeting, and the voting began before the discussion had actually finished (although the administration had been given its own time to speak).  Despite the seriousness with which the Legislative Assembly members approached their task, it is hard to see how they were provided with the opportunity for careful analysis that the Senate Committees had. 

Just in time for the two major political parties to offer their different visions of austerity, the California Community College system released a report based on their survey of the effects of the budget cuts.  Not surprisingly, the cuts have dramatically reduced the ability of the Community College system to offer courses and opportunities for those seeking to enter higher education through the most affordable door.

Just in time for the fall rituals of orientation and enrollment, the Center for the Future of Higher Education in conjunction with the New Faculty Majority Foundation has issued a new report entitled "Who is Professor Staff, and How can this person teach so many classes?"  The report points again to the centrality of contingent labor for the present organization of higher education.  It details, in important ways, the impact of the present labor system not only on those who teach but on those who learn. The report is based on a survey of contingent faculty carried out by the Center.

As "Who is Professor Staff?" makes clear, the majority of teachers in higher education are not only contingent faculty but are part-time contingent faculty.  Moreover, a majority of those the Center surveyed taught at more than one college or university, some taught in several institutions.  This prevalence of part-time faculty is not simply an effect of the overwhelming predominance of two-year community colleges--over half of the respondents taught at a four-year institution (even if in addition to a two-year institution). (4)  Despite the common perception of higher education populated with tenured and tenure-track faculty it is the reality of contingent and part-time faculty that is the dominant fact in the labor system of higher education.  Reliance on contingent faculty is also the prime mechanism through which university and college managers have sought to cut instructional labor costs.  And, of course, this point does not even address the  importance of Graduate Student Instructors at the university level.

Bain passes judgement on UC. 

CA Democratic party formally opposes Prop 32--the measure designed to weaken unions.

Some reflections on "leaving academia."

Business officers wade into academic affairs.  Here is some of their reasoning.

Are professors really obsolete?

Harkin releases committee report on For-Profits.  If you are looking for summer reading here it is.  Another Congressional report notes that profits not learning drives the pay of For-Profit executives.

Coursera has a recruiting party.

Court rules Michigan State rule violates constitutional protections for free speech.  It tried to punish anyone who disrupted an employee at his or her work.

Bill Keller wants to protect the wealthy and the war machine, lower everyone else's living standards.

Is UC "starving the humanities"?

In another display of leadership, UC Berkeley scrambles aboard the MOOC bandwagon.  Bousquet offers thoughts on the MOOC model.

Irvine to start new School of Education.  (t/h Cloudminder)

Berkeley negotiates new Federal ICR rates.  I thought UCOP was supposed to do this sort of thing for all campuses?

Physical campuses remain essential.

Is UC Davis facing another scandal?

Memo to digital zealouts: it turns out that computers are NOT the best metaphor for the human brain.

A recent Bain & Co report on higher ed, on sustainable funding, has irritated some people as much as their equally flawed analysis of admin costs at UC Berkeley irritated us. Most critics are responding not only to the report's claim that 1/3 of the country's colleges are financially unsustainable, but to the fact that this unsustainable group includes the richest universities on the planet, including Dartmouth, Harvard, Princeton, and Yale.  This does suggest on its face that their methodology doesn't make sense.

Yet the report also makes true and important points which I'll get to below, before discussing how the corporate consulting community is likely to use their interactive websites and exploding hairpieces for educational evil and not for good.

What the authors do is look at two ratios of financial health and locate the 1700 universities they reviewed on a nine-cell matrix.  Each institution is rated by its increase in expenditures to revenues (the "expense ratio"), and its decrease in assets to liability (the "equity ratio"), both of which are bad.  Unfortunately, the data behind their equity ratio ends in 2010, before endowments (and later, real estate) had started to recover, making schools look poorer than they are.  As for expenses, the poorest UCs, UC Santa Barbara and UC Santa Cruz, are more "sustainable" than Harvard and Princeton because they have lower expense increases, which in public Us we call "budget cuts."

The latest on the Colorado movie theater assault.  The alleged shooter graduated from UC Riverside.

Campuses outline the effects of the funding cuts.   The Regents--with the exception of Russell Gould--vote to support Brown's tax initiative.  But they still raise professional school fees.

The Regents cave on UCLA hotel.  

UCLA Committee on Academic Freedom supports professor against allegations of political bias.

CSU Board approves pay increases for new campus Presidents.  But they are still considering raising tuition, reducing enrollments, and laying off people.

Consumer Financial Protection Bureau and DOE release report on private student loans.  It isn't a pretty picture.

The Recession is destroying Public Universities.

Oregon Bill proposes to give universities more autonomy but to limit annual tuition increases.

What online education can't do.  But its promoters do hope to make money.  Subsidized by others' labor of course.

By Wendy Brown

Outgoing Co-Chair, Berkeley Faculty Association

On July 16th and 17th, The New York Times featured stories on the launching of Coursera, a blockbuster online higher education project emerging from a spectacularly successful Stanford experiment two years ago.

Still in the early stages of development but already reaching hundreds of thousands of learners, Coursera promises to disseminate academic knowledge for free to anyone with access to a computer. The courses are not offered for credit although certification of completion is available. This "impediment" (which reminds us that online learning is not a direct substitute for classroom learning) does not seem to be one. Millions around the world are registering for fall 2012 Coursera courses.
 
Many elite universities have signed on to Coursera, including Princeton, Stanford, Penn, Duke, Hopkins and a range of publics, among them Illinois, Michigan and Virginia. The University of California (with the exception of UCSF) is notably missing from the list of participating universities.

Where is UC? As you will recall, last year Berkeley Law School Dean Edley borrowed $7 million from UCOP to launch a UC for-profit online higher ed project, one that he promised would lead the way in the elite higher ed market, reap hundreds of millions of dollars for the university AND produce social justice as it extended a UC education to those who could not afford to leave home.  

The central facts about UC's budget for next year are first, that tuition will not go up, and second, that the state will provide no new operating funds after last year's 25% cut.

Both of these outcomes remain hog-tied to the passage of Gov Jerry Brown's tax initiative in November.  If it fails, UC will receive a "trigger cut" of another 10% of its remaining state funding (or $250 million), and students will see tuition go up, probably around 20%.

UC's status as a political football puts it in the company of the entire educational sector of California. The California Budget Project offers a graphic (above) showing that Jerry Brown's trigger cuts would fall on education in a proportion of 98.4 percent. 

Politicians continue to trumpet their commitment to an educated California workforce, since it is obviously stupid to produce an ever-less-qualified population in a global economy in which everyone else is elevating theirs.  But in practice, both parties have lumped all levels of education together with public health and welfare and downgraded their quality and scope year after year.  The reality of the New California is reversion to a (declining) American mean.

In the context of the state's well-known failure as a political entity, it's understandable that UC officials would want to decouple the University from the state. But this decoupling only further degrades UC's fiscal, educational, political and ethical position, and we have to say for the hundredth time that the Office of the President needs to resist the decoupling temptation.

This month's proof comes in the form of the lousy budget deal itself.

As those of you who read Jim Chalfant and Susan Gillman's recent post will remember, the systemwide task force on Rebenching recently completed their work.  Although UCOP has not made public the results of their deliberations (I will leave it to you to speculate on why not) the Senate has now posted the report at its website.   This report is a proposal that develops and specifies ideas broached in last summer's report from the "Implementation Task Force" on the rebenching process.

As Jim and Susan indicated, "rebenching" is one of two steps UCOP is taking to reorder the way that funds are distributed within the system.  The first step, the "funding streams initiative" was designed to enable individual campuses to retain more of the funds that they generated.  This second step of "rebenching" aims to overcome historically generated inequalities in the distribution of state funds in order to ensure that any given student is funded at the same rate as any other student within his/her category (so that all undergraduates, all professional school students, all graduate students, all health care students etc are funded at the same rate) no matter what campus they are attending.

This proposal on Rebenching has now been sent to all of the Campuses for discussion within their Senates this fall.  Its final form will affect faculty, staff, and students on all campuses.  So it is worthwhile to read it and to let your local senate and managerial leadership know what you think.  Please feel free to use the comments space here to open discussion or to raise questions.  Hopefully, people with information might be able to address questions. 

At the same time, though, we need to recognize, that "funding streams" and "rebenching" are really only two legs on what needs to be a three-legged stool.  If UC is to achieve the goals of these initiatives it must be able to convince the state to increase state funding.  If UCOP does not succeed in making its case to both the Governor and the Legislature and succeed in persuading the people of the state that it deserves that funding, these twin initiatives will not succeed in holding the system together and improving students' education.  The lack of additional funding will undermine the effort to increase resources to the underfunded campuses without causing the wealthier campuses to fracture the system further in search of increased revenues that they could keep under funding streams.

To make these initiatives work to strengthen the University, it is crucial that the university for the first time in memory begin to articulate a convincing case for the importance of a public research university to the state and to those who enroll at UC, and make that case in terms of the education that will be offered only with additional funding.  In the present economic situation this effort will not be easy of course.  But UC can only succeed if it actually tries.

Protesting the July Regents Meeting.

Some info on the California Ballot Propositions.

California cities slashing services, looking towards bankruptcy.

UC Berkeley settles law suit alleging anti-Semitic behavior.

Don't even know where to start about Penn State.

In 2010, small rise in the percentage of young people completing associate or bachelor degrees.

Higher Ed is good business.  And smart for society.

Is College Unaffordable? The Debate continues.

Is the decline of public education deliberate?

College attainment shifts to Asia.

Yudof to tell Regents:  If Tax hikes don't pass, tuition may go up 20%.

Community Colleges consider new enrollment priorities.

San Bernardino declares bankruptcy.

Field Poll:  Californians are pessimistic about the economy's future.

Brown to sign foreclosure relief bill today.

The NLRB impounds ballots in the Duquesne Union election while they decide what to do. 

Surprise!  Wealthy Universities are really, really wealthy.  Public Universities...not so much.

More tech transfer going on in the great Northwest.

And there is a battle over faculty salaries up there as well.

Seattle Swat team raids the apartment of Occupy organizers.

Are MOOGs really all that?

The importance of listening.

University applications in UK drop as fees rise.  

Where exactly is Mitt's money?

Canadian scientists protest Government's attempt to sideline scientific research in the interest of opening up natural resources for development.  Sound familiar?

Spanish Government decides to intensify austerity.  I guess because it has worked so well elsewhere.

The Budget Agreement passed last week--especially as modified by Governor Brown's line-item vetoes--takes several more steps towards dismantling the social infrastructure that has enriched California for decades.  In both its specifics and in its political vision, the budget sacrifices the present through austerity and gambles the future in an appeal to Californian's lowest social and political inclinations.  In keeping with Brown's ongoing failure to offer a political and social vision beyond what Chris has called "neo-Hooverism," the budget links together a technocratic lack of imagination with an effort to shore up managerial control.  Despite the occasional gesture to his older desire to be a futurist--as in his continued support for high-speed transit--Brown seems unable to move beyond already failed policies.  Brown was born in 1938, the year after FDR prematurely pulled back on the New Deal.  Apparently he wants to return the economy to the state it was in the year of his birth. 

Although the budget contains a complex of strategies and programs--including Brown's effort to shift more of governmental activity back to the counties--the nature of the budget (and Brown's vision) can be seen clearly in 4 areas: Higher Education; K-12 education; Resources for the poor and sick: and his insistence on the logic of austerity.  Let me take each in turn.