Gov. Jerry Brown and University of California President Janet Napolitano are in the early rounds of a sumo match to determine how much state support should flow into UC coffers, and what strings, if any, should be attached to those funds.
As they circle each other, it has become clear there is a yawning gap between what UC would like to spend on its operations and what the state budget sends to UC each year. Brown has $120 million more for UC in his 2015-16 budget. Napolitano is seeking an additional $100 million – and says without it, tuition would rise 5 percent.
State Sen. Bob Hertzberg’s proposal to tax services would raise $10 billion a year, including $3 billion for public higher education, but it has been met with skepticism, including from Brown.
So where to find billions in new dollars for the University of California?
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Comprehensive immigration reform – perhaps including an innovative proposal developed at UC Davis – may provide the answer.
The Obama administration recently released a study projecting California’s economy would expand by $11.7 billion over the next 10 years as a result of the president’s executive actions on immigration, which include making it easier and faster for high-skilled immigrants, graduates and entrepreneurs to stay in the country and contribute to the economy.
Douglas Holtz-Eakin, chief economic policy adviser to Sen. John McCain’s 2008 presidential campaign, projects that comprehensive immigration reform could boost the economy even more. Of course, these new tax revenues would flow into the state treasury, to be divided among K-12, health care and other priorities.
But changing how some immigration visas are issued – and earmarking those funds for states to spend as they see fit – could provide a windfall for higher education, including UC.
California companies are hungry for visas: Our employers request 17 percent of all H-1B temporary worker visas, and California has the most companies on the waiting list for new employer visas.
UC Davis economist Giovanni Peri and his colleagues have proposed overhauling the temporary work visa system by using market-based auctions. Companies could secure the right to hire a foreign worker through these auctions, and sell back permits they no longer need. The auction system would be accompanied by increased workplace enforcement, such as mandating that all employers electronically verify employment eligibility.
Peri and his colleagues predict that by enabling tech companies such as Cisco, Microsoft and Instagram to hire high-value employees, each permit could yield as much as $10,000 in an auction.
Total auction revenues could amount to as much as $1.2 billion annually for just a few categories of temporary visas. (There’s no estimate of how much might come to California.)
Expanding this program over time to cover more types of temporary visas would yield considerably more new revenue. These funds could be returned to the states to spend as they see fit – for higher education or other purposes.
Immigration reform is stalled in Washington, in part because the financial benefits would either be broadly distributed throughout the economy, or sent to the federal government. A new proposal that steers funds to public universities or other purposes in each of the 50 states could expand the political constituency for immigration reform.
Joseph Rodota is CEO of Forward Observer, a public affairs firm with offices in Sacramento and Washington, D.C., and served as deputy chief of staff to former Gov. Pete Wilson.
Editor’s note: This article has been changed with the correct figure on how much additional state funding the UC system is seeking for 2015-16.