The UC Budget and the Damage Done

At the last UC Regents meeting, a discussion of the UC budget outlines the following evidence of the deterioration of educational quality in the UC system:

� At UC Riverside, they will walk onto a campus where enrollment has grown in the last three years by nearly 3,000 students � many of them the first in their families ever to attend college � while at the same time the number of faculty has been reduced by five percent. The result: class sizes have grown by 33 percent. Introductory physics classes that used to average 95 students have exploded in size in three years to 573 students.

� At UC Santa Cruz, students will be provided with 84 fewer course offerings and their class sizes will have spiked 33 percent. The student-faculty ratio has exploded by nearly 15 percent, and the campus lacks funding for 125 faculty FTE � 14 percent of its faculty positions. Yet for all the cuts, the campus still faces a daunting $38 million budget gap.

� UC Santa Barbara has over 1,000 more students than it did three years ago, but the number of staff has declined by 450 (nearly 11 percent) during that time, and the faculty has remained the same size. The results are fewer student services, larger classes and discussion sections, and reductions and eliminations in many programs.

� And across the system, pension costs alone will rise to $1.8 billion annually in the next five years � an expense that campuses did not have to shoulder as recently as three years ago. If there is no increase in either State funds or tuition during this time, campuses will have to find the equivalent of funding for 7,000 staff or 3,900 faculty to fund this expense alone.

In other words, classes are getting bigger, courses are being cut, the number of faculty has been reduced, but the number of students has gone up. Moreover, the campuses are about to be hit with major pension costs, and it is unclear whether the state budget will provide any significant funding for the UC system.

These internal budget cuts not only mean a shortchanging of undergraduate instruction, but they also result in a longer time to degree, which in itself restricts access and reduces affordability.

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Meeting at the White House, the State Tax Initiative, and the UC Regents

On March 27th, I made a presentation at the White House on how to control tuitin increases at American research universities. My first major point was that any attempt to contain tuition at public universities has to deal with state budget cuts for higher ed. I was told that the administration is aware of this issue, and they have been meeting with the presidents of several public universities to come up with a way to motivate states to stabilize higher ed funding.

My second major point was that while President Obama has been stressing affordability and access, he also has to focus on the quality of instruction. To make this point, I discussed how universities have been increasing the sizes of their classes and their dependence on under-supported non-tenure-track faculty to drive down the costs of instruction; meanwhile, the cost of administration, athletics, and construction has continued to increase. As I argue in my forthcoming book, the only way to control costs in higher education is to focus on providing quality instruction and research, but there are no incentives to make universities concentrate on their core missions.

One possible way of changing how universities spend their funds is to rank and rate universities based, in part, on the percentage of their budget that they spend on direct instructional costs (faculty salaries and benefits). I suggested to the administration that they add to their new College Scorecard statistics on how much of a university�s budget is spent on direct instructional costs and what percentage of their student credit hours are taught by full-time faculty. If universities had to report on these factors, they would need to commit more attention and funding to their core mission.

We also discussed President Obama�s fight to stop student loan interest rates from doubling this summer. I mentioned that in California, we are trying to freeze tuition by increasing the taxes on the wealthy, but we still need the federal government to combine the current emphasis on access and affordability with a focus on educational quality. Moreover, in the case of the UC system, it is clear that we have to force the governor and the legislature to dedicate new tax revenue to higher education. In fact, at the recent Regents meeting, several of the regents said that they do not think they can support the governor�s tax initiative if it does not dedicate funds directly to the UC in order to prevent another tuition increase. I have been meeting with people from the governor�s office and key legislators to push for a major increase in UC funding, but so far, no one has committed to guaranteeing UC funding and tying the higher education budget to the new tax initiative. We all need to work together now to push the governor and the legislature to provide enough funding to roll back recent tuition increases.

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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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The Millionaire�s Tax and the Reversal of the Conservative Revolution

The �Millionaire�s Tax� is being seen as a fight that has national and international implications. As austerity policies spread throughout the world, very few states or countries have tried to reverse the course and raise taxes to support needed public programs. In response to the global financial crisis of 2008-9, the general consensus has been that one must bailout the wealthy, while one cuts governmental services for everyone else. For instance, as the US Federal Reserve continues to give trillions of dollars of no-interest loans to banks and investment firms, almost every state has cut its funding for higher education. Also, as state cuts result in larger tuition prices, students are forced to take out huge loans, while universities and colleges increase class sizes and reduce enrollments.

At the heart of this push for austerity is a conservative revolution based on a tax revolt. Starting with Prop 13 in California, rich people realized that if they wanted to increase their income and decrease their taxes, they would need to demonize government and equate it with welfare for minorities. In other words, the major way that conservatives have justified tax cuts for the wealthy is by arguing that we do not need taxes to support Big Government, and how they make this anti-government rhetoric work is by connecting symbolically Big Government to minorities. In turn, to show that minorities do not need our help, and in fact these minorities on welfare are the victimizers and not the victims, conservatives had to convince people that minorities are no longer the victims of racism, sexism, and classism. Thus, according to this logic, if we live in a post-racial and post-gender society, there is no need to help out disadvantaged minorities through welfare, and therefore we do not need Big Government or even taxes.

Of course, it does not matter that welfare makes up a small part of the federal budget, and most people on welfare assistance are white; what matters is that by conjuring the image of the Welfare Queen or the Food Stamp President, conservatives are able to access the part of our brain that is structured by unconscious, symbolic associations. For example, in a study of word associations, it was found that conservatives often associate the words crime and welfare with black people. This type of automatic, intuitive, unconscious association is often in conflict with the conscious ideas that people hold. Therefore, people may think that they are color-blind, but a part of their brain color codes social representations, and this is why the conservative use of coded attacks is so effective. For instance, when New Gingrich uses the phrase �our Food Stamp President,� he is not only saying that Democrats like to give food stamps to poor people, but the President himself is imagined to be a black man on food stamps.

In terms of the Millionaire�s tax, the reversal of this unconscious conservative cultural revolution will entail re-educating people about what the government can do, while we also reverse the reversed racism that sees poor people, immigrants, and public employees as the victimizers and rich people as the victims. Instead of pitying the billionaires, we have to get people to see that we are all part of the 99%, and the 1% should pay their fair share. In fact, the Occupy Wall Street movement has helped to create a new set of unconscious associations that link the wealthy to the exploitation of everyone else. Let us wok together to push for the Millionaire�s tax and a reversal of the conservative revolution. We will have rallies on the UC campuses on March 1st, and then we will occupy Sacramento on March 5th.

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Academic Council Rejects Proposed New Compensation Plan

The UC Academic Council (the system-wide faculty senate) has rejected the new proposed compensation system (APM 668) , which would �allow academic departments to use non-state funds to provide additional salary for general campus faculty, similar to the health sciences compensation plan.� The Council declared that, �All ten divisions and five committees (CCGA, UCAP, UCFW, UCORP, UCPB) responded. Academic Council discussed the proposal at its meeting on December 14 and concluded that it cannot support adoption of the proposed APM 668. While many members expressed support for the goal of finding creative ways to better compensate faculty and improve retention, Council agreed that the proposal as written is fundamentally flawed and strongly opposed its implementation.�

This news is very welcomed because the proposed plan would have created incredible inequality within the senate faculty ranks. According to the report, �While a minority of individuals and two divisions (UCSD, UCSF) welcomed the proposal as a way to offer competitive salaries to retain faculty, the majority found it deficient because: 1) it undermines UC�s tradition of setting salaries through peer review based on a common salary scale and cedes too much authority for setting salaries to deans and department chairs; 2) it exacerbates inequities by rewarding only those achievements that receive external funding; 3) it is likely to cause conflicts of interest and faculty effort; and 4) it does not anticipate or provide mechanisms for addressing unanticipated consequences.� This new compensation system would have allowed faculty to increase their base pay through external grants and departmental revenue, and this would undermine the salaries of faculty in the humanities and the social sciences, while it would increase the salaries of the highest earning professors. Moreover, this system would circumvent the peer review system and would increase the collusion between faculty and administrators.

What this report does not say is that a large number of professors are already gaining large salary increases through retention offers and private negotiations with individual administrators, but this rejection of the new system is a step in the right direction. As my research has shown, the major problem that senate faculty face in regards to compensation is the growing disparity between the stars and everyone else. While the report does recognize this issue, it actually dismisses the role played by off-scale salaries in creating huge compensation disparities: �Off-scale salaries are not arbitrarily determined; they reward exceptional merit through the regular academic personnel review process (UCSB). If implemented, the policy should require that deans consult with CAP to validate salary decisions (UCI).� Although the people from UCSB argue that the current retention system does not circumvent shared governance and the peer review system, a past report revealed that a large majority of UC professors have negotiated individual deals with administrators, and while merit reviews do go through peer review, retention offers are handled by administrators.

The Council did point out that the new compensation system could �worsen gender and racial salary equity issues, and that it would �reward only some forms of faculty effort and accomplishment (UCPB).� Moreover, the Council report states that this system �could provide incentives for faculty to shift their effort toward revenue-producing research activities and away from other types of research and teaching and service, producing a �conflict of effort�.� Once again, it is important to stress that we already have a system that does incentivize research over teaching, but it is good to know that the Council is aware of this issue.

Another important point in the report is that the new policy �is an ill-considered step toward increasing privatization of the University, absolving the state of its responsibility to support the institution in the name of entrepreneurship.� While this process of privatization is also already happening, it is vital that the Council is thinking about this ongoing issue. Furthermore, some of the campuses have rightly pointed out that the new plan could also hurt the ability of grants to cover their full costs by decreasing the Indirect Cost Recovery (ICR): �first, since ICR does not fully cover the cost of research, an increased number of grants could worsen the university�s fiscal situation (UCLA, UCSB). Second, ICR could be reduced due to the diversion of research funding to salaries (UCORP).� As I have been arguing for years, one of the central problems still facing the UC system is how to pay for the full cost of research.

Another concern is that by stressing the generation of entrepreneurial revenue, the university would be undermining its public nature: �Some fear that it would negatively impact the public character of the university by encouraging the creation of more high-fee, self-supporting programs that drain faculty resources from core programs (UCLA).� In fact, I have feared that this new compensation plan would push faculty to accept the move to online courses because departments have been told that these high-tech classes will generate extra revenue for professors.

In this new privatized and corporatized university, increases in compensation inequality could create a culture of resentment, and therefore the Council warns that, �the proposal may benefit a small number of faculty but that it will not solve systemic compensation problems.� Unfortunately, the solution proposed by the Berkeley campus would only increase the current problem: �Berkeley suggested that allocating revenues, when available, to provide additional off-scale salary increments, would be a better way of funding increases, without the problems associated with the proposed negotiated salary program.� This emphasis on off-scale salaries will not reduce compensation inequalities and the circumvention of the peer review policy. What the senate faculty need is a new and improved salary scale.

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