News

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Governor’s Press Conference on the Budget Focuses on Public Pensions

Byuclafaculty

The legislative session ended August 31 with votes on Democratic and Republican versions of the budget that were known in advance not to have sufficient votes. Two thirds is required to pass a budget although there will be a proposition on the November ballot to reduce the requirement to a simple majority. Today, the governor held a press conference. Much of it was devoted to his insistence that a budget deal cannot be reached unless there is pension reform. A link to the press conference is provided below. However, the key point for UC is that we remain in danger…

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More Moving Towards Michigan

Byuclafaculty

Money may not grow on trees. But under the so-called Michigan Model – after a plan adopted by the University of Michigan – out of state students are an attractive substitute for a money tree because they pay full tuition. UC-Berkeley has already headed in the direction of pulling in more out-of-staters. Now it is reported that UC as a whole is likely to be moving in that direction under a recommendation of the Committee on the Future. From the San Francisco Chronicle (Excerpt): UC sees money in out-of-state students Wednesday, September 1, 2010, Nanette Asimov Ask any University of…

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A Hidden Issue in the PEB Report (In Plain Sight)

Byuclafaculty

I have been posting about the recently-released Post-Employment Benefits Task Force report. If you go to the master website where the report and related documents are available, and if you scroll way down to the bottom, you will find the dissenting minority report. It is almost lost in the clutter but you can go directly there at http://universityofcalifornia.edu/sites/ucrpfuture/files/2010/08/peb_dissenting_082510.pdf On page 6 of that dissenting report, you will find a seemingly-technical discussion entitled “Is There a Need for Risk Adjustment in the Total Remuneration Study?” Don’t mistake that section for a mere dispute among pension experts. UC has a defined-benefit (DB)…

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Whitman Radio Ad Proposes Transfer of $1 Billion from Welfare to Higher Ed

Byuclafaculty

The latest radio ad from gubernatorial candidate Meg Whitman proposes adding $1 billion to the budget for UC and CSU. The money is to be obtained from reductions in welfare spending by tightening up the welfare program. Click on the video at the bottom of this post (the big round circle in the center) to hear the ad. Joe Mathews, author of the Schwarzenegger bio book, “The People’s Machine,” critiques the ad at http://www.nbclosangeles.com/blogs/prop-zero/A-Meg-Idea-That-Doesnt-Add-Up-101817413.html Excerpt from Mathews: Meg Whitman’s new radio ad features what sounds like a good idea: Take $1 billion from what she describes as California’s bloated welfare…

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The Daily Californian: UC Struggles to Fill Multi-Billion Dollar Pension Deficit

Byuclafaculty

I couldn’t find any write-ups on the Post-Employment Benefits Task Force report in the press so far, including in the Daily Bruin. However, UC-Berkeley student paper does have a write-up with the graph above as part of the article. Note that the article correctly identifies the long contribution holiday as the major source of the underfunding problem. For the text, see below: The Daily Californian UC Struggles to Fill Multi-Billion Dollar Pension Deficit By Jordan Bach-Lombardo and Javier Panzar Monday, August 30, 2010 http://www.dailycal.org/article/110146/uc_struggles_to_fill_multi-billion_dollar_pension_ A decision made nearly 20 years ago to stop paying into the University of California’s pension…

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Texas Goes for the Gold as an Investment; UC Is Unlikely to Do So

Byuclafaculty

Inside Higher Ed reports that the University of Texas is investing part of its portfolio in gold, ostensibly as a hedge against inflation. It is unlikely that UC will follow that route. As the article notes, a possible explanation for the U of Texas decision is the idea favored in conservative circles – and particularly enhanced by Glenn Beck’s promotion of gold sales on Fox – that the US economy is about to experience a wave of inflation. There is in fact an indicator of what financial markets expect in the way of inflation over the next decade. The difference…

Faculty from UCLA and Other Universities Removed from Environmental Pollution Panel

Byuclafaculty

The online service California Watch reports that several faculty from UCLA, other UCs, USC, and Stanford have been removed from a state environmental panel that identifies toxic substances. The full report is at http://www.californiawatch.org/watchblog/after-warning-about-toxic-farm-chemical-scientific-panel-gutted-4332 Excerpts: Five out of nine members of a scientific panel that advises the state on toxic chemicals have been fired in recent weeks, following disputes with the chemical industry and a conservative group that targets environmental laws… Among the dismissed members is panel chairman John Froines, who also heads the Department of Environmental Health Sciences at UCLA’s School of Public Health. Froines has served on the…

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Reflections on Two-Tier Pay Plans

Byuclafaculty

The recent majority report of the UC Post-Employment Benefits Task Force (PEB) proposes a two-tier retirement plan and makes long-term projections about the financial implication for the pension plan. (See the earlier post for the majority and minority PEB reports.) Keep in mind that two-tier pay plans have a history of instability. Such plans were introduced in the 1980s when various unions signed concessionary contracts during that era. New hires who were under such contracts were offered lesser pay and benefits than incumbents. However, pressures soon began to arise to remove the perceived inequity as the new hires become a…

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UC Borrowing Absent a State Budget

Byuclafaculty

UC, CSU, community college chiefs plead for quick budget passage (Excerpts) Chancellors say that without a state budget, ‘We are operating with a blindfold on.’ The delay has already forced campuses to borrow money and threatened some students’ enrollment and financial aid. By Larry Gordon, Los Angeles Times August 28, 2010 The leaders of California’s three systems of public higher education made a joint plea Friday for quick passage of the much-delayed state budget, warning of negative consequences on campuses if the deadlock in Sacramento continues much longer… UC and Cal State in effect are lending lower-income students the financial…

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Post-Employment Benefits Task Force Report Now Available Including Academic Senate Dissent

Byuclafaculty

The long-awaited (long delayed?) Post-Employment Benefits Task Force report is now available. (See the earlier posting of a letter from President Yudof anticipating the report’s release.) The report – which is advisory to the president and regents – includes two-tier retirement options for new hires. There is also a “choice” option for current employees to enter the lower-tier (which raises some legal issues). A dissenting report by Academic Senate representatives is also included in the posting. All material can be found at http://www.universityofcalifornia.edu/news/ucrpfuture/emp_task.html