The New Tax Initiative and UC Funding

There have been a few big changes on the tax initiative front the last few days. As many of you might know, a deal has been made to combine the Millionaire�s Tax and the Governor�s tax initiative. I will list the details of the new initiative below, and in many ways, it is an improvement over the governor's initial proposal, but unlike the Millionaire's Tax, it does not dedicate revenue for higher education. So we are currently meeting with legislators to put new language into the state budget to dedicate funds to higher ed. It is important to stress that we were told by legislators that even if the Millionaire's Tax provided money for higher ed, the legislature would still have to reduce higher ed funding to balance the budget, so we think the new initiative might turn out to be better for the UC system. We will now have to work together to push the legislature and the governor to re-fund higher ed.

We met with the governor�s budget people and several legislators on March 19th to push for budget language that would increase transparency and funding for the UC system. If all goes well, tuition will be frozen for three years, and the state will increase its contribution to the UC system by at least 4% each year.

Here�s a description of the new initiative:

1. PERSONAL INCOME TAX:
a. 1% increase on incomes of $250,000 ($500,000 for couples). No change from Governor�s initiative.
b. 2% increase on incomes of $300,000 ($600,000 for couples). Governor�s initiative was 1.5%.
c. 3% increase on incomes of $500,000 ($1 million for couples). Governor�s initiative was 2%.
d. These tax increases remain in place for 7 years. Governor�s initiative was 5 years.
2. SALES TAX: increase � cent (Governor�s was � cent). Same expiration as the Governor�s.
3. STRUCTURE: The measure will be based on the Governor�s initiative structure, with the changes noted in #1 and #2 above.
4. REVENUES (NOTE: THESE ESTIMATES ARE PRELIMINARY): This new measure will generate about $9 billion for the 2012-13 budget (up from the $6.9 billion in the Governor�s initiative).

Also, there will be additional comments in statements from the principals about re-investing in higher education as a priority. (Not to mention the fact that the new measure will generate higher revenues.)

We need to pressure the legislature and governor to dedicate funds to higher education in the May Revise budget.

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Off-Scale Salaries and the Privatization of the University

While most studies of university compensation look at average salaries, I have stressed that we need to examine wage inequalities. For instance, in the case of UC senate faculty, we have seen a growing disparity between the top earners and everyone else. A recent study of faculty compensation helps us to see that a major cause for this increased disparity is the use of off-scale salaries, which are usually negotiated between an administrator and an individual faculty member. This privatizing system not only creates a system of competing free agents, but it also decreases transparency by circumventing the peer review process.

The Academic Council�s report shows how the use of off-scale salaries varies from campus to campus; here is the percentage of professors with off-scale salaries on each campus: Merced 88%; UCLA 80%; Santa Cruz 73%; Berkeley 72%; Irvine 66%; Santa Barbara 66%; San Diego 64%; Riverside 59%; and Davis 52%. The fact that Merced is so high could point to the recent move to hire most professors off scale. Currently, in the system, �91% of assistant professors are hired off-scale, 94% of associate professors, and 80% of full professors. On average, 89% of new hires were off-scale.�

While some argue that this need for off-scale salaries is due to the faulty nature of the current professorial salary scale, others believe that by keeping the scale low, administrators and individual faculty members are able to justify making secret, private deals. In response to these issues, the Academic Council wants to create a new system, which would: �Maintain funding for merit actions based on existing merit and CAP review processes, such that faculty who advance to a new rank and/or step receive a new salary at least equal to the average of campus colleagues at the same rank and step.� Thus, instead of relying on off-scale salary negotiations, this new system would combine the current merit system with a new way of making sure that all faculty of the same rank would have similar salaries.

The major problem with this good proposal is that it is hard to imagine faculty members and administrators moving away from a system of private negotiations. Like the general economy, everyone thinks they are going to be the exception, so no one wants a more equal system. In other words, even the people who do not receive star salaries believe in the star system because they imagine that someday they will also be stars. So if this new compensation structure did go in effect, what would probably happen is that a majority of faculty would still receive off-scale increases, which would result in raising the average salaries for each rank, while still maintaining the large disparities within ranks and between campuses. The only way to change this system is to simply update the salary scale and get rid of most off-scale negotiations.

At the center of this question of compensation are the debates over equality versus individualism and public versus private. While many faculty members insist that they want to keep the university public, and they believe in pursuing social and economic equality, everything in the system is moving towards a more unequal and privatized structure.

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March 5th Occupy the Capitol Recap

March 5th brought thousands of students, teachers, labor activists, and occupiers to Sacramento to protest cuts to higher education and push for the Millionaire�s tax to fund vital public services. While students were inside lobbying legislators to protect our public colleges and universities, thousands marched to the Capitol for a spirited rally that included speeches by Lt. Governor Gavin Newsome, Senate Leader Steinberg, and Assembly Leader Perez. While the legislators stated that the best way to support higher education is to support the governor�s tax plan, most of the speakers argued for the Millionaire�s tax.

After the rally, hundreds of people entered the Capitol and attempted to occupy the building. There was a heavy police presence, and for several hours, we were allowed to hold a general assembly to vote on our demands. The central demands were to support the millionaire�s tax, make public higher education free, and forgive student loan debt. At about 5 p.m., the police decided to close the building early, and we were soon told that we would be arrested if we did not leave. During this time, three students were arrested for trying to hang a banner from the second floor of the Rotunda. When I confronted the California Highway Patrol officers about their efforts to choke off the constitutional rights of free speech and the freedom of assembly, I was told that the students are a threat to public safety because they were blocking the pathway to the exists. I guess if you put highway patrol people in charge of the Capitol, they see everything in terms of traffic.

At 5:30, we held a scheduled rally outside of the Capitol. In a short speech, I argued that we are not only fighting for more revenue for higher education in the state of California, but our push for the Millionaire�s tax is a national fight to reverse forty years of conservative tax cuts and the de-funding of public education. I did a radio interview during the rally on this topic that you can listen at here.

After the rally, we attempted to deliver pizzas to the people who were still in the Capitol. Hundreds of us marched to the other side of the building where we met a very large group of police in full military-style riot gear. We told them that we wanted to deliver the food to the people in the building, but we were informed that the occupiers had to come out to get their pizza. We then a long standoff, which was punctuated by several chants like, �How do we want our Pizza?,� �We want it hot!� and �Let them Eat!�

We were never able to deliver the pizza, and soon 70 occupiers were arrested, but we did deliver our message. I want to thank Charlie Eaton from UAW, who did a great job coordinating many of these activities. To support the Millionaire�s tax go here, and for more media about March 5th, go here.

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