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Sunday, September 10, 2017

Sunday, September 10, 2017
Trump presides as the King of Pain, inflicting turmoil and loss on others, seemingly without effort or long-term benefit.  Last week the pain came from his administration's termination of the Deferred Action for Childhood Arrivals (DACA) program this coming March.  The idea seems to be to threaten the program's 800,000 recipients with impeding job loss and deportation while the Congress that made DACA necessary by failing to pass immigration reform works again on passing immigration reform.

In "The Psychic Toll of Trump's DACA Decision," Karla Conejo Villavicencio writes,
Spreading fear and anxiety, of course, is part of the administration’s plan. Thomas Homan, the acting director of ICE, recently said: “If you’re in this country illegally and you committed a crime by entering this country, you should be uncomfortable. You should look over your shoulder, and you need to be worried.”
The renewed fear comes to a community that already leads a kind of lower-caste life bounded by suffering.
Undocumented life in America is hard on the mind and body. Poverty, precarious employment, poor access to health care, discrimination and trauma from the migration itself often lead to disorders like depression, anxiety and post-traumatic stress disorder. Access to mental health treatment is scant, the demands of simply surviving are overwhelming, the fear of being discovered discourages people from seeking care, and the stigma of mental illness has perpetuated a culture of silence that only worsens the suffering. . . . All of the immigrants I have interviewed and known throughout my life seem to accept chronic exhaustion, low self-esteem, fear and panic, low moods and fits of crying as normal for the melancholic migrant struggling to subsist without being arrested. 
DACA was intended to give limited relief to one set of undocumented US residents: those who were brought to the U.S. by their parents as minors (under age 16) before 2007. It authorises two-year renewal work permits and "defers removal proceedings."  It was implemented in 2012 with a major assist from UC president Janet Napolitano when she was Barack Obama's Secretary of Homeland Security. The program has been generally popular: in 2013, back before he ran for president, Trump met with Dreamer activists (above; photo credit: Estuardo Rodriguez).

In the wake of the announcement, Janet Napolitano has gone one step further. She and the UC Regents are suing the Department of Homeland Security to prevent it from ending DACA.  The lawsuit claims that DACA is being terminated through an "unreasoned executive whim" that violates the Due Process Clause of the Fifth Amendment and the Administrative Procedures Act.  In her op-ed explaining her decision, Napolitano writes that the Department of Justice
offers no rationale based on the merits of DACA itself, but rather on the purported illegality of a separate program with different rules and aimed at different immigrants (the parents of DACA-eligible young people), a program that never went into effect. That justification is flat out wrong. The DACA program was a legal exercise of the department’s prosecutorial discretion and no court has found DACA to be invalid. 
In fact, in 2014, the Department of Justice office that reviews the constitutionality of executive branch actions determined that DACA was lawful. Now the Trump administration’s DOJ offers no reasoned analysis for its about-face.
Like many other university heads, Napolitano had already denounced the decision to end the DACA program while affirming the continuation of DACA-related legal, financial aid and advising programs (UC's are also summarised here; UCSB's Undocumented Student Services page is here).  In addition, she had confirmed that UCOP was
Directing campus police not to contact, detain, question or arrest individuals based on suspected undocumented status, or to enter agreements to undertake joint efforts to make arrests for federal immigration law violations.
Other universities, including the Cal State system, were already declining to cooperate with immigration officials, prompting threats of retaliation from some officials (e.g. Texas).  The University of California now becomes the first to sue, with standing to sue grounded in the harm done to its 4000 DACA students.

In the meantime, DACA students, please note: "Students whose legal status expires before or on March 5 can renew their two-year DACA status if they apply before October 5."    USCIS information is here.

I'm glad Napolitano has put UC out in front on this issue.  DACA was a patch on an immigration reform process that had been broken by congressional Republicans, and the patch should stay where it is.

But there's also quite a bit of politics to get through, and then a self-made trap for universities, with which I'll conclude.

First, the politics, which have shifted in favor of DACA.  In an echo of the lawsuits against the Muslim travel ban, the attorneys general of 15 states are suing the Trump administration to block DACA's termination, "citing Trump's racial animus."   The White House was already divided on termination, as Trump himself seems to be: his varying statements include suggestions that he would sign future DACA legislation sent to him by Congress and that for the 6 month period leading up to termination, DACA people "have nothing to worry about."  Silicon Valley supports DACA, as does the business wing of the Republican Party, as does every Democratic elected official who has spoken on the matter, as do many governors, mayors, city councils, police chiefs, school district heads, church leaders, and so on. So does two-thirds of the general public.  Ending DACA is turning out to be another unpopular thing that this popularity-obsessed president has done.   He has also done it after hurricane Harvey had devastated southeast Texas and as hurricane Irma was steaming towards Florida.  He did it at the start of a nasty political autumn when he will need solid support from both parties to raise the debt ceiling among other unpleasant political tasks.  DACA back-pedaling may be commencing soon.

Why did he do it then?  The simple answer is that the unifying principle of Trump's worldview is white supremacy. (See Ta-Nehisi Coates' piece, "Our First White President" if you need convincing, or even if you don't.)  More narrowly, his clear "racial animus" made it easier for him to take DACA students hostage to exchange for Democratic support for a border wall.  This is one motive for the timing of the announcement, though too many members of both parties hate this exchange for it to work.

A second motive for Sessions and Trump is that they are losing the immigration issue in the court of public opinion. They must have assumed that white identity politics would keep the base stirred up after it had put them over the top last November.  And yet there was no groundswell to defend the Muslim ban.  There was very limited excitement on the Right--and a fair amount of embarrassed condemnation--after the white supremacist show of force in Charlottesville last month. Charlottesville's immediate effect was to grow the size of anti-Trump counterprotests to proportions that made the Trump fans hard to find.

Trump's anti-immigration stance has not actually built a coalition beyond his base of a quarter to a third of voters.  Though immigration reform politics are complicated, and racism is a steady baseline,  the overall public is not anti-immigrant.  In the most recent national poll, a majority objected to Trump's pardon of Latino-abusing former sheriff Joe Arpaio and, in addition to supporting DACA by a two to one margin, favored some "path to citizenship" for all undocumented residents by nearly three to one (71 percent).  Americans are now more likely to favor increased immigration than they were in 1986 when Ronald Reagan signed the last "path to citizenship" immigration bill.

Still worse for Trump, DACA has been doing four things to erode support for a hardline anti-immigration position.

It has rebranded young Latino immigrants as the new "model minority"--the young Americans next door.

It has appealed to the American desire to side with the innocent, which helps it to see itself as innocent.  (For example, it is easier to admit child refugees from a Honduras made more lethal by Hillary Clinton's support for the 2009 coup against elected president Manuel Zelaya than to confront destructive U.S. policies in Latin America.)

Third, DACA has shown that diverse societies work. Integration is simply more practical as well as more humane than deportation, which seems particularly oafish and stupid in relation to DACA recipients.  Everyday life has tended to cut through the economic debate about whether immigrant labor is competitive with or complementary to native-born labor. Wherever the economy is functioning well, actual practice is an interdependent non-zero sum.

Finally, DACA has been showing that government programs can solve awkward social issues and reduce specific miseries. That fact on the ground disputes the Right's overall world view.

Attorney General Jeff Sessions is a lifelong race politician, and is no doubt aware of all this.  His announcement of the DACA termination sought to broaden termination's appeal on three points.

He stated that a "lawful immigration policy that serves the national interest" prohibits an "open border policy." Second, he stressed DACA's vulnerability to "legal and constitutional challenges," saying that his review found it to be inconsistent with the Constitution's separation of powers. He said he was establishing an orderly wind-down that would give Congress time to act if it so chose.  Third, he claimed that a "lawful and constitutional immigration policy" will "further economically the lives of millions who are struggling."

Sessions thus combined a "nation of laws" defense with a reference to Trump's fabled promises to bring back American jobs.  The overall point was to affirm that DACA residents are generally good people while rejecting Obama's executive order as undermining constitutional law and hurting citizen employment.

In the coming weeks, Sessions will try to appeal to people who know they too come from immigrants, who feel badly about pulling the ladder up now, but who worry about open borders, foreign disorder, ignored lawbreaking, and the scarcity of well-paying jobs.  He will also position defenders of DACA students as lawbreakers themselves. He'll specifically go after universities as a class, saying they think they are too good to follow the same laws that apply to everybody else.   He'll build on the Right's established vision of  universities as part of a liberal elite that has let middle-class jobs disappear while asserting their own special privileges.

To stay ahead of this issue, universities are going to have to do three things--three things in addition to the basic critique of such things as Sessions' own rationales The economic debate (e.g. Borjas v Krugman) must continue, but it has been fought to a draw that does little to affect people's sense of their economic experience. 

The first is have a good offense, and Napolitano's lawsuit provides it. It claims that legal procedure was broken not by universities like UC but by Sessions himself.  She is also a Democrat with a  unique claim to the "nation of laws" argument: she was a central player when Obama increased border enforcement and deported more undocumented migrants than any other president in history, and this record produced protests of her UC hire by the immigrants rights community that she sides with on DACA.  It will be hard for Sessions to position the UC lawsuit as emerging from someone who's soft on illegal immigration.

Second, colleges and universities will need to do a much better job of achieving racial equality.  Higher education was meant to be part of the solution to race-based discrimination, but decades of cuts and austerity have impoverished the institutions that serve the majority of students of color, starting with community colleges.  For example, there is a clear correlation between grossly unequal funding and unequal graduation rates (see Stage 7 of The Great Mistake or Separate and Unequal for details).  The U.S. has been trying to equalize K-12 funding across school districts for decades, though the egalitarian principle is honored in the breach, and resegregation has been spreading everywhere. Higher ed needs to get serious about embarking on its own equalization project.  The educational boon would be huge.  So would the political benefits for universities: they would associate themselves with inclusive social development via an equality across aggregate populations this is efficient as well as just. 

Third, racially egalitarian development will be credible only if universities break with their implicit 1990s-era economic model that has helped underdevelop much of the country. I mean the Clinton-style knowledge economy, which was to deliver general prosperity and instead produced stagnant wages for three-quarters of the workforce while devolving whole regions at a time.  Democrat consent to low tax dogma, supported by leaders in tech and finance, has eroded the infrastructure and public services that would have held economy and society together.  At the same time, universities have made their own workforces into microcosms of the dual economy that most voters hate: faculties are divided between a shrinking tenured elite and the contingent masses who comprise about 70 percent of the instructional workforce.  Administrative bloat has not stopped the same segmentation in non-teaching staff: UCSF made national news this year by outsourcing to an offshore company exactly the kind of information technology jobs that universities are supposed to prepare their students to have.  For the general public to care about universities's views on economics and immigration, they will need to set a better example.

In any case, the fates of universities and immigrants are intertwined.  Universities only make sense as a public good grounded in tax-based public systems that support full social development; similarly, immigrant and non-immigrant labor thrive together only in a social ecology sustained by strong, equitably distributed services in health, education, housing, transportation, and employment.  The same degradation of the public sector that has damaged public universities has intensified an artificial competition between immigrant and non-immigrant labor.  Universities could do a better job of using their own scholars's research--represented by the quotations with which I began--to show the range of both market and non-market contributions that immigrants have always been making.

I realize these last two points are a reach, and require new top-level strategy.  But though the UC lawsuit for DACA is a good start, it has a much better chance of lasting success--and of leading to stability and healing--if universities publicly engage with racial capitalism and the dual economy it has created.
Posted by Chris Newfield | Comments: 2

Friday, July 7, 2017

Friday, July 7, 2017
The Office of the President is asking for authority to lower UC's contribution to retiree health benefits.  This reduction would take the form of removing UC's commitment to a payment floor of 70% of aggregate retiree health premiums (7).  This figure had been set as part of the long and public discussion over benefits and debates that surrounded the President's Task Force on Post-Employment Benefits and approved by the Regents in 2010.  That discussion you may recall was long and involved and resulted in a series of steps (including the restarting of University contributions) to help improve the long-term stability of UCRP.  Importantly, at that time employees agreed to what was, in effect, a pay cut through resumption of employee contributions to a retirement system that had been poorly managed by the Regents.  These debates were heated and the results controversial.  But they resulted in what current Senate Chair Chalfant has called an implicit "social contract."  UCOP is now seeking the authority to shred a significant part of that agreement.

Just as striking has been the lack of genuine consultation with either faculty or staff, let alone serious public discussion of the implications of further shifting the burden for retirement costs onto employees.  There was no formal proposal distributed to the Senate for systemwide review; the relevant systemwide Senate committees were only consulted about a related issue concerning a proposed limit of 3% annual cost increases, a proposal not included in the current UCOP request (2) I do not know if any of the staff organizations have been consulted. The Regents item offers no justification for the action: no modeling to suggest its real financial effects on the University or its employees, no consideration of its implications for recruitment and retention and certainly no acknowledgement of the labors and reasons for the establishment of the 70% floor in the first place.

Nor is there any explanation for why circumstances have changed so drastically that UCOP is asking for what seems to be unchecked authority to reconfigure retiree health care.  Indeed, as the Senate notes, it "is also troubling that the proposal will be presented to the Regents Finance and Capital Strategies Committee rather than the Governance and Compensation Committee, which has the topic of benefits in its charter" (2).  The new Regent organization was supposed to provide clearer lines of responsibility and greater transparency of decision making.  This treatment of an issue of broad workplace concern as a technical financial issue does not inspire confidence that that is the case.

For all of these reasons, the Senate, CUCFA, and the CUCEA have opposed this proposal.  They are right to do so.

I cannot leave without noting that, whatever one's perspective and judgement about the State's Audit of UCOP, one clear lesson that I would have thought had been learned was the need for greater transparency about decision making, more open debate about important university issues, and the increased importance of providing reasons.  In pushing this proposal at the July Regents meeting (and it is an action item not a discussion item) UCOP instead is suggesting that the Regents approve an ill defined, inadequately justified rush item whose real implications for the University have not been seriously debated.  If UCOP insists on moving forward with this proposal it cannot be surprised if its already damaged legitimacy among faculty and staff shrinks even further.

Posted by Michael Meranze | Comments: 5

Wednesday, June 28, 2017

Wednesday, June 28, 2017
If there was ever any doubt that the results of the UCOP audit and the University's response has damaged UC's political standing, the 2017-2018 budget should put those to rest. The Budget displays a remarkable suspicion of UC.  In this post, I want to indicate 3 of the crucial indications of that suspicion.  I hope to discuss some larger questions about the state of UC governance and ways to overcome its evident difficulties in a follow-up post soon.

The bottom line is that the new budget provides less state money directly to campuses while increasing the demands that the State is placing on the system. Let me explain.

1.  The 2017-2018 budget provides an additional $132.2 million increase to the university's base funding.(21)   But at the same time, and contrary to previous practice, the State has declared that $296.4 million of the General Fund support will be used to support the Office of the President. (An additional 52.4 million will go to the ever increasing costs of UCPath). (21) Crucially, these set asides mean that the $348.8 million are not additional monies but must be taken out of the base state funding.  In other words, less General Fund money--which is crucial to support the core--will be going to the campuses.

The Legislature has taken this step because they believe it will provide them greater leverage over OP and also eliminate the burden of the campus assessments that have previously funded the President's office.  I am not persuaded that we want legislators deciding which systemwide programs UC should pursue.  But leaving that issue aside, there are important unintended consequences here. Previously UCOP had been funded through assessments according to calculations on total campus funding, personnel, and students.  This system meant that OP tax was levied on all of the auxiliaries, medical centers, and businesses of the campuses in addition to the core.  Now, in effect, OP is being funded solely by the core. Eliminating the assessments and funding OP through the general fund is designed to lessen the demands on campus resources.  But because auxiliaries are no longer being taxed to support OP this shift may increase the financial constraints on placed on the core functions of teaching and research.  This particular line item does nothing to reduce the costs of UCOP.  The same amount of money is simply being drawn from a more narrow range of university functions--in fact the functions that make a university a university.  Whatever its intent, the legislature has effectively shifted funding from the core to auxiliaries.

Now it is possible that individual campus chancellors will work out some sort of internal tax to transfer money back to the core from the auxiliaries.  But that will be a matter of internal politics and power.  It is also an even less transparent system than we have now since these transfers will differ campus by campus. It will face potential legal obstacles if monies are shifted from overhead to undergraduate teaching.  How all of these changes will effect the uniformity of funding per student that has resulted from rebenching is unclear to me.

2.  At the same time, the budget withholds an additional $50 million until the Director of Finance certifies that UC has met certain specific legislative and gubernatorial demands.  Some of these are easy to accomplish and unobjectionable: progress on implementing the 33 recommendations of the State Auditor that UCOP has already agreed to; eliminate retirement supplements for senior managers; and provide better justification for presidential and systemwide initiatives and clearer budget presentations.

But two are deeply problematic.

The first is the completion of pilot programs in Activity Based Costing already underway at Riverside's College of Humanities, Arts, and Social Sciences and to be expanded to two other campuses.  As Chris has discussed, ABC, though claiming simply to be a tool for ensuring that funding goes where it is needed, in practice its effects are to drive universities towards the reduction of costs and the establishment of arbitrary benchmarks (otherwise known as speedups) while sidelining the question of quality.  Equally importantly, as Academic Chair James Chalfant has pointed out, the budgetary demand for ABC intrudes upon the autonomy of academic decisions, "the delivery of the curriculum is an Academic Senate function and the allocation of teaching resources is an academic decision; such decisions are based on academic priorities, and any methods used or choices made to optimize the educational enterprise with available resources must be left to academic departments and schools."

The second is a demand that all campuses achieve a 2-1 first year/transfer ratio in applications (with the exception of Merced and UCSF).  I suspect that this demand has its long term roots in the original Master Plan expectation that lower division students would make up only 40% of the overall undergraduate population. (24)  To achieve that goal, something like a 2-1 structure would have been necessary.  But that expectation was for the system as a whole not for every campus.  UC as whole is on the verge of achieving this 2-1.   The sticking point appears to be that Riverside and Santa Cruz have not been able to meet this benchmark. But all evidence suggests that both campuses have admitted as many transfer students as have met UC requirements (I will leave aside the ridiculous idea of thinking that Riverside, which for decades has been the most important campus for achieving social mobility, is turning away eligible transfer students).  If there was some evidence that these campuses were dragging their feet it would be one thing.  But instead we have an overly rigid demand threatening to reduce UC funding even further.

Both ABC and the Transfer demands are examples of the imposition of ahistorical and non-contextualized demands far removed from the actual practices or local conditions of the university's campuses.

3.  Finally, the budget demands a 1500 undergraduate student increase.  There are no additional funds for this increase, simply a command that money be shifted from systemwide and presidential initiatives. (6440 sec2.2)  Despite all of the talk over the last few years of the growing state support for the system, in reality the state has not been providing adequate funding for the increased student populations and the University has not been directing adequate funding towards faculty and front-line staff to meet the enrollment growth.  I think that all of us are aware of growing class sizes, increased demands on staff, inadequate housing for students etc.  This budget will make things worse.

I'll discuss internal governance issues in my next post.  But for now I think that it is clear that this particular budget is a step backward in maintaining UC quality.  It is a dramatic display of the increasingly broken relationship between UCOP, the Regents, and the State that affects all of us who work or study at the University.

Posted by Michael Meranze | Comments: 2

Tuesday, June 20, 2017

Tuesday, June 20, 2017
On June 2, following the negative state audit of budget practices at UC's Office of the President (UCOP) and then regental partygate, the governor's office announced four new appointments to the UC Board of Regents. This rekindled some press interest in the conflict between the sudden announcement of completed appointments and the process described in the state constitution.  Yesterday, the Council of UC Faculty Associations (CUCFA) has written a letter to state Senate President Pro Tempore Kevin de León asking that "the California Constitution be followed when nominating Regents to the University of California." I'll discuss the letter and why we would need it in the first place.

Brown's new appointments are:
  • a Hollywood studio executive (Peter Guber, 75, joining Regents Sherry Lansing and Richard Sherman from that industry); 
  • a former politician who serves on the Governor's Military Council (Ellen Tauscher, 65, joining Regent John Pérez, former Speaker of the Assembly); 
  • one of the governor's political advisors (Lark Park, 47, joining former Brown advisor Gareth Elliott, appointed Regent in 2015); 
  • a financial manager (Maria Anguiano, 38, joining Bonnie Reiss and Richard Blum).

Anguiano would be the only regent in recent memory to have direct UC administrative experience. She'd add to the Board's very rare higher ed expertise, now represented by Regent Eloy Ortiz Oakley, the chancellor of the 113-campus California Community College system. Anguiano served as Vice Chancellor for Planning and Budget at UC Riverside.

The Regents in the State Constitution

In 1974, the California State Constitution was modified to insure that the UC Board of Regents represented the full range of the state population, rather than the full range of each governor's political circle.  Section 9 of Article IX, paragraph 5(d) reads,
Regents shall be able persons broadly reflective of the economic, cultural, and social diversity of the state, including ethnic minorities and women. However, it is not intended that formulas or specific ratios be applied in the selection of regents.
In appointment practice, the state's large poor population is unrepresented.   Its embattled middle class is barely there, in the distorted form of political lobbyists and senior managers who may get close to top 1% salaries but not to the 0.1%. The sole public education official on the appointed Board, CCC Chancellor Oakley, is probably the Board's low-income member.

The San Francisco Chronicle's higher ed reporter Nanette Asimov summarized the situation:
Of the 18 appointed regents, including the four just named, half are financiers, corporate executives, investors, real-estate developers or corporate attorneys. Three are former politicians. One is Brown’s senior policy adviser, and another — a former finance expert at UC — is chief financial officer at a company that supplies technology to a private college in San Francisco. The others are an eye doctor, a Sacramento lobbyist, a nonprofit policy director, and the chancellor of the California Community College system.
The governor's appointments are out of compliance with this section of the constitution, as have been all of his predecessors.

Second, the 1974 reforms set up an appointment advisory committee that the governor is to consult prior to making appointments (paragraph 6(e)).  The Chronicle reporter Asimov looked into the functioning of this advisory committee and found that it never met or advised.  Her piece was entitled, "Are governors ignoring law when appointing UC regents?"
[S]ix committee members reached by The Chronicle said they are never consulted in the selection of regents — only told shortly before the announcement that choices have been made. 
“Typically, I get a heads-up with a phone call that appointments will be happening,” said Rishi Kumar, a Saratoga city councilman and public member of the volunteer advisory committee. “We receive an email with the profiles of the folks that are going to be appointed.” 
Whether the governor is breaking the law would be up to a judge, said Jessica Levinson, a law professor and government ethics expert at Loyola Law School. 
"But it’s pretty clear that it doesn’t meet our expectation,” she said. “Our general expectation of ‘consult’ is that it’s distinct from ‘informing.’ You wouldn’t say, ‘I’m consulting this person by leaving a note on their door.’"
If by "note" you include email, this kind of executive not-consulting is routine. That's why consultation was written into the state constitution in 1974.

Acting like the 1974 process doesn't exist also miseducates the regents themselves.
"I had no recollection of the existence of the committee in my 14 years on the Board of Regents,” said Bill Bagley, who was named a regent by Gov. George Deukmejian in 1988 and served in the state Assembly when voters approved the advisory committee. 
Bagley, an expert on government ethics for whom California’s Bagley-Keene open records and open meetings law was named, said the committee should have at least a week to opine on the governor’s preferred regent candidates.  
That would make sense and be easy to do.  It would also bring the governor and UC into compliance with the state constitution.   If the governor complied with 6(e), consulting the advisory committee, it would make it easier to come into compliance with 5(d), appointing a representative Board.

A recent regent made this point. Fred Ruiz's departure from the Board reduced the presence of the Central Valley on the Board from one to zero; he sent a list of 20 Central Valley candidates to the governor's office, to no avail.  “'This is another example of the governor essentially dismissing Central California as a flyover area,' said Assemblyman Jim Patterson, R-Fresno.'" A functioning advisory committee would have members from the Central Valley to funnel local names to the governor.

Accounting and Conflicts

In addition to geographical diversity, the Board needs demographic and intellectual diversity.  It needs a wider range of experience and perspectives.  If it had this, it could synthesize the expertise of a new member like Maria Anguiano into sophisticated policy deliberations rather that treating her accounting perspective on instruction as an override.  Unfortunately, as I'll explain, the latter is more likely with the current Board.

Anguinao's roots are in finance and accounting (Barclays Capital and Deloitte & Touche). Gov. Brown may have wanted her experience in financial statement analysis, which often seems to be lacking on the current Board. But she is also a well-known advocate of a kind of accounting known as Activity-Based Costing (ABC), which assesses the cost-effectiveness of any activity by breaking it down into its component inputs. ABC is preoccupied with instructional costs, which fellow advocates like William F. Massy, author of Reengineering the University, see as a serious burden that accounting must help reduce.  In his book, Massy names Anguinao as an important ABC champion, one who is bringing the ABC message to the University of California.   She has certainly brought the message to UC Riverside.  

In addition, ABC has been written into the state budget documents as one of the efficiencies the state expects the university to pursue. The Department of Finance (Budget Summary page 39) defines its purpose as providing

rich data for University leaders to better plan enrollment and determine which, and how, courses should be offered by understanding costs coupled with student outcomes. The Administration will continue to monitor the University’s experience in using the information.

The state defines efficiency here as financial managers guiding curricular planning with cost data.  Music department courses are more expensive than Sociology's, and under permanent austerity this is a continuous grinding issue. ABC could consult its component analyses to discover that some of music's costs come from very small group instrument training and the maintenance of practice rooms, not to mention tech costs of connecting students to the incredible world of sonic innovation.  This would be useful information for departments to have during their expert deliberations of instructional needs in the context of wider developments in the field.  But the state's model is that managers do the planning and deciding of "which, and how, courses should be offered."  As institutionalized in budget documents, ABC can be used to compromise faculty's academic freedom to decide curriculum by presenting "there is no alternative" budgetary quantifications.  I'm not saying this need actually happen, but it is more likely if the Board is not made aware of the issue and if the University community does not discuss it.

A bit more on this topic: this blog has always called for more rather than less financial information, so ABC would seem to fit with that.  But our model is that open deliberation on educational goals should drive budgeting, and ABC, like audit practice in general (a classic work can be purchased here), does the reverse; in the language of ABC slide 18, it "allocates direct [and indirect] costs to programs using cost driver based allocation." Suffice to say for the moment that its normal practice is that components of education (course development, advising, etc.) are benchmarked, standardized across disciplines and institutions, put into competition with each other, and, in general, cut: the core goal of ABC is not budgetary transparency but cost reduction.  For example, ABC as an audit technique creates benchmarks from average costs that then implicitly question any cost that is above the benchmark.  The audit question is not, "How can we make Music instruction more effective in pursuing educational goals XYZ, but "Why does Music cost so much?"

One more twist on this of the kind that university Boards should deeply grasp. ABC's claim to fame is to unbundle costs of core activities at traditional universities. It is also possible to unbundle the university itself.  This is a primary goal of market actors in the higher ed space, who must unbundle traditional institutions to profit from the components they vend: competency-based learning, learning management systems, and the like (see e-learning guru George Siemens's short summary, or most of Audrey Watters).  Unbundling reflects a consensus in the tech and finance worlds that the future of higher education is not a system of thousands of independent institutions but
a few large, concentrated players that will provide infrastructure, platforms, and services to support a wide array of fragmented niche providers of content, formats, environments, and experiences.
I'm citing a post on Deloitte Consulting's "university press" (that thanks Maria Anguilano).

An example of unbundling in practice is the Minerva Project, which is trying to replace the liberal arts college by dumping research and permanent faculty and offering instruction that is entirely on line (there are some good overviews out there, with much detail in the The Atlantic's 2014 piece). Minerva's founder, Ben Nelson, has some good ideas, particularly about correcting the weakness of the cafeteria curriculum on offer at all standard universities (see the Ed Surge interview)

At the same time, Minerva charges $28,000 a year (including room and board) for online contact with a course delivery platform.  As I discuss at length in The Great Mistake and elsewhere, this defies two centuries of research on the practices of deep learning in the context of the university as a unique institution focused on knowledge creation and full social development.  Minerva's ludicrous selectivity (158 admits from 16,000 applicants) means that learning success should be largely attributed to the ferocious cherry-picking of the admits, again in defiance of the "learning gain" movement. Nelson also seeks to make the for-profit college the normal mode of higher education delivery.   Nelson's current Chief Financial Officer is Maria Anguiano.

Often boards appoint members who bring relevant expertise and new perspectives, and Anguiano qualifies on both counts.  Good debates could follow--if and only if she were to join a Board of Regents with many experts in education or at least diligent executive learners who engage in deliberative reflection.  She could advocate for her controversial accounting technique that among other things helps accounting override intellectual and educational considerations, explain why she thinks it does more good than harm, and hear informed criticisms.

The same might go for the conflict of interest raised by having a regent also serve in a senior management position at a for-profit college that benefits directly from the declining performance of the public university sector, including UC. Universities generally manage conflicts of interest rather than eliminating them, but the conflict needs to be out in the open so that it can inform Board evaluations of Anguiano's statements.

There should also be a decent balance of intellectual power on the Board itself. This is especially important in the Silicon State where everything public is presumed guilty until proven innocent, especially universities.  We've already had the governor-mandated MOOC fiasco at SJSU, where Valley salesmanship outstripped research, with the product being deemed "crap" by its own creator (Udacity's Sebastian Thrun) once the research was actually done.  California has a history of business titans imposing their models with little public review or consent.  The 1974 reforms were part of yet another attempt to manage business conflicts with the public sphere.

Trying to Enforce Existing Law, 1991-2011

Some observers have previously pointed out this failure of Board of Regents appointments to comply with the state constitution.  UC Berkeley physics emeritus professor Charles Schwartz proposed corrections in the course of a report on the Board's financial interests, back in 1991.

Nothing changed, and twenty years later the Council of UC Faculty Associations (CUCFA) invoked the state constitution in opposing Gov. Arnold Schwarzenegger's lame-duck appointment of pension hawk David Crane. Berkeley Faculty Association member Christine Rosen laid out the problems in a letter to UC Berkeley's Daily Cal (text removed). It summarized three safeguards that multiple governors and Senate Rules committees have ignored:

California's Constitution foresaw that wealth and political connections could contaminate the Board of Regents. That is why Article 9 section 9-e defines a twelve member advisory committee that the Governor must consult when naming a candidate for Regent. This process was not followed in Governor Schwarzenegger's 11th hour appointment of Crane.  
California's Constitution also provides that "Regents shall be able persons broadly reflective of the economic, cultural, and social diversity of the State" (Article 9 section 9-d). But there is no one on the board with experience in what the university does: higher education, research and hospitals. Where are the professors, the scientists, the doctors? Where are the humanists and public intellectuals? 
Governor Brown should rescind Schwarzenegger's improper appointment of David Crane and utilize the Constitutionally mandated procedure to select a better candidate. If he won't do this, the Senate Rules committee - which by law must confirm appointed Regents - should reject Crane and demand that the Governor nominate a better candidate using the legally required method.

As it happened, Crane served a year on the Board as a designate and then had to step down when the Senate Rules committee failed to confirm him.  This does sometimes happen. 

Rosen's call for professionals and humanists on the Board should be taken seriously.  It was in effect a request for representatives of the ancient and continuously-evolving philosophy of higher learning, which sees it as a public good.  A fully constituted Board of Regents would see commercialization and the dominance of UC "businesses" as often in conflict with higher learning, and discuss policies of rebalancing that are not set in advance by our state's tech predestinarians.  

I'm putting words in her mouth.  Rosen did argue that Crane would be yet another addition to the Board's finance bloc that had not shown much support for the educational core. But the arguments for compliance with the state's constitution are independent of a particular appointee's expertise and views. Boards are always a mixed bag, and our current UC Board of Regents is arguably better and more diverse than most of its predecessors.  Eloy Oakley is an experienced, formidable community college administrator with meaningful social justice goals; John Pérez has been a strong advocate for access and affordability; Eddie Island has often spoken on behalf of low-income students and students of color; Hadi Makarechian does his financial homework and asks real questions about budgets and capital project costs.  But this is irrelevant to the legal question: to quote an SF Chroncile editorial, the governor should follow the law.

Trying to Enforce Existing Law, 2017

CUCFA's June 19 letter to the state Senate president says that the slant of the Board towards business elites has biased policy in favor of raising tuition and against state funding.
The fact that [The Board of Regents] is dominated by wealthy interests for whom the steadily increasing costs would not be a practical problem may help explain the lack of urgency in building the confidence of the public and policymakers needed to restore tuition-free education at UC.
Sociologically, this is likely.   There is now solid empirical research showing that elected representatives reflect donor and financial network influence rather than the public's policy preferences. This applies to the UC Regents, who are appointed largely from donor circles.

The letter continues:
Therefore, we respectfully request that the Rules Committee enforce the California Constitution by immediately rejecting (without prejudice) the Governor’s nominees.[4] Regent terms begin as soon as the Governor nominates them, so these improperly nominated Regents can vote on issues at the upcoming Regent’s meeting unless the Senate Rules Committee acts quickly to reject them. 
We also request that the Constitutionally-required advisory committee be more than a pro forma process and that the Senate state that it will only consider Regent nominees that have been vetted through an open public process. Meetings should be conducted in accordance with the Bagley-Keene Act, including proper public notices of meetings with opportunities for public comment. The rejection of the current slate should not preclude these candidates from being considered in the future via the proper advisory committee process.

It would be great to start this month's appointment process all over again: we'd get back in line with the state constitution's procedure, have a more diverse group of nominees, and have the kind of deliberation that would raise our collective IQ about UC's future.   Gov. Brown could propose at least one regent form the Central Valley while increasing the Board's level of educational expertise. Some of the current Four could be renominated--if they helped Board thinking move beyond Hollywood, FIRE (fire, insurance, real estate), and tech.

There's a deep issue at stake here.  The university is now immersed in a pragmatic policy discourse that the philosopher Peter Sloterdijk would describe as "cynical reason." It's a kind of functionalist management of conflicts that focuses on short term fixes rather than long term goals while assuming there's nothing we can do about this.  It is in contradiction with the University's historical destiny--just to use a language pitied by cynical reason.  It is also the modality of political burnout and dynasties in decline.

A good example is all California governors blithely ignoring the constitutional requirements for appointments to the Board of Regents, with the consent of the university's officials.  We don't need to have such low standards for our officials, and we mustn't.
Posted by Chris Newfield | Comments: 9

Friday, May 19, 2017

Friday, May 19, 2017
This week's UC Regents meeting is the tenth anniversary of a Senate First and, so far, a Senate last--a direct presentation to the UC Regents of a faculty view of the budget. In May 2007, Senate chair John Oakley and UC Provost Rory Hume arranged for me as the chair of UCPB to present the budgetary conclusions of what came to be known as the Futures Report. It had, over a two year period, been researched and written by UCPB, approved by Academic Council, and submitted to President Bob Dynes for transmission to the board. John and I spent a fair amount of time with Rory boiling the report down to the simplest possible slide deck for our 15 minutes. We also picked the lowest-tech slide design we could find, to symbolize our humble professorial communion with the facts.

The whole project emerged from a period when it seemed that UC was capable of choosing its own path. It also seems that the faculty as a whole would play a meaningful part in that complex choice. I had hoped it would be the first of a series of regular faculty presentations to the regents, because I thought then and now that a real dialogue would ease the governance and budgetary problems that continue to haunt the University. Here's how it went.

I enthused at the start that there's a reason we want to see a steady upward trend of state funding: that trend had enacted the idea of 8 or 10 research universities linked together in an integrated system, which meant that top-quality education would not just go to the top .1% or 1% but to 10% and more. Strong public funding, I said, explained why UC wasn't SUNY or the UNC or Texas system with a couple of flagships and then a miscellany of varied campuses that conducted little or no research.

Since public funding built the thing, why had funding been cut in two multi-year rounds (1992-1995 and then again 2002-05--we hadn't yet experienced the recent cuts that began the year after the presentation). Did the cuts just reflect a business cycle?

This is a slide that UCOP had presented to regents at least once a year. It said yes, it's up and down with a trend of state investment that is always up. But the slide was misleading.

By erosion, we meant deterioration in core undergraduate instruction and services, deterioration in research climate and infrastructure, and, appealing to the board's perennial concern with status, loss of top applicants to graduate and undergraduate programs and of faculty. Grad program admissions had already become a prominent worry in the 2002-05 cut cycle.

Still working with UCOP materials, we pointed out a

But then we brought in our own research. It showed

This is a measure of the state's overall financial resources available to support higher education: it's what people actually earn, in part because of their access to education. Between 1990 and 2005, this had been cut 35% in real dollars. Sacramento had basically reduced UC's share of state income by half in the 20 years preceding the third round of cuts that would begin in 2009. This is common sense now, but a secular trend of disinvestment seemed to come as news to the regents and to most of UCOP ten years ago.

We had tried for a while to get detailed budgetary data from UCOP, without success. So UCPB had decided to go ahead and do our own research with whatever was publicly available, and then ask UCOP officials to confirm or deny.

"Core" budget was a kind of breakthrough, because it carved out massive UC revenues that don't much to do with campus education.

So it leaves out:

UCOP adopted this distinction in its budget for current operations during the Yudof period. "Carry offsetting expenses" was a muted way of saying that many of these activities run direct net losses for the university, even if they have indirect gains for the university later (and direct gains for outside sponsors and society as a whole). To keep things simple, we didn't want to open that can of worms. We gave up an important opportunity, but I'd thought my Senate successors wouldcome back to the regents with followup material later on.

Our report was called "The Futures Report" because we projected costs for several different budget pathways. 

These three scenarios, plus a fourth called The Michigan Model (more on that in a minute), were compared to a benchmark that tracked the growth of state personal income. The idea was that UC's benchmark would be "growing with the state," neither more nor less, meaning we wouldn't be playing the "make up for cuts" game as we are still doing now. The established pattern was Lost Decade-- which has happened again.

The Higher Education Compact with the Schwarzenegger administration was announced in May 2004. It accepted previous state funding cuts, promised state general fund increases of 3-4% per year, which it paired with tuition increases of 7-10% per year. It was a privatization prescription, because it shifted revenues from public to private sources.

But rather than critiquing the Compact as an undermining of the public good status of the university, we asked whether it would actually stabilize and sustain the university's finances. Here's what we found (validated by UCOP budget folks late in the drafting process):

The 3-4% annual increases, coming on the base of much larger previous cuts, would never restore the state share of core funds. This made the regents visibly unhappy.

And it got worse:

We were tragically right about this: any series of manageable tuition increases would not make up for state general fund cuts. I'll return to the point that this is still true, particularly now that no tuition increase is manageable for a large share of today's resident students:

The 2002-05 cuts increased the student share of core funds by 50 percent. (The post-2009 cuts doubled the student share on top of that.)

I dwelt on these next slides, which are the densest in the deck.

The failure of the vaunted Compact was a big deal.

Items 2 and 3 will make more sense with the following chart.

We decided this slide would be too complicated for the presentation so we left it out. The thin purple benchmark line represents UC "growing with the state" (UC's state funding rising at the same rate as state personal income). The black line represents a ramping up of state funding to rejoin the 2001 Pathway in the five years to follow the appearance of the report.

Number 3 (two slides back) refers to a restoration to 1990 levels of high state funding and low tuition (the green line in the preceding slide that ends up at over $6 billion per year in state funding). That is twice what UC gets today. But it is merely the same share that UC had in 1990. We thought it would be easier for the state to get its head around 2001 than around the full "master plan" funding model.
On to the next question: what is to be done?

"Research is costly" means research runs net losses, not profits. Private fundraising works on the margins for selected programs, but not to replace lost operating funds for public good activities like high quality instruction and its direct admin support that donors assume the state and students pay for.

The only great private revenue stream for operations is student tuition, at very high levels. This caused more unhappiness in the meeting.

The headline of the next slide makes me sad.

Ten years later we're at the same crossroads. 1990 is still completely out of reach. 2001 is more remote than ever. And starting in 2009, Sacramento dumped UC onto the red line in the chart above--a funding freeze, averaged over big cuts followed by partial annual recoveries. We called this the Michigan Model, in which the state disinvests and then the university hikes resident tuition and admits many more non-resident students (reducing racial diversity, class diversity and, in Michigan's case, national ranking). In nominal dollars (uncorrected for inflation), UC's general fund in 2017-18 will be the same as it was in 2007-08, somewhat above $3 billion.

The takeaways were obvious to us.

The Senate was at the time solidly in favor of rebuilding public funding rather than raising tuition or increasing non-resident student tuition revenues. We were of course deeply worried that the state had gotten used to giving UC and CSU less and would be happy to let us raise tuition instead (and then campaign against us for that). But it didn't stop us from stressing the logical budget necessity of public funding.

How did the regents respond in the 3 minutes allotted to discussion? They didn't disagree with this last slide, but expressed unhappiness with the the budget conclusions. Regent Marcus said, "we need solutions, not all this negativity." I replied, "we're offering analysis; policymaking is the regents' role." A couple of exchanges later and our time was up. The next topic was the national laboratories, students that were hunger-striking against nuclear weapons came in and chained themselves to tables, Regent Pattiz invited them to go have a nice lunch which further fanned the flames, the police arrived and hauled them out, and that was the end of the faculty view of the UC budget.

Fast forward to this week in May 2017. Many budgets have come and gone, and we've written dozens and dozens of budget posts, many comparing actual state funding to the personal income benchmark (with cheery titles like "Gov Gives UC Just About Nothing" and "The Old State Funding Model is Dead") and calling for faculty and UCOP to put out the strongest possible proposals to support full UC quality-- to budget the full costs of a Real UC and endlessly explain its educational necessity.

What we are living through now is basically one half of the Compact that Arnold abrogated in 2008-09: we got the famous third round of double digit state cuts, followed by the 3-4 percent annual increases that don't really keep up with higher ed cost inflation, but not the annual tuition increases. Like the Senate, we opposed the Compact for increasing tuition at twice the rate of state funding. This was, to repeat, the deliberate privatization of core revenue streams. And yet the size of the combined revenue streams was in the ballpark of UC need, while our current Half-Compact has produced permanent austerity and structural deficits.

Today, UC's combined tuition and state funding revenues are below their 2007-08 levels. Net tuition has in my calculations gone from about $1.57 billion to $3 billion (p 224) in ten years, for an increase in tuition income of $1.45 billion when adjusted for ten-year inflation (20 percent). Then there's state funding. When we adjust it for inflation and for new capital and bond servicing costs now deducted from the state funds) at around 13 percent of the total general fund allocation, we find that per student state funding wasn't even flat for ten years: it declined by one third, meaning that about $1 billion less in adjusted dollars was available for operations. If we correct for the decade's enrollment growth of nearly 20 percent, per student general funding is one fifth less than that minus 1/3rd, which effectively wipes out all of the net tuition gains. Tuition increases have not made up for any of the real dollar declines in state funding, even after six years of supposed recovery.

Remember too that this is before we throw in the pension wild card. At the current level of a 15 percent employer share of a payroll that is 47% of $31.5 billion in total UC expenditures (p 39), this is $2.2 billion annual cost for UC overall that it did not pay in 2007-08. Even if most of the employer cost of the pension is incurred and funded by non-state payroll (medical center and national laboratory staff, etc), and  the state share is one-third of the total, the campuses need to find over $700 million a year from core funds that are mostly state general fund and student tuition.  Having gone back and forth with one UC budget insider about the share of state funding that covers the annual UC employer contribution, I think it's reasonable to conclude that the General Fund allocation for this expense has gone from $0 in 2007-08 to $200-300 million in 2017-18.

In short, we've just lived through another Lost Decade of funding, and through a large net operating funding reduction.  UC is unfortunately a textbook case of the decline cycle I analyze in The Great Mistake, which is created by divergence from public-good funding philosophies. 

You might be interested in our new report, The $48 Fix, which shows that the 2001 Pathway is still in easy financial reach--but strictly on a public good basis.
Posted by Chris Newfield | Comments: 2