Category: governor

Tops

The governor is to propose his budget for 2014-15 this coming Friday.  And although the budget is baked by now, this headline from the LA Now blog of the LA Times can’t hurt as the budget process proceeds between now and June.  The guv loves online ed and he can’t give the money to USC. But UCLA would be happy to receive it.

Full article at http://www.latimes.com/local/lanow/la-me-ln-college-online-20140107,0,7388397.story

Nothing like being the top:
[youtube http://www.youtube.com/watch?v=Vc7152gQK-U?feature=player_detailpage]

Neutral

Proponents of the  proposed pension/retiree health care initiative (that would cover UC) were afraid the attorney general would come up with a nasty title and summary.  It doesn’t seem to have happened, however.  Other than the references to teachers, nurses, and peace officers (the public’s favorite public employees), it is pretty neutral.  To the extent there is mention of costs, the references come from the earlier Legislative Analyst’s Office (LAO) report.  Below is the title and summary:

January 6, 2014
Initiative 13-0043
The Attorney General of California has prepared the following title and summary of the chief purpose and points of the proposed measure: 
PUBLIC EMPLOYEES. PENSION AND RETIREE HEALTHCARE BENEFITS. INITIATIVE CONSTITUTIONAL AMENDMENT. 
Eliminates constitutional protections for vested pension and retiree healthcare benefits for current public employees, including teachers, nurses, and peace officers, for future work performed. Permits government employers to reduce employee benefits and increase employee contributions for future work if retirement plans are substantially underfunded or government employer declares fiscal emergency. Requires government employers whose pension or retiree healthcare plans are less than 80 percent funded to prepare a stabilization report specifying non-binding actions designed to achieve 100 percent funding within 15 years.
Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Potential net reduction of hundreds of millions to billions of dollars per year in state and local government costs. Net savings—emerging over time—would depend on how much governments reduce retirement benefits and increase salary and other benefits. Increased annual costs—potentially in the hundreds of millions to billions of dollars—over the next two decades for those state and local governments choosing to increase contributions for unfunded liabilities, more than offset by retirement cost savings in future decades. Increased annual costs to state and local governments to develop retirement system funding reports and to modify procedures and information technology. Costs could exceed tens of millions of dollars initially, but would decline in future years.

Does this official summary mean that the governor is going to be neutral?  Who knows?  One member of the anti-pension crowd managed to slam the governor’s high-speed train today in the NY Times – which might not endear him to Brown:

High-Speed Train in California Is Caught in a Political Storm 
By Adam Nagourney

…Joe Nation, a professor of public policy at Stanford University and a critic of the plan, said Mr. Brown would have to grapple with this decline in support, which he argued reflected voters’ growing doubts about the basic competence of government. “Obamacare has leached over into this,” Mr. Nation said. “You have people saying, ‘The federal government that can’t build a website — how can we expect them to build a multibillion-dollar train?’ ”…

Full article at http://www.nytimes.com/2014/01/07/us/high-speed-train-in-california-is-caught-in-a-political-storm.html

As we continue to note, UC’s interest is basically not to be included.  So far, as per above, that hasn’t happened.

UPDATE: Mayor Reed of San Jose – the front man for the initiative – isn’t happy with the wording. The union group opposing the initiative isn’t completely happy, either. See http://www.sacbee.com/2014/01/06/6051649/california-attorney-general-clears.html

Q&A

The Contra Costa Times ran an interview with UC president Napolitano that was published yesterday.  But apparently the interview occurred in late 2013.  Here are the questions:

Q: One of your first proposals was to make tuition rates more predictable. What might that look like?

Q: At the last UC regents meeting, Gov. Jerry Brown said UC had slim chances of securing additional state funding, with all of the competing needs in Sacramento. What did you make of that?

Q: Were you surprised by the low graduation rates for some student-athletes at Cal? (UC Berkeley’s football team had the lowest graduation rate of any major program in the NCAA.) 

Q: One of your initiatives is to make it simpler for community college students to transfer to UC. What are your impressions of that system?

Q: I’ve read that you were surprised by the long-standing tension between UC and some labor groups… What have you done to change that?   

Q: You’ve been back to Washington. What points are you trying to press with people there in terms of higher education policy or funding? 

Q: Did you expect you would have protesters at your public appearances?

The answers can be found in http://www.contracostatimes.com/news/ci_24850169/napolitano-uc-chief-eyes-tuition-sports-transfer-students   

The First (and Only?) Budget Leak

Only a few days ago, we noted that it is traditional that as the date of the official unveiling of the governor’s budget proposal approaches, bits of it are leaked out.  We noted that as of that time, there hadn’t been any leaks, so maybe we would depart from tradition.  But now we have a leak.  The governor wants a ballot proposition mandating a rainy day fund.  From the LA Times:

Gov. Jerry Brown will join the push for a new ballot measure to help California stockpile cash as a buffer against future recessions, according to two Capitol officials. The proposed measure, which would need approval from two-thirds of the Legislature before it could be presented to voters in November, would siphon off some tax revenue and channel it into a special savings account. If successful, the account could mitigate the need for deep spending cuts during economic downturns and help California shed its reputation as a financial roller coaster.The plan, put forward by Assembly Speaker John A. Pérez (D-Los Angeles) last May, will be included in Brown’s upcoming budget proposal, the officials said. They declined to speak publicly before the governor’s announcement, scheduled for Friday…  The measure proposed by Pérez would replace a plan supported by Republicans and passed by the Legislature in 2010 but delayed until next November’s ballot. Although that plan passed with bipartisan support three years ago, Democrats now say it is flawed because it would function as a spending cap, something they have opposed.

Full story at  http://www.latimes.com/local/political/la-me-pc-california-jerry-brown-budget-rainy-day-20140104,0,4066322.story

Note that as long as the Dems can hold on to their two-thirds representation in the legislature, they can put anything on the ballot they want.  Republicans might be annoyed that a plan they agreed to in 2010 was being overridden.  But they couldn’t prevent it.  However, crafting a rainy day fund that can’t be evaded is trickier than it might seem.  There have been various attempts over the years.  Formulas are easy to propose, and easy to circumvent.  Without any formula in place, Brown in his first iteration as governor had a huge reserve.  But it was so big that it is often seen as a catalyst for Prop 13 of 1978.  Property tax bills were shooting up and voters were angry about the state having a huge reserve at the same time (even though property taxes were local, not state, affairs).  So inadvertent consequences can occur.

In any event, we now have a pre-budget leak.  Will there be others?

UPDATE: Here is a second leak.  (Cap-and-trade funds for high-speed rail)
http://www.latimes.com/local/political/la-me-pc-jerry-brown-budget-highspeed-rail-cap-and-trade-20140105,0,6294114.story

Upcoming Events in January

Under the state constitution, Governor Brown will release his budget proposal for 2014-15 at the end of next week.  In the past, bits and pieces were often leaked to the news media ahead of the formal announcement.  So far, that hasn’t happened – which might just mean that with the current budgetary calm, there is nothing shocking to leak, including about the UC budget.  There will also be a “state of the state” address to the legislature by the governor which will touch on whatever the governor has in mind – who knows? – in this election year.

The UC Regents will be meeting Jan. 21-23.  However, the agenda items are not yet posted and probably won’t be posted until a week or so before the meeting.

As we have noted in earlier posts, Chancellor Block will be under pressure to say something about the Israel boycott undertaken by a group called the American Studies Assn.  Other UC chancellors and the UC prez have come out against the boycott as have heads of other universities.  See http://uclafacultyassociation.blogspot.com/2013/12/clock-is-ticking-towards-uclas.html. The latest news on all of that – as of today – is at http://www.insidehighered.com/news/2014/01/02/presidents-denounce-academic-boycott-israel-some-campuses-faculty-and-presidents.  One can imagine the issue coming up at the Regents since the student-regent-elect has pushed for Israel divestment (not the same thing as an academic boycott).

That’s the outlook but you never know what can happen:
[youtube http://www.youtube.com/watch?v=nsSbhdo0kQI?feature=player_detailpage]

Events May Divert the Governor from MOOCs, etc., at the Regents in 2014

Jerry Brown will almost certainly be running for re-election in 2014.  It doesn’t look like there will be much of a contest but there will be at least some effort devoted to the campaign.

But apart from re-election, Brown is facing some “legacy” problems.  During his first iteration as governor, he wasn’t big – to say the least – on grand infrastructure, unlike his father Pat.  However, this time around, there is the high-speed rail project and the water tunnel project, both grand and expensive.  These projects are analogs to his dad’s freeways and state water project. 

The high speed rail is running into problems of financing and negative court rulings.  The water project also has financing and environmental obstacles.  Currently, dry weather is causing water rationing in the Sacramento area.  But it is unclear that the proposed water tunnels would address that issue.  Indeed, the drought could raise the issue – very sensitive in the Bay Area – of diverting water to southern California.

Of course, the third legacy of Father Pat was higher ed expansion in the form of the Master Plan.  But we are not going to be building more campuses of UC or CSU in the immediate future.  And tuition isn’t going up in an election year.

So UC may get a break from gubernatorial attention in 2014.  Brown wouldn’t want his rail and other plans to end like this:

Yesterday’s news

Christmas day tends to be a slow news day.  However, for those who didn’t see it, the LA Times carried a front page story about UC’s online offerings which allow cross-campus credits.  You can find the article at:

http://www.latimes.com/nation/la-me-uc-online-20131222,0,6798231.story

Blog readers will be familiar with these offerings.  We noted in a prior post that UCLA seems to be a taker rather than a giver in this endeavor.  That is, other campuses’ online courses are available to UCLA students.  But UCLA is not offering courses to the other campuses.  Berkeley, Irvine, Davis, and Riverside seem to be the offerers.  

Now, how about next year’s UC budget, governor?  The headline above should make you happy:
[youtube http://www.youtube.com/watch?v=2U-rBZREQMw?feature=player_detailpage]

Wait and See

We posted earlier about general plans for the state budget by the legislative Democrats which promise “more” for higher ed and UC than the Legislative Analyst’s projections seemed to imply.  It is unclear if there is more than what the governor will propose in early January.

Below are two slides from a presentation by the legislative Democrats.  But wait and see is probably the best advice at this moment.  Note that the projections all assume uninterrupted economic expansion which is hard to guarantee.

You can find the full set of slides at http://asmdc.org/issues/budget-blueprint/images/2014-15-blueprint-for-a-responsible-budget-v7cw.pdf

We Got a Mention

Maybe not so fast

An earlier post on this blog described the recent Legislative Analyst’s Office (LAO) report that projected that, with a combination of continued economic growth and Prop 30 revenues while they are in effect, California’s “structural” deficit had ended.  We also noted that included in the LAO projections was what me termed an ungenerous assumption about spending on UC.  We have also been posting excerpts from Regents meetings in which the governor and Speaker Pérez have also made ungenerous remarks.  [Pérez, however, is now in the race for state controller and indicated that a transition to a new speaker should take place before his assembly term ends.]  The LAO projected ongoing budget surpluses for years to come which has legislative Democrats planning spending increases.  The TV news clip below gives you the flavor.  And UC is mentioned – by Pérez – as a place to spend added monies.

Brown, however, has pictured himself at Regents meetings and elsewhere as the budgetary gatekeeper.  It used to be said that the function of the chair of the Federal Reserve was to take away the punchbowl just as the party got going.  Brown sees himself in such a role.  So don’t plan on spending the extra funding just yet.

It might be noted that the trough of the Great Recession occurred in 2009 and we are coming on to 2014.  The added years projected by the LAO assume an uninterrupted expansion continues.  There are no guarantees and no forecaster would presume to be able to tell what might occur in, say, 2016 with regard to economic fluctuations.  As many have noted, the state’s revenue stream is highly dependent on the personal income tax and on higher-end taxpayers, making it volatile and sensitive to the general business cycle and financial market ups and downs..

Lessons from Berkeley’s White Elephant Stadium for UCLA, the Regents, and UC?

People keep noticing Berkeley’s White Elephant money-draining stadium – one of the grand capital projects that the Regents routinely approve based on pretty slides and business plans offered by the campuses.  Peter Schrag in the San Francisco Chronicle today ties the low graduation rates of Berkeley athletes with the stadium:

…Fueling the… issue is the chronic matter of cost – what the university kicks in to the sports program – and what someone called “its gold plated” spending. Brian Barsky, a Berkeley computer science professor and vocal critic of the athletics program, says between 2003 and 2011, athletics “drained campus coffers of more than $88 million that could have been used instead to support the university’s core mission.” Cummins and Hextrum talk about “accumulating deficits over nearly 20 years totaling some $170 million at a time when the campus faced substantial staff layoffs and furloughs.” [Sandy Barbour, Berkeley’s director of athletics,] claims those numbers are flat wrong. With the exception of one year, she said, there have been no deficits. But there’s no question that its football and basketball coaches, like other big time coaches, earn 10 times as much as the average full professor, or that Barbour gets paid more than the chancellor, or that the sports program isn’t self-supporting. More important still is the huge debt UC Berkeley faces for the cost of the recent rebuilding of Memorial Stadium and the construction of the adjacent “Student-Athlete High Performance Center” – all together totaling more than $450 million, some of it to be paid by 100-year “century” bonds. All told, including interest, those facilities will eventually cost $1.25 billion. Paying it off depends on football. And given the dismal records of the past two seasons and the disappointing sales of expensive long-term rights to seats in the stadium – originally priced at $225,000 apiece – that were supposed to help retire the bonds, a strategy since supplemented by a “more diversified approach,” that’s hardly a sure thing. What is a sure thing is that Berkeley has mortgaged itself in perpetuity to the success of its football team.

Full column at www.sacbee.com/2013/12/01/5953595/peter-schrag-has-uc-berkeley-mortgaged.html

There are lessons to be learned here by UCLA [the Grand Hotel], the Regents, and all the campuses.  But will there be lessons taken?  So far, however, there is little sign of such learning.  If Gov. Brown is as concerned as he says he is about dealing with UC budget affairs, he might consider attending meetings of the Regents’ Committee on Grounds and Buildings and maybe putting some state auditors to work on analyzing what has been approved over the past few years.

Read more here: http://www.sacbee.com/2013/12/01/5953595/peter-schrag-has-uc-berkeley-mortgaged.html#mi_rss=Opinion#storylink=cpy