Faculty call for pause on budget & network security changes at UCLA

Over 250 UCLA faculty, including a large number of department chairs and center directors, have written Chancellor Block with a detailed critique of plans for administrative centralization. The letter follows earlier exchanges between department chairs and Executive Vice Chancellor/Provost Emily Carter and other top administrators. “Although we appreciated the fora that EVC/P Carter recently organized in response to an earlier letter requesting more time to evaluate the re-organization plans she is proposing, we continue to feel that there has been insufficient time or detail to evaluate their consequences and that we have not been adequately involved in the consultation process,” faculty told Block in an email copied to faculty. Faculty ask Block to delay implementation of the plans and distribute adequate documentation so faculty can be fully informed.

The letter caps off several months of back-and-forth debate between department chairs and various senior administrators over IT centralization and the so-called new “Bruin Budget Model.” Earlier in the year, administrators circulated plans for a reorganization of campus networks authored by outside consultants that called for a new “Hub and Spoke” model that department chairs fear will result in loss of staff and poor service to faculty and departments. The faculty letter also criticizes plans for network centralization and security, noting that distributed networks can provide better security and central networks are a more attractive target for hackers.

Faculty likewise panned the proposed Bruin Budget (BBM) model as one that would cement already existing campus inequalities while decreasing transparency over campus spending priorities. BBM is an effort to move UCLA into something like activity-based budgeting, generate funds to central administration to support the initiatives of campus leaders, and control costs. Earlier in the quarter administrators delayed a proposed change to the way faculty raises are calculated after faculty expressed concern about the differential impact of the plan across faculty ranks. The complex budget plan was the subject of an online forum with EVC/P Carter and other senior managers in mid-May that was short on detail. In the words of the faculty letter:

Many of the answers at the faculty forum on the BBM held on 5/18/21 amounted to “trust us, we’ll get the answer right eventually”. That trust simply does not exist. Oversight by faculty from across the University and the diversity of roles that faculty serve would help ensure the integrity of the process with regards to supporting the University’s core mission.

Faculty are asking campus leaders to delay implementation of the budget model, which was intended to go into effect on July 1, 2021.

Read the full letter here.

Austerity looms. What next?

The deepening pandemic depression is going to have a profound impact on the University of California budget. Unprecedented unemployment, lagging state revenue, and massive campus losses associated with remote learning make it clear that we are looking at a replay of the 2008 crisis, at least. To stay up to date on the growing crisis, Continue reading “Austerity looms. What next?” →

Tradition!

The Legislative Analyst’s Office (LAO) has issued a report on UC and CSU funding. LAO is usually viewed as a neutral agency. But it is a component of the legislature. So it tends to favor approaches that add to legislative control as opposed to, say, gubernatorial control. This report is no exception.

LAO seems to want to return to what it terms the “traditional” approach to funding, but with bells and whistles added to monitor legislative goals. The traditional approach seems to be one focused on undergraduate enrollment. But in fact the tradition – such as it is – has been to forget about tradition and cut the budget during state budget crises, in the knowledge that UC and CSU can raise tuition. Indeed, as the chart above indicates, these traditional deviations from tradition dominate tuition decisions.

The LAO is uncomfortable with the habit of the governor of just proposing dollar increases not linked to enrollment and then extracting some promises from the university to do this or that, e.g., to spend $10 million on online education.

It might be noted that since LAO chose to lump UC and CSU together, it might have discussed a sore point namely the fact that CSU, as a part of CalPERS, gets its pension costs taken care of by the state whereas the state likes to stand aloof from the UC pension and its costs.

You can read the report at http://lao.ca.gov/reports/2014/education/higher-ed-budgetary-practices/budgetary-practices-021114.pdf

In any case, there is much nostalgia for tradition, albeit with some uncertainty as to what that is. Sounds familiar!
[youtube http://www.youtube.com/watch?v=gRdfX7ut8gw?feature=player_detailpage]

Contemplating Tuition, Motherhood, and Apple Pie

Tuition is being studied up in Oakland by the UC prez, according to yesterday’s Daily Bruin:

…“I want tuition to be as low as possible, and I want it to be as predictable as possible,” Napolitano said at a UC Board of Regents meeting in November.

In a recent Google Hangout with students from various UC campuses, students asked Napolitano to talk about her current work in reforming the UC’s tuition policy. They also asked Napolitano how she plans to include student ideas in the reorganization of the tuition plan. Napolitano did not specify how student input would be considered, but maintained that it was important to the eventual decision.

(UC spokesperson Debra Klein said that) “The president believes strongly that, especially at a public university, tuition must be affordable for all students and their families.” …

Full story at http://dailybruin.com/2014/02/06/napolitano-works-on-revising-uc-tuition-policy/

The problem is simple to state. Within the state budget, the UC budget is the least protected. You can’t cut debt service. K-14 schools are insulated by Prop 98. The prisons are under quasi-federal jurisdiction due to overcrowding. Various social welfare programs are either somewhat constrained by federal rules or the legislature just doesn’t like to cut them. And the legislature knows that UC (and CSU) can pull the tuition lever. Legislators don’t have to touch the lever and can then blame the Regents. All the budget projections you see are based on having no economic downturn into the indefinite future. But someday there will be another. And, as numerous observers have pointed out, the state’s tax receipts are especially vulnerable due to heavy reliance on the progressive income tax and its dependence on the ups and downs of the incomes and capital gains of the top taxpayers.

This pie is pretty much baked.

Travel Focus Misses the Money Train

You may have seen the article in yesterday’s Daily Bruin about UCLA tightening up its rules on travel reimbursements. Why the tightening up?

…Public records documenting the travel expenses of the university’s top brass, obtained and published by the Center for Investigative Reporting in August, drew national scrutiny last summer for the luxurious travel accommodations of UCLA’s leadership, sometimes in violation of University policy. The accommodations and pricy travel arrangements bloated the university’s travel budget by hundreds of thousands of dollars…

Full story at http://dailybruin.com/2014/02/04/months-after-controversy-ucla-clarifies-travel-guidelines/

The problem with the original story is that it focuses on budget dust compared to the free-spending capital budget. There we are not talking about hundreds of thousands of dollars. We are talking about hundreds of millions and a Board of Regents incapable of evaluating and monitoring the endless flow. We are talking about the myth that if it isn’t state money, it doesn’t cost anything. You read about it here. Sadly, you won’t read about it anywhere else.

It’s hard to stop the real money train:

She Sure Didn’t Bumble Her Meeting with the Bee

UC prez Napolitano had a meeting with the editorial board of the Sacramento Bee recently and, evidently, said the right things:

Editorial: Janet Napolitano is showing a clear-eyed view of UC mission

By the Editorial Board

Published: Thursday, Jan. 16, 2014

UC President Janet Napolitano has her priorities for the university system in correct alignment; the question will be in the execution. In a visit to The Sacramento Bee’s editorial board on Wednesday, Napolitano showed she is a quick study…

Importantly, Napolitano was clear-eyed on the basic point that UC was “designed to build California,” and that its role in educating the children of California “has to be one of our primary missions.”

“We teach for California,” she said. “We research for the world.” …

Read more here: http://www.sacbee.com/2014/01/16/6075778/editorial-janet-napolitano-is.html?storylink=lingospot_related_articles#storylink=cpy

Full eidtorial at: http://www.sacbee.com/2014/01/16/6075778/editorial-janet-napolitano-is.html

And, also from the Bee, there is this article which pretty much echoes the official UC approach of saying nice things about the governor but asking for more:

Janet Napolitano on Wednesday called Gov. Jerry Brown’s recent budget outline a “good starting point” for higher education funding in California. Meeting with The Sacramento Bee’s editorial board, Napolitano did not explicitly call for more funds, but said: “We’ll have a discussion about what else can the university do and what other needs that we have.”…

Full story at http://www.sacbee.com/2014/01/15/6076136/napolitano-sees-browns-budget.html

We couldn’t bug the room where she met the Bee’s editors but it sounds like a total lovefest:

Read more here: http://www.sacbee.com/2014/01/15/6076136/napolitano-sees-browns-budget.html#storylink=cpy

Is there a Changing State Attitude Regarding the UC Pension? Reading Between the Lines

As blog readers will know, UC has had difficulties in getting the state to recognize that its pension liabilities were ultimately those of the state, just as CalPERS and CalSTRS liabilities are liabilities of the state. Thanks to the two-decade hiatus of contributions, the state seemed to forget about UC’s pension. However, there is beginning to be recognition that although you can say the pension is a liability of the Regents, in the end the Regents have no sources other than the state and tuition to deal with it.

We noted recently that in his budget document describing his proposal for 2014-15, the governor listed the UC pension and retiree health obligations along with those of other state plans. The Legislative Analyst’s Office (LAO), which at one time was adamant about the liability not belonging to the state, has not been repeating that position of late. Indeed, the LAO has just released its summary of the governor’s budget plan. It notes that the governor is trying to move to what can be seen as a block grant approach to UC (and CSU) funding, rather than one based on enrollments or particular programs. LAO complains that such an approach reduces control by the legislature. In citing examples of an alternative approach, the LAO says [page 30]:

For example, the state could allocate new funding for specific purposes such as a COLA, maintenance projects, or pension obligations.

You have to read between the lines to take this as a shift in attitude towards the UC pension. But LAO could have picked other examples.

The LAO document is at: http://lao.ca.gov/reports/2014/budget/overview/budget-overview-2014.pdf

Budget Leaks Turn into a Flood of Biblical Proportions

We noted in prior posts that there were some leaks of the governor’s proposed budget for 2014-15, which was supposed to be unveiled on Friday. The leaks turned into a flood of Biblical proportions when first the Sacramento Bee published some summary information about the budget yesterday, said to come from the actual budget that the Bee had obtained somehow. Then what appeared to be the budget “summary” – actually a document of 271 pages – appeared online. And then it was announced that the official unveiling would be today at 9 AM instead of tomorrow, confirming that what was online was the real thing.

At the moment, the unofficial/official budget is at:

http://www.aroundthecapitol.com/docs/CAbudget2014.pdf

Presumably, the official documentation will soon be on the Dept. of Finance website. The governor and his finance director generally are the presenters at the media event in which the budget is unveiled. (An advance leak/flood of this type and then a resulting hurried-up media event occurred once under Schwarzenegger.)

First, let’s start – based on what’s currently posted – with the UC news. Two versions of general fund payments to UC appear in the summary document. My guess is that the version with somewhat higher payments to UC included the debt service deal made with the state. (UC has a better credit rating than the state and can borrow at lower interest rates. UC assumed state debt for some past facility obligations and the refinancing saves the state some money.) Version 1 (page 35) shows a 5.7% increase over the current fiscal year; version 2 (page 37) shows a 5.5% increase. There is a lot of language about higher ed needing to be more efficient and innovative – a previous gubernatorial theme. The budget proposes a $50 million innovation fund for all three segments of higher ed to be controlled by a committee involving all three segments plus the Dept. of Finance. Alert #1: Some folks might get nervous about that type of curriculum intervention.

Alert #2: As prior leaks have indicated, there is a lot in the budget document about paying down debt. At one point, there is a chart (page 4) which includes the UC pension and retiree health care unfunded liabilities as part of state debt. This is a BIG DEAL since the Legislative Analyst keeps insisting that the UC retirement unfunded liability is not something for which the state should be considered liable. If the governor and the Dept. of Finance now say that it is a state liability in an official document, that assertion should close the issue. (It won’t, of course, but progress has been made.)

As for the budget itself, it continues the general miasma of state accounting. Yours truly will await the governor’s media conference. But for the moment, let’s focus on the reserve in the General Fund. At the end of last year (June 30, 2013), the state controller put the reserve on a cash basis at MINUS $2.5 billion. The governor, on an accrual basis, put it at PLUS $872 million and now says it was actually PLUS $2.5 billion. No reconciliation between cash and accrual is provided. There is no doubt that with Proposition 30 and the improvement in the state economy, the budget situation has improved. But absent a reconciliation, the suspicion has to be that for cosmetic reasons, the governor wanted a final positive number in the reserve at the end of 2012-13 in his version of the budget – and he got one.

There is much focus in the new budget proposal on creation of a rainy day fund. Of course, the reserve is a rainy day fund (when it is positive) but both Brown and – before him – Schwarzenegger have liked the idea of carving out a kind of additional reserve and labeling that one the rainy day fund. That’s fine, but a reserve is a reserve is a reserve.

If we use the governor’s accrual version of a reserve, he expects to end this year with $4.2 billion in the reserve (June 30, 2014). A year later (June 30, 2015), he proposes in his budget that the reserve plus rainy day fund will total $1.9 billion + $1.6 billion = $3.5 billion. (Page 14) Note that $3.5 billion is less than $4.2 billion, so if the total reserve (including the rainy day fund) is declining, expenditures have to be exceeding revenues, something that ordinary folks would call a deficit. I doubt the word “deficit” will be uttered by either the governor or the finance director. And the governor would say he is paying down past debts that have accumulated to the tune of $11.8 billion in the proposed budget, both to Wall Street (the Schwarzenegger Economic Recovery Bonds) and internally, e.g., debt to K-14 under Prop 98. (Page 9) There is, however, ordinary debt service and discretionary debt service. The Economic Recovery Bonds have to be paid off unless the state were to default. Some of the other internal debts are more “adjustable.”

Stay tuned for more after the media conference.

And finally note that the mishaps in getting out the budget – where a few modest leaks earlier in the week have now become an online sea – may be a bit of online education for the governor. An interesting ride in the last 24 hours, thanks to the governor, in any case:

[youtube http://www.youtube.com/watch?v=i5tIHtbctFQ?feature=player_detailpage]

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]

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