Archive for May, 1998
Of interest to our Emeriti members, we note that the Governor’s January budget included $4.8M for the increased cost of annuitant health and dental benefits. The May Revise lists an additional $2M. There was no discussion of this issue in the budget subcommittees. We will see how the final budget treats this issue.
UC Care is the only low-cost option for out-of-state medical care for UC employees and their families. According to the UC Faculty Welfare Health Subcommittee, it is in a downward spiral: rising costs and premiums have driven some employees away in favor of free or low-cost HMOs; enrollee exodus further drives up UC Care plan premiums. The urgency of the situation is compounded by the planned departure of Prudential from the health care business. UC is initiating a process that will lead to a competitive bid for the majority of the University-sponsored health plans to be effective January 1, 2000. The coverage currently provided under UC Care, Core, Prudential High Option, Health Net, and PacifiCare plans will be included in this bid. To give your input, access the Benefits Web Page www.ucop.edu/bencom through the end of August.
The DFA has historically considered health care a central mission and CUCFA has requested a consultation session on UC Care with the UCOP. Employees need to know about the economics of risk adjustment and why there might be value in paying a bit more for a health plan that offers freedom of choice now so that options are available in the future. For a full discussion of this issue, see the CUCFA Web page home.pacbell.net/ucfa which contains an article summarized below:
SUMMARY: Over 90% of the Pru-High enrollees over the last 5 years have left that plan and gone to UC Care. Between 1995 and 1998, UC Care premiums increased by approximately 10% more than a weighted average of HMO premiums offered at the University. The 1998 employee contribution rate of $16.82 , $33.83, and $47.08 (for 1 party, 2 party, and families, respectively) for UC Care was roughly twice as high as in 1997 and may increase dramatically in 1999. The HMOs at UC in 1998 are less costly: Kaiser, PacifiCare , and WHA are free; and Health Net is $1.60, $3.50, $5.07. When Health Net premiums rose in 1996 from zero for families to $20, Health Net lost 20% of its members to free programs and therefore reduced its premiums in order to regain membership. If UC Care increases premiums to accommodate some of the increased risk from Pru-High enrollees switching to UC Care, more healthy employees may leave UC Care.
If UC employees had only HMO choices available, possible consequences might be: 1. inability to receive treatment away from home (on sabbatical and out-of-area coverage for children at college); 2. lack of provider choice; 3. reduced access to specialists; 4. inability to choose a plan relying on fee-for-service reimbursement; 5. access problems for persons with chronic diseases.
Faculty Welfare is investigating risk adjustment strategies to control rising costs and still preserve a choice among providers. Among the strategies being considered are (1) UC would determine an average payment to health-care providers based on overall age of those insured. Employer contributions would remain constant but employee contributions would vary based on age (less for those younger and in better health, more for those older and presumably more in need of health care). (2) Institute graduated employee payments for those who are older. (3) Raise the deductible and/or copayments for POS (point of service) care, especially for services beyond primary care.
Perhaps no single adjustment will save UC Care, but almost everyone who has looked at the matter agrees that if nothing is done, it is not a question of if but when UC Care will self-destruct.
Let me update you on the current state of the UC budget negotiations in the Legislature, recognizing that nothing is final yet. The Assembly and Senate budget subcommittees have acted on issues of concern to us, in some instances agreeing with each other but in others disagreeing, which forces the issue to a Conference Committee. From there, if past years’ actions continue, matters may be taken up by the “Big Five,” consisting of the leaders of both houses and the Governor. Final action comes from the full Legislature, often late at night in frenzied activity to finish a budget long past published deadlines.
Background: Early in the 1998 Legislative Session, the Council of UC Faculty Associations expressed support for the Governor’s budget proposal for 1998-99 and, in light of predicted additional state revenues, set three goals for augmentations to the Governor’s proposal: 1. Adequate funding for enrollment growth ($23 million to fund 3200 students); 2. Restoration of funding for the California Subject Matter Projects , and 3. Adequate funding for all library resources at UC. The governor’s budget included a $3M appropriation for the California Digital library. CUCFA expressed early concern that this appropriation, while important in itself, could come at the expense of support for the traditional print collections that are indispensable elements of the teaching and research programs of every discipline in the University.
CUCFA representatives and our lobbyist, Jim Bruner, have been meeting with legislators and other key people to advance these goals. In the course of these meetings, we were asked to support a proposal to provide a budget augmentation for laboratory equipment for undergraduate science classes, to which we agreed. That triggered a plan to advance our own request for a budget augmentation to fund the UC libraries. We distributed information to legislators, including an article by Leon Litwak, published in the California Monthly, which describes the dismal state of the DOE library. Among others, we met with Senators Jack O’Connell (Chair of the Senate budget subcommittee), Cathy Wright (R-Simi Valley) and Bruce McPherson (R-Santa Cruz) and Assemblymembers Jack Scott (Chair of the Assembly budget subcommittee), Helen Thomson (D-Davis) and Dion Aroner (D-Berkeley). Aroner expressed great enthusiasm for our library proposal. Within days of our meeting, we learned that Aroner had brought the issue up in the Democratic caucus. Concurrent with these activities, UCB Chancellor Berdahl pledged to provide very substantial additional funding for the Doe library. Shortly thereafter, the Governor released his May Revise proposals which included: $23 million to fund an additional 3200 students; $12.2 million to restore funding for the Subject Matter Projects (with control language re. the projects and their oversight) ; and $10 million to upgrade and restock library materials. CUCFA is continuing to press for these funds; a report on the status of each augmentation is provided below:
Library Print Collections Recognizing that the system-wide administration’s efforts were concentrated on the enrollment funding and Subject Matter projects, we turned our lobbying efforts primarily to seeking additional funding and possible supplemental budget language to restore the UC libraries to their former preeminent positions among research institutions.
We sent key legislators a letter of support for all three issues and hand-delivered a position paper on the libraries’ current state. Because of deep budget cuts and inflation, print collections have been steadily eroding. Systemwide, the impact of inflation has resulted in serial cancellations at over 40,000 titles since 1988. The last previously-budgeted acquisition rate of 614,000 volumes has not been adjusted despite increases of almost 38,000 FTE students. The combined effect of these factors have resulted in an annual budgetary shortfall that currently exceeds $37M, of which approximately $10M is for staff; the rest is for acquisitions.
Both the Assembly and the Senate committees approved the $10M augmentation proposed in the May Revise. In addition, we persuaded Senator O’Connell to get supplemental report language (SRL) approved. We were unable to get the SRL onto the Assembly agenda, but Assemblymembers Thomson and Aroner will continue to help us with this effort as the issue goes to the Conference Committee. The language we submitted is as follows:
“In order to address the critical need to enhance University library resources, most specifically the acquisition of books, documentary materials and other information resources required by UC students and faculty for effective study, research and instructional missions of each campus, the Legislature directs the University of California to:
1) restore the campus libraries to their former preeminent positions among research institutions world-wide and to their proper roles as the intellectual centers on the campuses;
2) provide to the Legislature a two-year budget cycle plan beginning with the FY 99/00 budget year to restore the print collections (the traditional print library sources) in the UC libraries;
3) direct system-wide funding within FY 98/99 to address specific minimal base collections requirements matching individual campus augmentations; and
4) report to the Legislature and to the Governor on progress and plans in this regard prior to the FY 99/00 legislative budget deadlines.”
Enrollment Funding: Estimated enrollment for the budget year is 147,000 FTES, which is 3,200 higher than the projected budgeted level. UC asked for a $23M augmentation to cover the 3,200 FTE shortfall.. CUCFA sent letters of support for the augmentation and provided a position paper detailing the negative impact of overenrollment on undergraduate education, using facts and figures provided by the Davis campus. As noted above, the May Revise included the $23M requested. The Senate agreed to this augmentation, but the Assembly changed the figure to $20.3M in order to force further discussion of the matter in the Conference Committee.
Subject Matter Projects: CUCFA supported UC’s objection to the Governor’s proposal to redirect $12.2M from the nine Subject Matter Projects (SMP) by writing letters and providing background information. The SMPs comprise a professional staff development network with 99 sites statewide. The nine subjects are mathematics, writing, reading and literature, science, history-social science, international studies, foreign language, the arts, and physical education-health.
During the early budget sessions, this issue was deferred while UC negotiated with the Governor’s office. Just before the release of the May Revise, the Assembly approved the restoration of the $12.2M. The May Revise restored the $12.2M but with supplemental language agreed to by UC and the Governor: The control language stipulates, among other things, that the projects will be fully aligned with State Board of Education standards, be limited to core academic subjects (denying state funding for foreign language, arts, and physical education-health), and require that 75% of the teachers participating be from low-performing schools. It further requires that governance be strengthened to ensure adherence to state policies and that the program will be evaluated by June 30, 2002. The Senate budget subcommittee voted two to one to approve the funding but require that the language be subjected to a policy committee discussion since the negotiations were not public. The language needed to meet the Senate’s demand would require separate legislation. Thus, this issue is still open.
Other Issues of Interest: In addition, CUCFA has followed a few other budget items of possible interest to faculty:
1. California Virtual University: The Governor’s budget included $1M apiece for CSU and UC and $3.9M for the Community Colleges to allow each segment to initiate the development of courses for the California Virtual University. Both the Assembly and the Senate committees deleted the money for CSU and UC and reduced the amount for the Community Colleges by $1M.
2. Tenth Campus: The Governor’s budget included $9.9M to continue the planning and development of the tenth campus. The Senate committee agreed to this funding along with a requirement presented by the Legislative Analyst Office (LAO) that UC report annually on their progress. In the Assembly, the former Speaker, Cruz Bustamante, proposed a member request for $200M to accelerate the development of the tenth campus. The Assembly budget committee agreed to provide $50M. Thus this issue will need to go to the Conference Committee.
3. Outreach: The Governor’s budget included $5M to expand student outreach programs so that more K-12 students can become academically prepared to gain admission to the University. UC planned to add $2M to match the state’s $5M. The Senate committee approved the requested $5M. Before the May Revise, the Assembly committee, expressing concerns about admissions data indicating a reduced number of under-represented students at UCB and UCLA, voted to add an additional $5M and to require UC to redirect $10M from its base budget to outreach, thereby creating a total of $20M. After the May Revise, the Assembly committee agreed to a compromise with UC to reduce the redirected amount from $10M to $5M and increase state funding for outreach by an additional $18M, thus creating a total of $33M. CUCFA is concerned about where the redirected $5M could come from in UC’s budget. As many of you may recall, in the budget negotiations last year, UC dealt with an undesignated cut of $9.5M by delaying all range adjustments by one-month .
Conclusion: All of this budget activity assumes a substantial wind-fall in state revenues, estimated to be $4.4B by the Department of Finance. The Legislative Analyst sets the figure somewhat lower. And, of course, every one has plans for it. The Governor has proposed a Vehicle License Tax rollback which could take the lion’s share. The state employees are still fighting to get their pay increases, complicated by collective bargaining issues, etc. Meanwhile, many people in the Capitol are trying, so far unsuccessfully, to craft a bond measure for all of education for the November ballot. The job of the Legislature is far from over for this session. Nonetheless, things look promising for UC so far, and we believe that CUCFA’s effort, albeit with support from a number of other sources, has benefited the University and served the interests of the faculty.
A Nominating Committee consisting of Allan Edelson, Demo Pappagianis, and Kathryn Radke has selected the following slate of candidates to fill DFA Board vacancies:
Eugenio Amparo (Med: Radiology), Alan Elms (Psychology), Bill Lasley (VM:PHR), and Ariena Van Bruggen (Plant Pathology). All nominees have agreed to serve. Their two-year terms of office will begin in Sept. 1998.
Further nominations may be made upon petition of 5% of the membership (15 members) in good standing as of April 1, 1998. Such petitions must be delivered on or before June 8, 1998, to the Executive Director (address above). Nominees must have agreed to serve. If no nominations are submitted, the slate shall be accepted as elected.
Members of the above slate will join the current Board: Jonathan Sandoval, Charles Nash, Ben McCoy, Yvette Flores-Ortiz, Floyd Feeney, Cecelia Colombi, and Don Abbott. Current board members leaving the Board are Sidney Gospe, Mark Matthews, and Lenora Timm. We thank them for their fine service.