Davis Faculty Association

Archive for the ‘Financing Higher Ed’ Category

News and Updates from the DFA, June 10, 2017

Prepared on behalf of the DFA Board by Joe Kiskis and Eric Hays.

 

Topics:
State Budget negotiations: UCOP budget may be separated from the rest of UC funding
UCOP independent investigator selected
Regents appointments
What’s the Problem at UC? by Dan Mitchell

 

STATE BUDGET NEGOTIATIONS: UCOP BUDGET MAY BE SEPARATED FROM THE REST OF UC FUNDING

The state budget should be finalized next week. We are hearing that state funding of UCOP may be separated from the rest of UC’s budget, as suggested by the recent State Auditor’s report. See this Sacramento Bee article.

 

UCOP INDEPENDENT INVESTIGATOR SELECTED

You will likely recall that in the State audit of UCOP, UCOP was accused of inappropriate interference with campus survey responses. This was a fairly serious charge. It was previously reported that the Regents decided to hire an independent investigator to determine the facts of the incident. Regents Chair Lozano has now announced the selection.

“The University of California Board of Regents has retained former California Supreme Court Justice Carlos R. Moreno and the law firm of Hueston Hennigan LLP, to conduct a fact-finding review of actions undertaken by the Office of the President with respect to surveys the California state auditor sent to UC campuses as part of the recent audit of the Office of the President.”

 

REGENTS APPOINTMENTS

Governor Brown has nominated four new people to serve as UC Regents. Official announcement:

Maria Anguiano is currently a financial officer at the Minerva Project Inc., a rather unconventional, for profit, undergraduate educational institution. She has previously worked at UCOP and UC Riverside. Because of her role in the pilot of Activity Based Costing (ABC) at UCR, she is a controversial nominee. The Governor has been a strong promoter of this pilot at UCR and the smaller associated ABC pilot at UC Davis.

Howard “Peter” Guber has had a career in the entertainment industry in Los Angeles. He is currently chairman and chief executive officer at Mandalay Entertainment Group and co-owner of professional sports teams including the Golden State Warriors.

Lark Park is Governor Brown’s senior advisor for policy. She has had numerous positions in California state government.

Ellen Tauscher is a strategic advisor at Baker, Donelson, Bearman, Caldwell and Berkowitz, which is a large law firm and lobbying group. It was founded by James F. Baker whose son was a US Representative and whose grandson was Howard Baker, Jr., who was US Senate Majority Leaderand Chief of Staff for President Ronald Reagan. She is also chair of the Governor’s Military Council. If you’re like me, you didn’t even know that the Governor had a military council. See http://militarycouncil.ca.gov. She has also been undersecretary of state for arms control and a Representative in Congress for California’s 10th District, which includes Modesto.

Thus Governor Brown continues his quest to reshape the University. Starting in 2014, Brown has made six appointments to the board that do not follow the tradition of selecting most Regents from the upper layers of California business. In this group, only Guber is a person I would call a traditional choice. The positive side of this is that it has brought a welcome diversity of background and perspective to the board. This is evident in discussions at Regents meetings. The downside is that not much has been done to add people with strong experience in and orientation to the academic core of higher education. Also some of these appointments are perhaps a bit too closely associated with Brown and some of his favorite projects, e.g. Anguiano and Park in this group.

Regents nominees must be confirmed by the State Senate within one year of their nomination. In the meantime, they can serve on the board. Before the Senate floor vote, the Senate Rules Committee holds a hearing on the nominees.

 

WHAT’S THE PROBLEM AT UC? BY DAN MITCHELL

Dan Mitchell, who is Professor Emeritus at UCLA in the Anderson School of Management and the School of Public Affairs, has a nice article that adds historical context to the issues above and others we currently face at the University.

News and Updates for June 2, 2017

Prepared on behalf of the DFA Board by Joe Kiskis.

FLASH: four new Regents appointed today, June 2. See next edition for comments.

Topics in this news update:
Davis Faculty Association membership building
Phil Kass to Vice Provost Academic Affairs
L&S Deans office reorganization and open positions
Senate Chair Chalfant’s comments at May Regents meeting
Regents actions at May meeting Changes to Lecture with Security of
Employment series Changes to UC Retirement Savings Program fees
Davis Division Senate budget letter
May revise of Governor’s budget
Systemwide Senate salary letter

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DAVIS FACULTY ASSOCIATION MEMBERSHIP BUILDING

The Board of the Davis Faculty Association encourages each member to
recruit one new member. That would greatly improve our ability to
function effectively. It is now possible to join online.

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PHIL KASS TO VICE PROVOST ACADEMIC AFFAIRS

Professor Phil Kass will take over as Vice Provost of Academic Affairs,
succeeding the retiring Maureen Stanton, effective July 1.

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L&S DEANS OFFICE REORGANIZATION AND OPEN POSITIONS

Dean Elizabeth Spiller, has written to the College of Letters and Science commenting on the appointments of six Associate Deans and an Executive Dean.

Associate Dean of the Faculty in the Humanities, Arts and Cultural Studies
Associate Dean of the Faculty in the Mathematical and Physical Sciences
Associate Dean of the Faculty in the Social Sciences
Associate Dean, Academic Senate Liaison, Undergraduate Education and Advising
Associate Dean, Undergraduate Programs and Planning
Associate Dean, Research and Graduate Programs
Executive Assistant Dean, Finance and Administration

This does not mean a net increase of seven positions, but I’m uncertain about what the correct net increase is.

There will be internal searches for the second, fifth, and sixth of these. The others have been filled.

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SENATE CHAIR CHALFANT’S COMMENTS AT MAY REGENTS MEETING

Academic Senate Chair Jim Chalfant provided remarks to the University of California Board of Regents May 2017 with pointed comments on perceptions of UC vs. reality, the audit of UCOP, and other items.  Video and pdf.

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REGENTS ACTIONS AT MAY MEETING

The full Board, meeting on May 18, approved three actions. Two were UCOP budgets for 2017-18, and the other is the much-discussed non-resident cap. For more detail, see:
http://regents.universityofcalifornia.edu/aar/mayb.pdf
or for even more detail, see the agenda items here:
http://regents.universityofcalifornia.edu/meetings/agendas/may17.html

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CHANGES TO LECTURER WITH SECURITY OF EMPLOYMENT SERIES

The Office of the President is now formally proposing changes to the Lecturer with Security of Employment (LSOE) series. This topic has been discussed less formally for the last couple of years with a variety of opinions expressed. Recall that faculty in this series are Senate members. Perhaps the most visible change would be to rename the title to “Teaching Professor.” Another significant change will be that a new Teaching Professor step system will be developed that is closer to that used in the Professorial series. Scholarly achievement is added to the advancement criteria.

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CHANGES TO UC RETIREMENT SAVINGS PROGRAM FEES

If you have investments in the UC Retirement Savings Program and read all of your email very carefully, you will have noticed a change in the fee structure for the Retirement Savings Funds. The administrative fees (as opposed to the investment management fees) are now being charged as a flat rate of $35/year per person. This change is disadvantageous to investors with relatively small balances and advantageous to investors with larger balances. The detailed rationale for why this change is overall advantageous is unavailable.

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DAVIS DIVISION SENATE BUDGET LETTER

The Davis Division of the Academic Senate has a letter critical of both the process leading to and the content of the budget framework letter for 2017-18 from the Interim Chancellor and the Interim Provost.

Budget Framework letter

Senate Budget Letter

And there is now a response to the Senate letter from Chancellor-Designate May and Interim Chancellor Hexter

Basically these letters reveal the stresses in attempting to address the ongoing deficit in the campus core funds budget. It will be very difficult to reverse the decrease in educational quality that has resulted from the substantial increase in students that has been made made without the necessary corresponding investment in faculty and facilities.

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MAY REVISE OF THE GOVERNOR’S BUDGET

Overall the Governor’s May budget revise contained no major changes for the University. The modest base budget increase per the budget agreement between the Governor and University President is maintained. However, the May revise states “In response to the State Auditor’s review of the UC Office of the President, the May Revision sequesters $50 million in UC funding until such time that the Auditor’s recommendations and other UC commitments are implemented.” The other commitments refer to follow through on piloting activity-based costing (lack of progress at UC Davis is specifically mentioned) and in meeting transfer student goals at a few campuses.

The Regents action to increase tuition by 2.5% increases the State’s Cal Grant cost. As a consequence of that, the Governor is redirecting $4M from the University budget to Cal Grants for students attending private California institutions. The logic of this change is a bit obscure.

The May revise also contains a statement about out years. “Rising Cal Grant costs from tuition hikes will also limit the state’s ability to increase General Fund support in the future. The state has increased General Fund spending by at least 4 percent annually since 2012-while tuition has been flat. Going forward, the universities should plan for 3-percent growth annually beginning in 2018-19. If the universities raise tuition in the future, additional downward adjustments to state support may be needed to cover the higher Cal Grant costs.”

During the next few weeks, the legislature will be working to pass a budget for 2017-18. The Legislative Analyst’s Office (LAO) recommends that the legislature adopt the Governor’s May revise changes. Nevertheless it is always possible that there will be significant changes before a final budget is passed and signed.

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SYSTEMWIDE SENATE SALARY LETTER

Basically the letter expresses a Senate preference for applying funds available to faculty salary increases to the base salary scales rather than splitting them between the base scales and addressing other targeted concerns such as equity, inversion, and compression. The targeted issues could be addressed with campus funds.

Starving the Beast, the March for Science, and Nationwide May 1 Actions

Dear Davis Faculty Association Colleagues,

Thanks to the many of you who came out to watch the film Starving the Beast and meet with filmmaker Steven Mims. I think we would all agree it is a valuable and well-made film. The Davis Humanities Institute reviewed the event for their recent newsletter.

If you missed the film screening, we may be able to accommodate a smaller screening. Contact the DFA if you are interested.

On another note, this Saturday April 22 is the National March for Science. The Davis Faculty Association is a co-sponsor of the Sacramento March for Science, and you can find more information on this link. Hope to see some of you there:

Finally, there is a national day of action planned for May 1 of this year initiated by numerous labor, social justice, and immigrant organizations. There is a call for university participation in support of these actions.

Feel free to forward this information to others you may know who are not currently DFA members.

Have a fun and safe Picnic Day!

Jesse Drew and Richard Scalettar
Co-Chairs of the Davis Faculty Association

News and Updates

Prepared on behalf of the DFA Board by Joe Kiskis.

As a service to Davis Faculty Association members, this informal newsletter will be emailed to members several times a year as developments warrant. The goal is to draw attention to items of likely interest related to UC Davis, the University of California, or higher education more generally.

The Davis Faculty Association is affiliated with the Council of UC Faculty Associations (CUCFA) and with the American Association of University Professors (AAUP)

==============================

Starving the beast

4:30pm, Thursday, April 13
Art Annex main room

“The DFA is hosting a screening of STARVING THE BEAST followed by a talk by that film’s director, Steve Mims, on the current situation confronting public universities. “Starving the Beast” is a documentary about the crises in education that has been receiving acclaim around the US and has served to create community conversations about the way forward. The film will show on campus on Thursday, April 13 at 4:30 PM in the Art Annex main room.

“About the film: STARVING THE BEAST examines the on-going power struggle on college campuses across the nation as political and market-oriented forces push to disrupt and reform America’s public universities. The film documents a philosophical shift that seeks to reframe public higher education as a ‘value proposition’ to be borne by the beneficiary of a college degree rather than as a ‘public good’ for society.”

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DFA Statement on Betsy DeVos Nomination

Jan. 26, 2017

“The nomination of Betsy DeVos as Secretary of Education raises alarms that the new administration will fail to support college access and affordability for millions of current and future college students. Her nomination signals a blatant disregard for not only the magnitude of college debt plaguing our students but also the widespread fraud that has been exposed in the for-profit sector across the country. It also reveals an irresponsible resistance to protecting students from sexual assault, gun violence, ensuring the rights of immigrants, and students with disabilities. […]”

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UC Davis: New Chancellor and L&S Dean

Likely you are all well-informed about the recent announcements of a new Chancellor for our campus and a new Dean for a restructured and, to some extent, reunified College of Letters and Science.

Chancellor-designate Gary May

Dean Elizabeth Spiller

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Video of the “Future of the University” Chris Newfield’s presentation 

on 2/1/2017 at Berkeley

Professor Christopher Newfield, UC Santa Barbara, speaking on The future of the public University. His February 1, 2017, talk is based on his recent book “The Great Mistake: How We Wrecked Public Universities and How We Can Fix Them.”

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CUCFA President Stan Glantz met with UC President Janet Napolitano on Feb. 7, 2017.

They discussed the “$48 Fix” and the CUCFA letter to President Napolitano about President Trump’s Executive Order (see item below).

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CUCFA Letter to President Napolitano about President Trump’s Executive Order

Feb. 7, 2017

“Dear President Napolitano,

“We applaud your clear denunciation of President Trump’s executive order restricting the ability of individuals from certain countries to re-enter the US as ‘contrary to the values we hold dear as leaders of the University of California.’ We also applaud the reaffirmation of UCOP’s commitment ‘to support all members of the UC community who are impacted by this executive action.” We see this as a natural and necessary extension of your November 30 statement committing UC to “vigorously protect the privacy and civil rights of the undocumented members of the UC community and will direct its police departments not to undertake joint efforts with any government agencies to enforce federal immigration law.’ […]”

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CUCFA Support for SB-201 allowing UC GSRs to unionize

Feb. 21, 2017

“Re: UC Faculty Support SB-201 (Skinner)

“Dear Senator Skinner,

“We of the Council of UC Faculty Associations (CUCFA) wish to alert you to the fact that many faculty support SB 201 (Skinner), which would allow UC’s Graduate Student Researchers (GSRs) to unionize. We affirm the right of all employees to organize and we also affirm the importance of Graduate Student Researchers helping to shape the contract stipulating conditions of their work. […]”

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Creating a Debt Free College Program

January 2017

Legislative Analyst’s Office report considers design and cost of a “Debt Free College” Program.

“The Supplemental Report of the 2016-17 Budget Act directs our office to provide the Legislature with options for creating a new state financial aid program intended to eliminate the need for students to take on college debt. The reporting language envisions a program under which the state covers all remaining college costs (tuition and living expenses) after taking into account available federal grants, an expected parent contribution, and an expected student contribution from work earnings. Though not specified in the reporting language, our understanding of the intent is for the program to focus on resident undergraduate students attending public colleges in California.”

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Political Litmus Tests Have No Place in Higher Ed

The following statement was released Feb. 24,2017 by Rudy Fichtenbaum, AAUP president, and Hank Reichman, AAUP first vice-president and chair of Committee A on Academic Freedom.

“Shortly after the 2016 election, the AAUP warned that we could be facing the greatest threat to academic freedom since the McCarthy period. It now appears that such a warning was not misplaced. Extremists in the administration, Congress, and several state houses have created an atmosphere in which “alternative facts” reign supreme, and which encourages the introduction of legislation that threatens the core principles of our democracy.

“The latest examples of extreme legislation come from Iowa and North Carolina. In Iowa, a bill has been introduced that would prohibit the hiring of a professor or instructor at a public university or college if his or her most recent party affiliation would “cause the percentage of the faculty belonging to one political party to exceed by 10 percent” the percentage of the faculty belonging to the other dominant party.

“In North Carolina, legislation (since tabled) was introduced that would require tenure-track and tenured faculty members to “reflect the ideological balance of the citizens of the state,” so that no campus “shall have a faculty ideological balance of greater or less than 2 percent of the ideological balance” of North Carolinians. […]”

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Remaking the University: Higher Education after the Inauguration
Feb. 27, 2017
Michael Meranze

“The month since the inauguration has made it crystal clear that universities and colleges are going to face a wide range of challenges and attacks in the next few years. […]

“It is important to recognize one thing as we contend with this new era: the now traditional tendency of colleges and universities to mirror and incorporate the leading trends of the contemporary business and financial order will not protect its core functions of teaching and research. […]

“Colleges and universities will have to confront more directly their own role in the increasing inequality of American society. […]

“A new social contract that preserves access, funds quality, and ensures academic and intellectual autonomy must be developed and fought for. […]

“Until, and unless, higher education can reclaim a social purpose beyond return on investment it will be blow in the wind in the face of the challenges of the present moment.”

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UC Structural budget issues: State funding short-fall, tuition increases, and non-resident enrollment.

Although the California budget and UC budget discussions are relatively low-key this year, there remain fundamental, unsolved structural problems. One manifestation of these appeared in the UC Davis 2020 Update reported upon in our previous newsletter. The State insists that UC enroll more California undergraduates, while it refuses to fund them and works to limit both non-resident enrollment and resident tuition. The implication is that UC quality is not among the State’s highest priorities. Recent statements from the Systemwide Senate leadership take the opposite tack of putting funding, whatever its source, first.

Academic Senate Chair Jim Chalfant Remarks to the University of California Board of Regents January 2017

Academic Senate Chair Jim Chalfant Remarks to the University ofCalifornia Board of Regents September 2016

Thus the Regents, the Office of the President, and the Senate are each in their own way inside-the-box enablers of the State’s addictive habit of underfunding of the University. For an alternative, see The $48 Fix.

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Regents Agenda Item B4 for Thursday, Mar. 16, 2017 ESTABLISHMENT OF POLICY ON NONRESIDENT STUDENT ENROLLMENT

“The President of the University recommends that the Regents adopt the following Policy on Nonresident Student Enrollment, effective beginning with the fall 2017 entering class:

[…]

“3. Nonresident undergraduates will continue to be enrolled in addition to, rather than in place of, funded California undergraduates at each campus. That is, campuses wishing to increase nonresident enrollment may not reduce enrollment of funded California students to accommodate this growth.

“4. For the University of California system as a whole, and at every campus that currently enrolls less than twenty percent of its undergraduates from outside California, California residents shall continue to represent a minimum of eighty percent of all undergraduate students.

“5. For individual campuses whose nonresident undergraduate enrollment (including new freshman and transfer students and continuing students) in academic year 2016-17 exceeds twenty percent of total undergraduate enrollment, the proportion of nonresident undergraduates enrolled in the future may not exceed the proportion in 2016-17. On these campuses, any growth in the number of nonresident undergraduates enrolled will be accompanied by, at minimum, a proportionate increase in enrollment of California resident undergraduates.”

[…]

LA Times
UC proposes its first enrollment cap – 20% – on out-of-state students

“Last year, lawmakers threatened to hold back $18.5 million if the public university system did not put a cap on students from outside California. On Monday, UC finally acted, proposing a 20% systemwide limit on nonresident undergraduate enrollment and vowing to continue to give Californians top priority. Nonresident students numbered 34,673 in fall 2016, 16.5% of the system’s 210,170 undergraduates. The limit would be the first of its kind for the 10-campus public research university. But UC officials hope it will be enough to get state officials to release the funds. […]

“Faculty members are not enthusiastic, said UC Academic Senate Chairman James Chalfant. They oppose an ‘arbitrary quota,’ he said, that could force UC to turn away the best and the brightest and forgo additional needed dollars. The group has presented an alternative that would impose enrollment limits only on campuses at which the expansion of nonresident students hurts Californians and only after UC is given enough funding to maintain its quality.

“‘We do understand why this is happening,’ Chalfant said. ‘But we’re disappointed because we think the conversation should be about how those [nonresident] revenues benefit all students, rather than some fixed number.’ […]

“Under the proposal, which the UC Board of Regents will consider next week, the system’s three most popular campuses would be allowed to keep but not increase their proportions of nonresident undergraduates – 24.4% at UC Berkeley, 22.9% at UC San Diego and 22.8% at UCLA, Klein said. The proportion of nonresident students at the other campuses ranges from 18.9% at UC Irvine to less than 1% at UC Merced. Those campuses each would be allowed to grow up to 20% so long as the systemwide limit was not exceeded, Klein said.”

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Inside Higher Education

Could Trump Cut Berkeley’s Funds?
Feb. 3, 2017

“Experts said they don’t think the president has the authority to do so.”

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Chronicle of Higher Education
U. of California Leader Advises Patience as the Trump Era Dawns
Mar. 2, 1017

“President Trump ‘can tweet, but Congress needs to act, and those are very different things,’ [President Napolitano] said. ‘Just reiterating that message over and over again is important.’ “

“Starving the Beast” Screening and Director’s Talk

The DFA is hosting a screening of STARVING THE BEAST followed by a talk by that film’s director, Steve Mims, on the current situation confronting public universities. “Starving the Beast” is a documentary about the crises in education that has been receiving acclaim around the US and has served to create community conversations about the way forward. The film will show on campus on Thursday, April 13 at 4:30 PM in the Art Annex main room.

About the film: STARVING THE BEAST examines the on-going power struggle on college campuses across the nation as political and market-oriented forces push to disrupt and reform America’s public universities. The film documents a philosophical shift that seeks to reframe public higher education as a ‘value proposition’ to be borne by the beneficiary of a college degree rather than as a ‘public good’ for society. Financial winners and losers emerge in a struggle poised to profoundly change public higher education. The film focuses on dramas playing out at the University of Wisconsin, University of Virginia, University of North Carolina, Louisiana State University, University of Texas and Texas A&M.

The $48 fix: Reclaiming California’s Master Plan for Higher Education

On Thursday, January 26, the UC Regents will consider and likely approve their budget for the University for 2017-2018. It and the Governor’s budget, to which it is closely tied, perpetuate decades of failed privatization and persistent under funding of the University and of public higher education more generally. At UC and as compared to both 1990-1991 and 2000-2001, total per student expenditures for instruction and the State general fund contribution to per student instruction are sharply down while the inflation-adjusted contributions from students through tuition and fees are 70% higher than they were in 2000-2001 and 135% higher than they were in 1990-1991. Students and their families are paying more and getting less.

It has become conventional “wisdom” that this continuing decline is inevitable and that viable alternatives do not exist.

The report The $48 fix: Reclaiming California’s MASTER PLAN for Higher Education demonstrates that there is an affordable alternative that restores public higher education in California.

“It turns out that keeping the full promise of the Master Plan-returning the state’s investment per CSU and UC student to 2000 levels (inflation-adjusted); eliminating tuition and fees for all in-state UC, CSU and CCC students; and funding seats for qualified California high-school graduates now refused access to the system-is affordable.”

“California’s two-decade experiment in privatizing higher education has failed, as it has failed in the rest of the country. Top-quality, accessible and appropriate higher education that affords opportunity to all California students has been replaced with a system that restricts access, costs students more and compromises educational quality. Exploding student debt constricts students’ futures and harms the economy as a whole. It is entirely feasible to reinstate California’s proven success in public higher education. Several reasonable funding options can be mixed and matched to make the costs remarkably low for almost all California families. Our state has the means and the opportunity. Will we recover our political will and vision?”

This report was produced by the Reclaim California Higher Education coalition, which includes the Council of University of California Faculty Associations and other organizations dedicated to affordable, accessible, and excellent public higher education in California.

Meet your legislators

Bill Dodd currently represents the Davis area in the state Assembly, and Mariko Yamada was his immediate predecessor in that role. Both have volunteered to speak to DFA members about their experiences in the state Assembly, attitudes of legislators about UC, and about what state legislators can do to help UC. Both Dodd and Yamada are running for a state Senate seat in a race one of them will likely win, so it is important we let them know what our concerns are.

We have created an open Google Doc where people can brainstorm possible questions/ topics for discussion at: bit.ly/1StKYgH. We welcome your submissions.

Meet Bill Dodd, April 22nd at noon, in Sproul Hall room 912.
Meet Mariko Yamada, April 29th at noon, in Sproul Hall room 912.

Chris Newfield’s talk on Feb 8 at 3 pm at Student Community Center

The Provost’s Forums on the Public University and the Social Good

Monday, February 8, 2016

The Great Mistake: How Private-Sector Models Damage Public Universities and How They Can Recover

Christopher Newfield
Professor of Literature and American Studies – University of California, Santa Barbara

Lecture:
3 to 4:30 p.m.
Multipurpose Room, Student Community Center

Reception:
4:30 to 5:30 p.m.
Multipurpose Room – Patio, Student Community Center

Christopher Newfield is professor of literature and American studies at the University of California, Santa Barbara, where he spent many years involved in academic planning and budget for the UCSB and UC-systemwide senate. Much of his research is in Critical University Studies, which links his enduring concern with humanities teaching to the study of how higher education continues to be reshaped by industry and other economic forces. His most recent books on this subject are Unmaking the Public University: The Forty Year Assault on the Middle Class (2008), and Ivy and Industry: Business and the Making of the American University , 1880 — 1980 (2003). He has recently completed a new book on the post-2008 struggles of public universities to rebuild their social missions for contemporary society, to appear with Johns Hopkins University Press this fall. He blogs on higher education funding and policy at Remaking the University (http://utotherescue.blogspot.com), and writes for the Huffington Post, Inside Higher Ed, and the Chronicle of Higher Education.

Professor Newfield will discuss how nearly all public universities now accept the conventional wisdom that the era of public funding is over. This is thought to mean that universities must commercialize, marketize, financialize, and economize. This “new normal” has polarized observers: most senior officials assert that higher tuition, continuous fundraising, corporate partnerships, and sports enterprise support the public mission; faculty critics say the university will then no longer support independent thought. But both positions assume that private-sector changes will make universities more efficient. On this point, both positions are wrong: private sector “reforms” are not the cure for the college cost disease, for they are the college cost disease. This lecture offers an overview of how privatizing public colleges has made them more expensive for students while lowering their educational value, and will outline more-productive policy directions.

FA statement to the UC Regents about proposed new UCRS tier

Professor Celeste Langan spoke on behalf of the UC Faculty Associations at the July 22, 2015 UC Regents meeting during the public comment period. Below is a copy of her full comments:


 

As co-Chair of the Berkeley Faculty Association and on behalf of the Council of UC Faculty Associations, I wish to address the Regents concerning the third discussion item of the Finance Committee agenda, item F3, “Update on Final 2015-16 Budget.” The update, produced by the Office of the President, misleadingly claims that the final budget “incorporates the funding framework developed by UC and the Governor.” If you’ll recall, the “framework” of the May Revise proposed that the state make a contribution of $436 million toward the unfunded liability of the UC Retirement Plan. The final budget, however, promises only a “one-time payment” of $96 million; there is nothing in the budget that commits the state to two additional payments of $170 million. Yet even this meager one-time payment is contingent upon Regential approval of a cap on pensionable salary consistent with PEPRA (Public Employee Pension Reform Act) for employees hired after July 1, 2016.

The Council of UC Faculty Associations is opposed to the University making permanent changes in the structure of its retirement plan in exchange for a very modest one-time contribution from the State. We are especially opposed to the introduction of a full defined-contribution option. There is absolutely no justification for the proposed introduction of a full defined-contribution option; neither the Legislature nor the Governor called for the introduction of a Defined Contributions plan in aligning the UCRP with PEPRA. Yet UCOP seems bent on introducing such an option, to the point that their statement exposes their intention as a foregone conclusion rather than a possible outcome of consultation and deliberation — those elements of what we once understood as “shared governance.”

I call your attention to the third paragraph on page 3 of the F3 agenda item. First OP declares, “The President will convene a retirement options task force to advise on the design of new retirement options that will include the pensionable salary cap consistent with PEPRA. The retirement options will be brought to the Regents next year for review and approval.” But apparently the “design of new retirement options” is a fait accompli, for the penultimate sentence of that paragraph declares, “new employees will have the opportunity to choose a fully defined contribution plan as a retirement option, as an alternative to the PEPRA-capped defined benefit plan.”

Since the two minutes allotted in the public comments session is the temporal equivalent of Twitter’s 140 characters, let me ask: #What’s up with UCOP? If I had to speculate, I’d say that UCOP’s attempt to replace Defined Benefits with Defined Contributions suggests its preference for a mobile, “flexible,” precarious professoriate with a consequently short-term institutional memory — a professoriate that wouldn’t recall that only 6 years ago, the relative merits of defined contribution versus defined benefit plans were thoroughly, carefully, and widely discussed by UC constituents. Given substantial evidence that defined benefits are more cost-efficient than defined contributions in achieving the same level of benefits, it was agreed that the University of California was best served by continuing with UCRP as a defined benefit plan. Thus in 2010, when the President recommended and the Regents endorsed pension reforms, UCRP was preserved as a defined benefit plan.

Ironically, the paragraph in question concludes, “For represented groups, retirement options will be subject to collective bargaining.” Well, the UC Faculty Associations represent a good number of those faculty, members of the Academic Senate, without collective bargaining rights, and we say that UCOP has vitiated the interests of that faculty, both those vested in the current UCRP and those who will be hired after 2016. We deplore the introduction of a different tier of faculty benefits, but we firmly oppose the attempt of UCOP to introduce a fully defined contribution plan in this untoward and unjustified manner.

Comments on the final 2015-16 state budget

By Joe Kiskis

This note makes a few comments on the final UC budget for 2015-2016 and then focuses on points related to the UC Pension Plan (UCRP). To some extent, it updates previous comments here by including changes since then and information that was not available then.

The 2015-16 UC Budget and UCRP

To get good information on the budget, one must read both AB 93 and SB 97. The process this year was a little convoluted. On June 15, the legislature passed AB 93, the Budget Act of 2015. This was the Legislature’s version of the budget and was passed on that day so as to meet the constitutional deadline. It was done before the Legislature and Governor had come to agreement. Their agreement was announced the next day. To account for that and other small items in the following days, SB 97 was passed on June 19. It makes many significant amendments to AB 93, including a number relevant to UC. Both AB 93 and SB 97 were signed by the Governor. However the Governor exercised his line item veto authority in a few minor ways that are not relevant to UC. To get complete information, there are, as usual, trailer bills to read. One of those, SB 81, has a few parts relevant to UC—most significantly concerning the Middle Class Scholarship Program.

The main features of the UC budget concerning tuition and the base budget came out as expected and as have been widely reported. However, it’s worth noting that the final language on these points is less proscriptive than in the original version and that what is expected to happen in the out years is just that—an expectation that is not mandated in this budget. Briefly, per the Regents decision of May 2015, tuition for California resident students is to remain constant for two more years. Following that, modest increases comparable to the rate of inflation are possible. On the other hand, for non-resident students, tuition will likely increase by 8% in each of the next two years. System-wide Student Services fees (as opposed to tuition) are allowed to go up 5% ($48).  The increase in the 2015-16 UC base budget is the same as the Governor originally proposed, i.e. 4% or $119.5M. The expectation is that 4% increases will continue through 2018-2019.

There was an expectation that the Legislature would augment the Governor’s budget with funding for enrollment growth and that the Governor would not line-item veto it. This did not turn out as well as was hoped. The amount is only $25M, and it is contingent on UC adding 5,000 resident undergrads by 2016-17. This is a short timeline, and the amount is far below that needed to educate 5,000 students for one year. On a per student basis, it is also substantially below the average State contribution to the cost of education.

Earlier versions of the budget had limits on nonresident enrollment. Those did not make it into the final budget.

In the trailer bill, the eligibility requirements for the Middle Class Scholarships have been raised and the funding for the program has been decreased.

UC Retirement Plan (UCRP)

As it turned out, there is a large discrepancy between the language related to UCRP in the publicized agreement from the Committee of Two (or equivalently in the Governor’s May Revise statement) and that which actually appeared in the final budget product.

The original claim was that there would be a one-time payment of $436M spread over three years ($96M in the first year) to pay off a small fraction of the UCRP unfunded liability. In return the University agreed to make a permanent change to UCRP by adding another tier that would apply to new employees. In this new tier, UCRP eligible salaries were to be capped at the inflation indexed PEPRA/Social Security limit ($117k for the current year) rather than at the IRS limit of $265k currently used by UCRP. Employees in the new tier would have the option of either a defined benefit plan with the new cap in combination with a supplemental defined contribution part or a defined contribution plan with no defined benefit portion. The second option of a straight defined contribution (DC) plan is most troublesome. Fortunately, no language describing such options was incorporated into the budget bills signed by the Governor.

The Governor’s May Revise letter to the Legislature suggested budget bill language. This suggested language said only that UC would get a one year addition of $96M in exchange for making UCRP consistent with the PEPRA cap. It said nothing about how that should be done. It made no mention of $436M, no mention of a DC supplement, and certainly no mention of a DC only option. This recommendation was followed, and the language that the Governor suggested is essentially that of the budget bills. However, to drive home the point that there is no larger deal, the amended version of the budget adds:

“This appropriation does not constitute an obligation on behalf of the state to appropriate any additional funds in subsequent years for any costs of the University of California Retirement Plan.” (SB 97, p. 96)

Thus neither the Governor nor the Legislature are pressuring the University to introduce a straight DC option. The DC option is something introduced (most likely by UCOP) during discussions in the Committee of Two but done without appropriate consultation within the University. Nevertheless, the Office of the President intends to pursue the possibility of a DC only option. In the discussions that will take place in the coming months, it is worth keeping in mind that a DC option appears to be primarily a priority of UCOP and not of the Legislature or the Governor. Note also that the relative merits of defined contribution verses defined benefit plans were thoroughly, carefully, and widely discussed in the University about six years ago. The conclusion was that the excellence of the University was best served by continuing with UCRP as a defined benefit plan. Thus in 2010, when the President recommended and the Regents endorsed pension reforms, UCRP was preserved as a defined benefit plan.

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