To the Trenches Over Tuition Hikes: Battle Over UC Funding Now Shifts to Sacramento

By Vicki Haddock

It’s being called a treacherous game of chicken. A brutal chess match in which students are pawns. A battle for the soul of public higher education in California.

Whatever it is, it isn’t over yet.

Thursday’s 14-to-7 vote by the UC Board of Regents to approve a plan that could raise undergraduate tuition on all ten University of California campuses by as much as 28 percent over the next five years had three predictable outcomes. It sent student protesters to the barricades (or to be more precise, at UC Berkeley, to a sit-in sleep-in protest at Wheeler Hall). It tossed the outcome to the corridors of Sacramento, where the governor and Legislature must ultimately decide whether to avoid the tuition hikes by giving the UC system hundreds of millions more in state funding, or balk at the ploy they equated with hostage-taking.

And it ignited even fiercer debate about how the UC system, the now-jeopardized “jewel in the crown” of California education, landed in such relatively dire financial straits—and what can and should be done to extract it. Among the tuition hike alternatives, each of which faces intense opposition: creating more online classes, slashing the number of UC administrators and staff and their salaries, and admitting an even greater percentage of full-fare-paying foreign and out-of-state students.

The fate of UC’s financial future was cast this week as a showdown between two politically savvy Western Democratic governors: California’s third-term governor (and Cal alum) Gov. Jerry Brown, and Janet Napolitano, the former governor of Arizona who is now in her second year as UC’s president.

Frustrated by what she refers to as “the state’s massive disinvestment” in its UC campuses—state general fund support per student plummeted in the wake of the recession—Napolitano had abruptly proposed that unless the state comes through with significantly more money, tuition should start rising by as much as 5 percent a year for the next five years. UC needs the extra money, she contends, to help pay for employee pay and pensions, and to admit 5,000 additional California undergraduates in five years.

It was a political “en garde!” to the frugal Brown, who has offered UC campuses a 4 percent increase in state taxpayer dollars next year. And a majority of the Regents went along with Napolitano. In the words of Regent Bonnie Reiss, “If the state doesn’t prioritize higher public education, our options are limited.”

But the dissenting Regents, a largely political group that included the governor, lieutenant governor, and current and former speakers of the Assembly, were unconvinced and some appeared resentful of the tactic. Former Assembly Speaker John Perez offered his fellow Regents this admonishment: “I will tell you, as somebody who had to negotiate budgets with this governor and the previous governor, that if you come in in a hostage-taking posture that says ‘Either give us X or this is what we’re going to do to our students,’ ” that is not the most productive path.

In particular, the iconoclastic Brown’s history suggests that if he feels anyone is trying to corner him, it only makes him dig in deeper. Sure enough, the governor suggested that if the Regents raised tuition, they could forget about the UCs receiving that scheduled 4 percent increase in state support.

Instead he urged UC administration to do more to prune its budget, including boosting online courses, awarding credit for work experience, offering three-year bachelor’s degree programs, concentrating specialties on particular campuses, and expanding its role as a two-year finishing school for community college graduates.

“The pressure of not having enough money can force creativity that otherwise cannot even be considered,” Brown said. “We’re not talking that there’s a scarcity here that makes it impossible to live with.”

Regents from the corporate world, such as former Paramount Pictures CEO Sherry Lansing and investment banker Dick Blum (husband of Sen. Dianne Feinstein), argued that the state was failing to live up to its obligations and that only by paying higher salaries to administrators and faculty could UC campuses attract top talent. At their last meeting, Regents awarded several chancellors earning more than $300,000 a year 20 percent raises, and Napolitano has drawn a base annual salary of $570,000. The governor’s salary is less than $178,000.

“I want to point out that you run an investment banking industry and this is a public university,” Brown told Blum during this week’s Regents meeting. “This is not Wall Street; this is the University of California. The public university has as its mission public service.”

But the public university also is increasingly not funded by public tax dollars. In fact, following a general pattern of decline, the state funds less than half—42 percent—of what the university categorizes as “core educational funds” (excluding med centers, grants, contracts and so forth.) The remaining 55 percent is now paid for primarily by student tuition and fees.

Student Regent Sadia Saifuddin, a Berkeley senior, told the Regents what it was like to work four part-time jobs to pay for her own tuition. “Amongst all of this political posturing, rhetoric and drama, I think you need to understand what the real-time effect of this is on students. Six hundred dollars may not seem like a lot, but that’s almost an entire month’s rent for some students who are barely making it. I was one of those students.”

She joined Brown in voting against the tuition increases, but delivered a message to him as well. “As leader of the state, the ball is in your court. It’s easy to point fingers and say the other person isn’t doing his job, or is spending too much…. We need to create a plan that restores state support.”

And UC San Francisco professor Stanton Glantz, vice president of the Council of UC Faculty Associations, insisted that the Regents and Napolitano were  all wrong in their response to state cuts: “You should not be arguing how much to raise tuition, but how to mobilize the public support to restore the California Master Plan of low-cost, high-quality higher education for all.”

The question now may indeed be who can mobilize the public. At Berkeley, students are strategizing about how to capitalize on this weekend’s crowds at the “Big Game”—the annual football game against Stanford—by energizing alumni to carry the crusade against tuition increases to Sacramento.

Although polls indicate that about two-thirds of Californians believe the cost of higher education is a big problem, it’s hard to say who will ultimately lay the greatest claim to public support. An editorial in the Los Angeles Times demanded extra state funding but also acknowledged that Napolitano’s tuition hike plan “may be necessary to protect the university.” The Times noted that even if in-state tuition did climb up to $15,500 in five years, UC would still be less expensive than some other top-ranked publics such as the University of Virginia, and that families with annual incomes of up to $150,000 would receive financial help through the state’s middle-class scholarship program.

But the Times’ Capitol Journal columnist, George Skelton, had a different take, labeling the tuition proposal “dumb PR, losing politics and really bad policy. Don’t ask the kids and their families to sacrifice while fattening the pocketbooks of your own already highly compensated chancellors. That’s not fair to people in the real world of stressed taxpayers and parents struggling to pay their kids’ tuition.”

UC officials reject the notion that lavish spending is to blame for any of this. They point to an analysis from the Public Policy Institute of California that concludes tuition hikes (per-student net tuition doubled from 2002 to 2012) were largely due to a steep decline in state support. The analysis noted that the UC system showed a steady drop in administrative costs until 2012, when the administrative cost per student began to climb from $3,519 to $4,025.

What clearly is a major factor is the UC pension fund, which this year will gobble up $1.3 billion, or about 5 percent of UC’s overall operating budget. The system incurred $7.2 billion in unfunded liabilities after the state, the university and its employees all took a two-decade holiday from contributing to the once seemingly flush plan. Now that everyone has belated realized the miscalculation, they have begun arguing over who should pay to build the fund back. Thus far, the state is refusing to kick in, although UC’s chief financial officer Nathan Brostrom told the Sacramento Bee, “Frankly, if the state were to pay that, we would not be proposing a tuition increase. That is money that could go to other resources.”

So what’s next? The governor and Legislature will no doubt be gauging voter reaction as they decide whether to relent and begin the restoration of a truly publicly funded higher education system, or just say no and hold UC’s feet to the fire.

In which case, students say they are the ones who will get singed.

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Comments

Does California deserve a world class University system? If the UC looks like the DMV, will it attract the best minds? What is the income difference of UC grads and their future contribution to the State vs. non UC grads? … Wake up Sacramento!
What Govenor Brown proposes is like squeezing the PB&J sandwich really hard so that the students & the tax payers don’t change ground. You end up with a mess that amounts to a HUGE dilution of the quality of education provided by the UC System. This lowers creativity & the perception of the quality of the graduates. They get lower salaries & pay fewer taxes. They are not as thoughtful & productive as they might have been producing less income for their companies & this results in lower taxes revenues to the state. The equation is simple, this is an investment. Within a certain range you get what you pay for. (And since when did $150,000 become a middle income family???)

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