Davis Faculty Association

In Friday’s NY Times, conservative columnist David Brook wrote about wise uses of federal stimulus funds in the Obama administration. He quoted Michael Porter of the Harvard Business School :

“Send federal money to the states, but make sure a lot of it goes to state universities. There’s going to be increased demand for their services at the same time their budgets are cut. We can’t weaken that link in the social mobility chain.

The full article is at
http://www.nytimes.com/2008/11/28/opinion/28brooks.html

This is an idea that the faculty of UC can certainly support.

Some highly important news about UC’s budget and the UC Retirement Program (UCRP) came out of last week’s Regents meeting.

As expected, UCRP’s investment portfolio has been hard hit by the recent economic turmoil. It has been reported that the portfolio lost 24% of its value between June 30 and October 31 (this compares to a 23% loss CalPERS reported for a similar period [see http://www.sacbee.com/391/story/1393637.html]. Since this loss is in fiscal year 2008-09, it is not counted in the calculation for setting the UCRP contribution levels that begin this coming July 1, which has been set at 11.54% of payroll. If the market does not improve markedly, future contribution amounts will have to be set higher, perhaps as high as 20% of payroll.

Of the 11.54%, 2% will come from employees via a redirect of the mandatory contribution employees currently make to their DC Plan accounts. The remaining 9.54% will be the employer share. To fund the state funded portion of this employer share, UC is asking for $228 million from the state in its 2009-10 budget request.

This $228 million is the single biggest new expenditure item in the budget UC is sending to the state. The overall request is for an increase of $815 million in funding for UC — a 15% increase over the previous year, mostly from the state, but some from the student fees of additional enrollment and other sources. UCOP and the Regents consider this the minimum amount needed to maintain current quality without raising student fees given increases in enrollment and costs.

This budget proposal includes about $80 million to give ladder rank faculty a 7.5% raise (the current year budget has no faculty raise and UC faculty compensation lags its comparison institutions; UC estimates that in order to achieve parity with the comparison institutions, UC will need to provide 7.5% increases each year for three years running).

Of course, the state’s budget is deeply in the red. Avoiding a cut, much less getting an increase of hundreds of millions of dollars, will be very difficult.

The UCRP slide presentation (14 page PDF) is available at:
http://www.universityofcalifornia.edu/regents/regmeet/nov08/f10attach1.pdf

The UC budget proposal summary (30 page PDF) is at:
http://www.universityofcalifornia.edu/regents/regmeet/nov08/f6summary.pdf

The full UC budget proposal (180 page PDF) is available at:
http://www.universityofcalifornia.edu/regents/regmeet/nov08/f6current.pdf

PPIC’s second survey on Californians’ opinions of higher education has been released. There is a lot of useful material here for the FA’s outreach and advocacy efforts.

The full survey report is available at: http://www.ppic.org/main/publication.asp?i=848

PPIC’s press release is pasted below:

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Californians Satisfied With Quality But Worried About Costs At State’s Colleges, Universities

A Decade After Affirmative Action Ban, More Than Half of Residents Say Diversity on Campus Is Very Important

SAN FRANCISCO, California, November 12, 2008 — Californians give the state’s higher education systems high marks for quality but see college costs and a lack of government funding as top issues, according to a statewide survey released today by the Public Policy Institute of California (PPIC) with funding from The William and Flora Hewlett Foundation.

At a time when the state’s economic crisis is deepening and the financial fortunes of many families have worsened, Californians see higher education as important to the futures of their own children and to the state. They are concerned that college is affordable neither for their own families nor for others.

Most parents of children ages 18 and younger (71%) say that students have to borrow too much money to go to college, and most are very or somewhat worried (72%) about their own ability to afford a college education for their youngest child. A majority of Californians (59%) and residents across regional and demographic groups say that qualified students from low-income families have less opportunity than others to get a college education. And there is evidence that this is a source of concern: Although voters banned higher education affirmative action programs a decade ago, majorities of residents today say it is very important that public colleges and universities have student bodies that are racially diverse (55%) and economically diverse (57%).

Yet residents have little faith in their leaders’ ability to meet the challenges ahead. Just 12ercent have a great deal of confidence in the state government’s ability to plan for the future of the state’s higher education system.

“Californians’ belief in the importance of higher education is strong, and their regard for the state’s educational system is high — but their trust in state leadership is low,” says Mark Baldassare, PPIC president and CEO.

Californians Place High Value on College

In a national survey conducted by Public Agenda and the National Center for Policy and Higher Education last year, 50 percent of Americans said a college education was necessary for success, while 49 percent said there are many ways to succeed without going to college. By comparison, 68 percent of Californians in the PPIC survey say college is necessary and just 30 percent say there are many other ways to succeed. Latinos (84%) place a particularly high value on college. They are more likely than Asians (69%), blacks (63%), or whites (57%) to view a college education as essential. And in a PPIC Statewide Survey on K­–12 education in April, Latinos (61%) were far more likely than Asians (31%), blacks (30%), or whites (21%) to consider college preparation the most important goal of K–12 schools.

Nearly all Californians across regional, political, and demographic groups say that higher education is very or somewhat important to the state’s future economic vitality and quality of life. Latinos (80%) and blacks (74%) are the most likely to say it is very important.

Community Colleges, CSU, UC Get Good Grades

In sharp contrast to their opinions of the K-12 system, Californians have a high regard for the state’s public colleges and universities. Only a few Californians (18%) consider the quality of higher education in the state a big problem, the same percentage as in PPIC’s first survey on higher education in October 2007. By comparison, in an April PPIC survey on public schools, more than half of the state’s residents (53%) said the quality of K–12 education was a big problem.

Californians give high grades to all three branches of the higher education system: community college (51% good, 15% excellent), California State University (52% good, 10% excellent), University of California (50% good, 15% excellent).

College Costs Top List of Concerns

With an economic crisis affecting family finances, the availability of student loans, and state funding for public higher education, college costs are on the minds of Californians. An overwhelming majority (84%) say affordability is somewhat of a problem (32%) or a big problem (52%).

Californians (35%) mention cost more than any other issue as the most important one facing higher education. Cost is the primary concern among all political, regional, and demographic groups. While this level of concern is the same as PPIC found in last year’s survey on higher education, a larger percentage today cite a lack of government funding (19% vs. 14% in 2007) as the most important issue.

What is the role of government policy in making college affordable? Even though most Californians believe that students have to borrow too much money to pay for college, 72 percent say that Congress should increase the money available for loans.

Most Californians favor proposals that would make higher education more affordable. Asked about specific alternatives, overwhelming majorities favor expanding work-study opportunities (88%), increasing money for scholarships (83%), and establishing a sliding scale for tuition and fees (70%).

When it comes to saving for their children’s college education, 57 percent of parents say they haven’t saved as much as they should have, 30 percent say they are on track, and only 9 percent say they are ahead. Latino parents (63%) are much more likely than white parents (50%) to say they are behind in saving for their children’s college education.

In addition, a significant percentage of parents say they lack information about financial aid. Half (49%) say they do not have enough information, with Latinos (61%) and parents with household incomes of less than $40,000 (63%) much more likely to say so.

Differences Emerge on Equality of Opportunity, Diversity

While a majority of Californians believe that there is a disparity in educational opportunity and that student diversity on the state’s campuses is important, there are significant differences among demographic and political groups on these issues. Majorities of blacks (59%) and Latinos (53%) say racial and ethnic minorities have less opportunity to get a college education; Asians (43%) and whites (32%) are less likely to agree. Democrats (53%) are much more likely than independents (42%) and twice as likely as Republicans (25%) to say that ethnic minorities have less access to a college education.

On the issue of diversity, blacks (72%) and Latinos (67%) are much more likely than Asians (49%) and whites (47%) to say that a racially diverse student body is very important. These differences are less pronounced when it comes to the issue of economic diversity: 67 percent of Latinos, 61 percent of blacks, 51 percent of whites, and 46 percent of Asians agree that economic diversity is very important. However, Democrats (66%) and independents (59%) are far more likely than Republicans (39%) to consider economic diversity very important.

Californians Worried About Cuts But Balk at Tax Hikes With the state facing a multibillion-dollar budget gap, the governor is proposing both spending cuts and tax hikes. In a May PPIC survey, Californians were asked about the tough choices necessary to balance the budget. When it came to the area of spending they most wanted to protect from budget cuts, a strong majority of residents (61%) favored K–12 education, followed by health and human services (17%), and then higher education (12%).

Today, most Californians (83%) are concerned that the budget crisis will lead to significant cuts in funding for higher education, and more than half (54%) say spending for public colleges and universities should be a high or very high priority. Yet more than half (52%) are unwilling to pay higher taxes or to increase student fees (62%) in order to avoid such cuts. However, about half (53%) favor spending more state government money to avoid increasing tuition and fees — even if it means less money for other state programs.

State Leaders Get Poor Grades on Higher Education

Californians express low levels of trust in the way their elected officials are handling higher education. While 40 percent approve of Gov. Schwarzenegger’s overall performance ‒ the same percentage as last month — just 27 percent approve of his handling of higher education. Since October 2007, the governor’s overall approval rating has dropped by 11 points and by 7 points for his handling of higher education.

The legislature has fared worse. It gets an approval rating of just 24 percent for overall job performance (down 9 points since October 2007) and 23 percent approval for its handling of higher education (down 6 points).

More Key Findings:

* Californians take pop quiz on higher education — Page 11
Residents are largely unaware of how funding is divided among public colleges and universities. Just 29 percent correctly name the community college system as being most dependent on state funding, and 27 percent correctly choose the University of California as the least dependent. However, 45 percent correctly name the community colleges as the branch with the most diverse student population.
* Despite cost concerns, most say the price is right for community college tuition — Page 19
When told that community college tuition is $20 per unit, a majority (57%) of residents say this is the right amount, while 23 percent say it is too high and 9 percent say it is too low.
* A look into the future: Most see shortage of educated workers — Page 21
Two in three residents (67%) think that in 20 years the economy will need more college-educated workers than the state can produce.

About the Survey

This is the second PPIC Statewide Survey to focus on higher education. It is part of a series of surveys on education, environment and population issues funded by The William and Flora Hewlett Foundation. This survey seeks to inform policymakers, encourage discussion, and raise public awareness about issues affecting higher education. This is the 92nd PPIC Statewide Survey in a series that has generated a database that includes the responses of more than 196,000 Californians. Findings are based on a telephone survey of 2,503 California adult residents interviewed in English, Spanish, Chinese (Mandarin or Cantonese), Vietnamese, and Korean. They were reached by landline or cell phone throughout the state. Interviews were conducted from October 20 to November 3, 2008. The sampling error for the total sample is ± 2% and larger for subgroups. For more information on methodology, see page 25.

Mark Baldassare is president and CEO of PPIC, where he holds the Arjay and Frances Fearing Miller Chair in Public Policy. He is founder of the PPIC Statewide Survey, which he has directed since 1998.

PPIC is a private, nonprofit organization dedicated to informing and improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett. PPIC does not take or support positions on any ballot measure or on any local, state, or federal legislation, nor does it endorse, support, or oppose any political parties or candidates for public office.

Saturday’s San Francisco Chronicle had an article about a proposal published by UC Berkeley Chancellor Robert Birgeneau last Friday. Birgeneau’s proposal would allow each campus to set its own individual fee level. As the Chronicle article points out, “His idea runs counter to the university’s long-standing policy that all UC campuses should be treated equally in terms of tuition and faculty salaries.”

Birgeneau’s proposal is available at:
http://newscenter.berkeley.edu/chancellor/access/

The Chronicle article is available at:
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/11/22/BANO14A2BH.DTL

CUCFA Vice President Stanton Glantz is quoted extensively in the Chronicle article criticizing Bergeneau’s proposal. Although not explicit in the Chronicle article, this criticism was informed by the Academic Council’s 2007 report “Current Budget Trends and the Future of the University of California,” the most relevant sections of which are pasted below. (The full report is available at:

http://www.universityofcalifornia.edu/senate/reports/AC.Futures.Report.0107.pdf)

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Scenario 4: A Public Funding Freeze

Another downturn in state finances and continued political opposition to tax increases prompts state and University leaders to reluctantly conclude that it would be better to conduct an organized shift away from public funding than to suffer further uncertainty amidst a new cycle of budget crises. They decide to become a “state-assisted university” and to “privatize” centrally and systematically…

Campuses have become responsible for generating major portions of their operating revenue and hence for fundraising activities. Given the very different maturities, program structures, locations, and demographics of campuses that under the Master Plan had been developed as an ensemble, the campuses increasing go their separate ways, find different educational niches, and increasing different levels of quality.

By 2020 the UC system looks much like a large version of the University of Michigan system, the Texas system or the SUNY system: it has two and perhaps three flagship research campuses, and then an uneven assortment of differentiated campuses that range from research I doctoral institutions to state colleges with reduced facilities for students, higher teaching loads for faculty, and reduced knowledge output for the state.

Looking back from 2020, a few educational leaders could be found saying on the record that such scenarios were “plausible.” But these warnings were not enough. No one in California in 2006 wanted to downsize the unparalleled research university system behind one of the world’s great knowledge economies. But then no one in Michigan in 1976 wanted to close most of the factories in one of the world’s great manufacturing economies. In California as in Michigan, it happened one step at a time…

CONCLUSION

The fourth scenario, the Public Funding Freeze, would alter the UC system beyond recognition. This scenario cannot be ruled out. The state continues to carry a structural deficit, remains politically polarized, has expensive needs in health and human services, and awaits new budgetary surprises such as unfunded health care obligations for retired state employees. These problems may encourage some to move UC toward a “high-tuition/high-aid” model in tandem with aggressive private fundraising, increased industry partnerships, and expanded sales and services. This fourth scenario, however, cannot actually be achieved with private fundraising: to obtain the billion dollars that will be lost by comparison with the Compact, and to obtain it in unrestricted payouts, the University would need to raise $25 billion in unrestricted gifts. To reach the 2001-02 funding level, more than $54 billion would be needed. Alternately, tuition increases big enough to fill the gap would shrink and, at the same time, reduce the quality of the university’s student body. The overall UC system would continue in name but not in reality, as the most prestigious campuses draw on a national student pool and collect large amounts of non-resident tuition while other campuses struggle with diminished resources, fewer programs, and reduced research capacity. Wasteful intercampus competition may arise, in part in the form of the budgetary fragmentation that the Master Plan had in its time brought to a close. Since undergraduate instruction is disproportionately dependent on the state General Fund, such changes would seriously damage the assumption of a high-quality curricula for all qualified students. The Public Funding Freeze would end the UC system as we know it.

Ian Kennedy, Chair of the DFA, and Steve Kowalcyzkowski, DFA member, met for about 50 minutes on Monday with the faculty sub-committee of the Chancellor Search advisory committee. The results of the DFA web survey were presented and explained. The main points that were included in the DFA letter to the search committee were reiterated. The committee was receptive to our concerns and our suggestions.