First and foremost, the University of California is a public institution, created and paid for by the people of California. Its mission statement includes the promise of offering undergraduate programs to all "eligible California high school graduates and community college transfer students" and creating "an educated workforce that keeps the California economy competitive." Public money – from the state general fund – last year supported the university to the tune of $3.3 billion, providing 60 percent of the university's core revenues. It's our resource, our dream for our children.

Unfortunately, this week, the latest budgetary news for our local UC Davis has gone from bad to worst, and the campus faces a possible cut in state funds and a budget cut of $29.3 million.

Linda Katehi, a University of Illinois provost who was hired this month to lead our local UC Davis, comes on board at a time when staff salaries throughout the entire University of California system are frozen.

Yet, she will make $400,000 – $85,000 more than her predecessor, 15-year veteran Larry Vanderhoef, who was promoted to his post from within the UC Davis campus following 10 years as executive vice chancellor and provost.

Katehi will make $44,000 more than she did at her previous post. She'll also get free housing, $100,000 in relocation expenses, and an annual car allowance of close to $9,000 – slightly more than the annual fees UC students will be asked to pay to attend school next year.

UC President Mark Yudof defended the new chancellor's compensation package as a hedge against private industry, which "would eat her up in a minute and hire her" should UC fail to lure her to take the Davis post. Yudof also pointed out that Katehi, who he said holds 16 patents, and new UCSF Chancellor Susan Desmond-Hellmann, the former president of product development at Genentech, will be paid less than their colleagues at private universities. Katehi herself told The Bee that she had seen many capable people move from public to private institutions.

But should we, the little people, the taxpayers who fund the University of California, be in the business of matching the competition? As an engineer, and former professor of engineering, university dean, provost and expert in electronic circuit design, Katehi could probably make a boatload of money doing something else.

That's an argument that's been used to justify the multimillion dollar salaries of researchers, executives and professors at some private colleges as reported in February for the 2006-07 year by the Chronicle of Higher Education. It's been used to explain why at our own publicly funded University of California, we pay the leaders of all our campuses handsomely – ($320,000 to $400,000, according to the Chronicle of Higher Education, plus car allowances, rental homes and retirement). That's in addition to the even bigger package we paid out to the president of the entire University of California system, who collected $434,000 in compensation last year.

It is certainly in the interest for the University of California to seek qualified leaders, but at our public university, it may be time to re-examine what that means.

It may mean that private institutions like Stanford or any of the Ivy Leagues can make different decisions about hiring, based on the preferences and finances of their own private boards and donors.

It may also mean hiring a UC chancellor with a track record of leadership and enthusiasm for the job, even if he or she isn't an expert in a field most of us don't understand.

When it comes to bidding wars with private industry and private colleges, maybe it's time for the public to bow out.

Over in Washington, D.C., we've hired a smart guy with a flair for leadership and a passion for change. He's working for $400,000.

Jill Duman is a journalist, parent and part-time playground attendant.