California Forum

Viewpoints: UC needs to take a more realistic picture of its budget

Last month, the University of California Board of Regents took up a budget proposal that contains some welcome news for students: a third straight year without a tuition increase. However, UC has made clear that this proposal is contingent upon additional increases in state funding, above and beyond the governor’s multiyear commitment rooted in the passage of Proposition 30 one year ago.

The claims UC makes for greater funding in order to freeze tuition gives me pause.

A UC spokesperson recently stated that UC has “not made up for the nearly $1 billion in state funding cuts over (the past) five years” and that without additional increases in state funding, UC may not be able to “avoid a tuition increase” in the future.

That UC sustained significant cuts in state funding over the past five years is not in dispute. Such cuts were the case at nearly every level of government throughout California. The problem is that the statements regarding UC funding cuts don’t add up.

Before passage of Proposition 30, UC had sustained about $900 million in state budget cuts. UC administrators filled that hole with $1.4 billion in tuition increases. In addition, they realized $600 million in “savings” from drastic service cuts. These cuts included 4,000 layoffs, the elimination of 3,570 open positions, deferred faculty hiring, cuts to academic programs and courses, and a reduction to library and counseling hours.

Obviously, $1.4 billion in new revenue plus $600 million in “savings” is far greater than $1 billion in cuts. Once you factor in the restorations to state funding generated by Proposition 30, it becomes impossible to justify tuition increases in the near term. UC’s reliance on past funding cuts to justify threats of more austerity on the backs of students, patients and staff has masked UC’s epidemic of misguided priorities.

During the same five-year window referenced by the UC spokesperson, payroll costs for the top 1 percent of UC employees grew by more than $250 million per year, and the number of individuals receiving more than $250,000 a year in salary more than doubled. In 2012 alone, UC paid out $24 million in added perks such as housing, car allowances and entertainment budgets to more than 300 executives, a 50 percent increase from the $16 million paid out four years earlier.

Then, of course, there’s the matter of UC’s unfunded pension liability, a crisis that UC administrators created through their own unrealistic expectations, reckless investment strategies and mismanagement.

During the regents’ budget discussion, former chairwoman Sherry Lansing demanded that Gov. Jerry Brown and the Legislature offer UC’s pension system “equity” with the California State University and Community College systems. Lansing was comparing apples to oranges, and the governor wasn’t buying.

Thanks to the governor’s pension reform law, CSU and California’s community colleges have taken the responsible step of capping retirement payouts to their highest-paid executives. UC has not only failed to follow suit, it has lobbied against any effort to hold itself to this same standard.

In 2012, The Associated Press released stunning numbers that put a fine point on the problem. There are 2,129 UC employees receiving annual payouts of greater than $100,000 – some as high as $300,000 – every year, for life. The UC’s number of six-figure pensioners also had ballooned by 30 percent in just two years.

And since UC’s ranks of high-paid administrators continue to grow, the absence of a cap that guarantees “equity” between UC executives and their peers at CSU and the community colleges means that this financial drain will only get worse with time.

Ultimately, it’s hard for the public, to say nothing of the Legislature, to take UC’s claims of budget woe seriously in light of its reliance on such obviously dubious claims.

One can only hope that before new UC President Janet Napolitano comes before the Legislature, she presents a more realistic picture of UC’s budget. If she does not, she will only continue to undermine UC’s credibility in Sacramento.