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Friday, May 15, 2015

Friday, May 15, 2015
I'm sorry to rain on the parade, but even though the state continues to recover, UC does not.

In November 2014, Gov. Brown offered UC a 4 percent increase in state funding, or $119.5 million.  The UC Regents countered with their famous 5 percent tuition increase, which would have added another $131 million (not counting financial aid revenue from the state).  That might sound like a lot of new revenue, but it isn't. Were both pieces in place, UC would be getting about half of the16 percent annual increase it had estimated it needs for several years running to recover from the Schwarzenegger and the Brown cuts. See my November post on the Regents meeting for context and for UCOP's chart on the subject.

There are various ways to describe the problem: it   is a $1.5 billion structural deficit (2011 values) or it is the $1 billion in cuts since 2008 that CFO Brostrom uses in public statements. A third way is even more ominous: the last Independent Audit Report of UC's finances had UC losing $5.7 billion on operations in FY2013 and $4.5 billion in FY2014 (page 10).  These losses were partially offset by non operating gains (investment returns is the largest piece). Even so, the shortfall was $1.0 billion in 2014.

The Governor has again offered UC the same state increase and no more. He has added a compact-like agreement to do this for four years in a row.  At the appearance of a new headwind he can abandon this commitment as Gov. Schwarzenegger abandoned his, but more to the point is that this is a minimal increase that would likely have emerged from the normal budgeting process.  UC has agreed to freeze tuition for another 2 years, so that increment is lost. In 2017-18, UC can request a tuition increase, but one to be tied to an inflation rate that is likely to remain well under the 5 percent UC proposed. 

In other words, UCOP has agreed to several more years of austerity and shortfalls.  This will keep the deficit in place and, as far as I can tell, sustain annual operating losses.  

Students will be happy they will not be paying more. They will not be happy that they will still be getting less.  Educational quality became a clear student issue last fall. But the state's likely political calculation is that cost is still more important than quality, and that students will also take deal.

One possible compensation for bad operating budgets would be a structural fix.   Here we arrive at the pension announcement.  This Democratic administration has taken to describing UC's pension liability as both a gap to be filled and an affront to state budgeting.  It is not just a budgetary problem in this narrative but a moral failing on UC's part. UCOP wanted the state to start paying the employer's share of the pension as it had in the past, and as it does for Cal State. The state's refusal to do this was one reason why the restart of the contributions was delayed. 

The state continues to refuse annual contributions. What it has now offered instead is a one-time payment of $436 million staggered over three years. In exchange, UC is to tier its pension again by adding a Defined Contribution plan for new employees and capping the Defined Benefit pension at the state employee level of $117, 020. (See Dan Mitchell's rundown here.)

In budget negotiations, it is always a bad idea to make a permanent change in exchange for a one-time payment, and this one is no exception.  In addition, the amount received is very small: $145.33 million per year for three years, while UCRP, the pension fund, has a $73 billion net position for pension payments, which is up nearly $10 billion from the previous year, and paid out nearly $4 billion in benefits last year  (page 17).  Why would you restructure your pension, which your employees dearly love, in exchange for 3.6 percent of your annual pension expense, and for just three years?  

UCOP has already handed UC employees an 8 percent pay cut in the form of restarted contributions, and UC operating funds have been squeezed to do the same--with very good results for pension solvency.  So what is the real purpose here?  Perhaps the purpose is to convert UC's pension into a 403(b) over time, and that UCOP wants this as well. I don't know this, but I can't explain why UCOP would take this deal when the pension is actually on the mend.

I can see why the state would do it. It gets a chunk of UC operating expenses off its budget. State politicians can also divide up the UC employee body.  The Academic Senate already cooperated in one tiering of the current pension for ladder faculty; most unionized employees voted to keep younger employees with them in one tier while paying an additional percent of their income to help the fund.  Represented staff generally make less than the $117k pension limit, will thus be less affected by the cap, and have resented high executive salaries.  Thus the state may face little UC employee opposition overall.  

Ladder faculty, senior managers, and Management and Senior Professionals will be seriously affected. The cap would make faculty retention harder: in most disciplines, the cap will kick in at mid-career when the most visible faculty are most liable to be recruited away, and a capped pension will make it that much easier for competitors to beat UC's best offer.   (In some disciplines, assistant professors will start at or above the cap.) UC campuses have long been starved for internal funding for non-sponsored research, academic programming, and new teaching initiatives, but have been able to offer retirement security in the age of academic adjuncting and the "disposable employee."  As retirement benefits are cut and/or destabilized, faculty will lose the one clearly superior thing about working at UC.   

Jerry Brown has long been inserting himself into the middle of UC educational policy, most obviously with his campaign to convert some percentage of UC courses to online. This current deal sets the first actual quota for new students: one third of them must be transfer students from community colleges.  Listen to the clips of the governor and his budget director that Prof. Mitchell has posted.  They offer a good representation of executive branch aggressiveness, and also feature Gov. Brown saying that he wants UC's lower division to shrink.  

This idea is equally bad for students and for the University.  Resident undergraduates who actually want to go to a four-year university will be squeezed between non-resident applications who pay 3 times more and community college students who have seats set aside for them.  In addition, they will lose the lower division courses that form part of the integrated curriculum for the major they will eventually complete.  Putting the first half of college into some other institution's hands will make coherent sequencing and skills accumulation that much harder.  On their side, campuses have a budgetary ecosystem that a shrunken lower division will damage.  Lower division enrollments cross-subsidize graduate education, sponsored research, and student services, among other things, and provide graduates with teaching opportunities.  Shrinking lower division enrollments will shrink funds that support UC's status as a research university.
We'll have more to say about all this during the Regents meet next week and as the plan unfolds. But my main impression today is that this is another step in the state's half-unconscious plan called, "the UC reversion to the mean."  UC was for decades a spectacular, standout place.   It now seems slated to follow California's K-12 system down the national rankings--or would do were other states not busily pushing the rankings collectively down by slashing their university systems too.  

The higher community needs to say, if our senior managers will not, that all of these budget economies are false. Saving money as Sacramento would like simply reduces the quality and the quantity of the intellectual and human capital that UC can produce.  The economist Walter McMahon offers the most comprehensive quantification that includes the non-market and social benefits of higher ed. He shows they are together twice as large as the private, market benefits.  And yet the state, led by Jerry Brown, is trying to fund UC only for the latter, in which it is a three-year skills training service that starves both higher order capabilities and research. If this carries on, massive public benefits will be lost. 

In addition, the quantitatively larger portion of the benefits of higher education, these indirect and non market benefits, consist of deep, complex capabilities like powers of critical thinking and a capacity for democratic deliberation.  These are often generated by liberal arts and sciences disciplines that form the campus core. They depend almost entirely on state funds and tuition.  UC is now starving the core but sustaining the periphery, particularly the medical centers where so much of the administrative growth, pension liability, and high-end salaries have accrued.  One good feature of UC having lost two of its national laboratories to a private limited-liability corporation during the Bush years was that the federal government reimburses UC for pension costs at Lawrence Livermore and Los Alamos National Laboratories.  It may be time for a similar spin-off of the medical centers.  

I think that would be too bad, personally--medical research and practice are obviously crucial academic and public services.  Unfortunately, this latest poverty deal makes the internal competition for dwindling resources even worse, and the campus core is not protected.

Photo credit: Onbeyond, LLC, 2003.  Sample public campaign ad for UC, declined by UCOP
Posted by Chris Newfield | Comments: 9

Wednesday, May 13, 2015

Wednesday, May 13, 2015
By Stanton A. Glantz, Professor of Medicine, UCSF

Chris here: This piece was written for a daily newspaper. There would be a much better public discussion, or what we used to call in the fifth grade "a fair fight," if it and similar piece would actually appear in one of them. 

Once, California had abundant water and few recognized the challenge of global warming.  . Governor Brown, recognizing that it is impossible to simply roll back the clock on these problems, is leading California to confront this changed reality  with enormous efforts that have uncertain outcomes. But there is one problem in which the governor could roll back the clock to when California worked better: higher education.

Once, California’s three sector system of higher education – its Community Colleges, California State University, and the University of California – formed a high quality integrated system of accessible opportunity in which any California student could find an appropriate seat to advance their dreams.  California had the best higher education system in the world, while it cost the state less, per student, than other states spent on higher education. And the system’s graduates built California.

Now, after years of budget cuts and privatization, students are paying more for less.  The combination of high costs, increasing out-of-state students, and muddled Legislative policy is forcing students out of UC into CSU and the Community Colleges, which are, in turn, forcing the Community Colleges’ traditional students in to for-profit “colleges” that cost taxpayers billions and leave students with nothing but debt. 

Unlike the drought and global warming, we could roll back the clock and solve this problem overnight if Governor Brown provided the leadership to do it. 

Governor Brown appropriately has recognized that high tuition is a problem, but his response is actually making the problem worse.  He has started his Multi-Year Stable Funding Plan at the depths of the Great Recession when the schools were already terribly wounded. Then he has promised state funding increases for UC that are so small that when they are combined with tuition freezes they are actually further cuts, relative to inflation.  Rather than gradually rebuilding California higher education, this plan is a guaranteed slow bleeding to death of California’s public higher education systems.

Rather than exacerbate the problems, Governor Brown should press the “reset” button on all of California higher education and restore what California had in 2000-1, the last time that our higher education system was healthy. 

·       Return fees to 2000 levels (adjusted for inflation), for example cutting from $13,200 to $5,300 at UC
·       Return state funding per student to where it was
·       Fund seats for the thousands of California students who have been pushed out of the system
·       Roll out-of-state UC admissions back to where they were (a 2/3 cut)
·       Roll back spending on administration to where it was before privatization stated (which would be an 8% cut in total cost of UC’s senior leadership)

Doing so would restore quality, affordability and opportunity to California’s students, wipe out almost all new student debt, and stop forcing students out of the community colleges into predatory private schools. 

Pushing the reset button is affordable.   If done as an income tax surcharge, it would cost half of California’s families less than $31 a year and 40% of them under $10 a year.  (And it would only cost millionaires $5000.)   

A coalition of stakeholder organizations representing students and employees across all three systems has come together to press not only for full funding but also for a re-commitment to the California Master Plan for Higher Education. Reclaim California Higher Education
(www.reclaimcahighered.org/) advocates for a return to the vision of higher education affordability, accessibility, and quality for all Californians.

This spring, its members are talking to legislators across the state, urging them to restore adequate state funding to higher education, starting with the pending 2015-16 state budget. Now is the time to implement both increased state investment and institutional reforms.  As the group stated in a letter to Gov. Brown in early March, “Tuition and administrative costs are skyrocketing, while enrollment of in-state students is not keeping pace with the needs of our economy. Our institutions of higher learning should, once again, be engines of economic growth and good jobs in our communities.”

Restoring the promise of California higher education is something that we can and should do.  And, unlike the drought and global warming, it is something we can accomplish right now.

Stanton A. Glantz, PhD, is Professor of Medicine and American Legacy Foundation Distinguished Professor of Tobacco Control at UCSF, vice president of the Council of UC Faculty Associations, and past chair of the UC Systemwide Committee on Planning and Budget
Posted by Chris Newfield | Comments: 0

Friday, May 8, 2015

Friday, May 8, 2015
Labour had a bad night in the UK's parliamentary elections, but it was not a victory for the Conservatives' core policy of permanent public sector austerity.  Scotland gave the Scottish Nationalist Party (SNP) 56 of 59 Scottish seats in Parliament, a gain of 50 overnight, thus declaring independence without leaving the union. The SNP is among other things dead set against London austerity, as you can hear in Mhairi Black's speech celebrating her victory over Scottish Labour lion Douglas Alexander, one of the architects of Labour's failed national campaign. Scotland punished Labour for aligning with the Tories against the independence referendum.  The UK punished Labour for aligning with the Tories for austerity, finding their Austerity Lite brand a muddled non-alternative to Cameron and Osborne.

On higher ed, Labour's Ed Miliband had promised to roll back one part of the Conservative university revolution (if you're playing catch-up, one primer is my LARB review of Andrew McGettigan's important book) by reducing the fee cap back from 9000 to 6000 pounds per year. But they were not clear about how the gap would be filled or how and above all why universities should be funded in a non-Tory manner.

There has been talk of raising the fee cap to 11,500 pounds, also based on no actual funding model or meaningful principles of the university's private and public benefits.  That may now come to pass, with even higher fees than that discussed for Oxford and Cambridge.  There is no mandate in these results for even higher fees, and the Liberal Democrat coalition MP most responsible for enabling the fee hike, Vince Cable, lost his seat last night.  But voters are returning a Conservative party to power whose budget assumptions will force massive cuts onto unprotected government sectors, including remaining direct university funding, the student loans and grants budget, and also research, which has so far been protected.

We've seen this movie before.  One explanation for this repeated ending is that the Democrats & Labour are also now neoliberals, basically wet Tories, so why not vote for the real thing?  The base stays home unless it has a meaningful anti-austerity, pro-labor alternative, as they did in Scotland's SNP, in which case they turn out to vote passionately for anti-neoliberalism (read Richard Seymour today and predicting Labour defeat last year).

I see Dem/Labour neoliberalism more as an effect than a cause -- as an effect of their intellectual weakness more than of strong conversion to market Thatcherism.    Even though they mostly don't think the corporate and financial world produces good social outcomes, and even though voters always identify them with the public sector, Dems & Labour have for over thirty years been moving towards their opposition and away from their base.  Some of this is cowardice, intimidation, and greed, an obvious desire to stop fighting and join the wealthy and successful upper end of society, but much of it is intellectual confusion about the public sector's nonmarket benefits. After decades of head blows from the Friedman-Hayek-Mt Perelin army of market warriors, the Anglo-American center left can no longer explain, much passionately advocate, the great social processes they used to build in the 20th century.  They consent to self-belittling terms like "safety net" to describe public goods.  They have been the Great Enablers of the Republican marketization of society without appearing to voter as the movement's leaders and winners but as its reluctant gofers.  They also haven't led a new visionary embrace of  public goods that are both essential to progress and in fact popular with most people.  Mr. Miliband managed neither to break with nor continue this New Labour tradition, expanding the vacuum in public good explanations on which labor depends.

The University is a target character in this endless drama of center-left abdication.  In imposing their public funding cuts and tripled fee cap, Cameron's Tories simply negated the nonmarket private benefits and the social benefits of having universities.  The tragedy of that easy victory was how unnecessary it was on neoclassical economic grounds.  Mainstream economists have shown that the private market value of university is only about one-third of the university's total value to society.  I'm referring in particular to the comprehensive work of Walter W. McMahon, who identifies a total of six types of benefits - private market benefits, private nonmarket benefits, and social benefits, with each of these having direct and indirect forms.   Policy discourse in the US and UK  has focused on the university wage premium while treating all indirect, nonmarket, and social value as nebulous secondary effects, thus trivializing everything from better individual health to an increased aggregate capacity for scientific invention, the rule of law, artistic expression, and pretty much everything else about daily life that people like.

Trivializing society has of course been a highly successful core project of the political Right.   That doesn't change the possibility of showing  that most of the total value of education is collective, based on network effects (I'm smarter because my neighbor is smarter and also because an unknown Scottish villager became smarter 30 years ago, with endless ripples outward and everywhere).  All these spillovers, externalities and indirect effects through multiple variables, though they seem beyond the grasp of current political rationality, are the deep sources of real progress.  And yet we don't need to assert this as a quasi-Hegelian or anti-neoliberal abstraction: Prof. McMahon calculated that nonmarket private benefits plus social benefits (of indirect as well as direct types) form 2/3rd of a quantifiable total of educational benefits (244 et passim).  I'm not saying that quantification captures the main value of  higher education, just that Democrat and Labour policy people never use existing mainline research to counter a privatization strategy that reduces total university benefits by grossly exaggerating the private market piece.

The same goes for all the talk of the knowledge economy. Here's a concept that the Left could try harder to redefine for the sake of a just and egalitarian society--the "cognitive capitalism" folks can't do all the work by themselves.  It's also badly done by the center and Right.  The Tory government supposedly cares about human capital, and yet it has let research funding stay flat or fall in real terms, has found no money for moonshots at major challenges where the UK might lead, and had cut the enrollment funding that expands access outside the upper reaches of society that already have it. In the UK, public funding for instruction, the "teaching grant,"  has fallen from 22 percent to "less than 9 % of total university income."  I'm quoting a report recent posted by the Higher Education Funding Council for England (HEFCE), "The sustainability of learning and teaching in higher education in England," which concluded rather bluntly that with the Tories there isn't any.

When the report's authors adjusted budget figures to "cover the long-run or full economic costs of activities," it found a deficit of 3.8 percent of the sectors expenditures in 2012-13 (p 17).  Many UK university leaders had supported the Conservative funding changes because of the obvious cash-flow attraction of tripling fees virtually overnight, after decades of what Stefan Collini has called expansion on the cheap, in which per-student funding actually declined.  This report shows just how temporary that victory was.  It rejects the idea that the sector can grow its way out of this annual deficit. This is because its mode of growth is what is causing the deficit in the first place.

I've called this the "price of privatization," and this HEFCE report is a catalog of its various forms. Competing for overseas students and research grants will increase costs of operation "with limited scope to control this"; higher fees will create higher student expectations for both learning and faculty attention and thus raise costs; less prominent universities, rather than focusing on quality educational services for their type of students with stable teaching grants, will compete and fail to increase their revenues; universities will respond to incentives both to overbuild facilities and skim on maintaining them; universities will respond to incentives to underinvest in their workforce.  The report also confirms that UK research loses the typical university about 25 pence on the pound (these are similar to U.S. indirect cost shortfalls, as I've often noted), which means that universities must invest in research for the sake of their market position, which they cant afford unless they cut corners in areas where they already underinvest.

Clearly the university sector was stronger and of more value to society when it stood apart from commercial markets. But Labour lacked the theory (and not just the will) to make the public goods case for continuing this.  This allowed Conservatives to use claims of solvency and customer service to pry open the sector for the sake of business.  And it will allow them, in their victory, to expand the effects of privatization that the Manchester Capitalism group traced to the decades-old Conservative party project--underinvesting in infrastructure, squeezing suppliers, including their own professors (e.g. Warwick's TeachHigher), and "confusion marketing" to the global student body.  The HEFCE report confirms that the Tories have already driven average UK graduate debt to £44,000.  They will be tempted to solve fiscal problems of their own making by raising fees even further.

It's possible that a party that hadn''t sold higher ed to giant vendors while multiplying student debt would attract voters as the SNP did.  I doubt it.  The university hasn't created a public base of support for what it really does, which isn't job training and direct wage maximization.  We do have a huge, diffuse constellation of supporters and fans of higher education, but they exist in one-on-one conversations, in personal experiences on campuses, in moments of insight and in memories of change. The way we go about it, the process of abstracting that into a mass politics, damages the experience and makes it harder to vote for.

I was thinking about this while listening to the first segment of an Ira Glass show called "The Incredible Rarity of Changing Your Mind."  Something much like the Labour rout happened in California in 2008, when a gay marriage ban that everyone thought would lose wound up winning instead.  A consultant was called in, who had the bright idea of doing something they never do, which is going back to the neighborhoods where they "got crushed" and talking to people about why they voted against gay marriage.

They at first thought they'd talk to people about values and principles, and try to flip them by appealing to the golden rule and so on--although research shows people flipped like this almost always flip back in a matter of days.  Gradually they found something that worked much better. That was talking to people about themselves, without a script, letting one thing lead to another, and becoming as personal and as concrete as possible.  The recordings of a couple of the conversations are amazing.  And they quite often actually changed people's minds. Even more amazingly, they didn't change their minds back.  (Some of the research is here.)  The canvasser had to be concrete, and personal, and also had to be the kind of person who was affected by the decision.  If the subject was gay marriage, the canvasser had to be gay, and disclose this.  The moment of change may have happened when the voter could think, "how I vote makes a difference in this person's life."

The canvassers took these results to political consultants.  They had no interest. "These can't scale. We can't afford to do this.  We don't have fifty thousand people to talk personally to five hundred thousand voters."  No kidding--we can't afford it. And yet we have no choice but to do it.  People hate how politicians (don't) talk to them--the familiar slogans but more importantly the generic impersonality. Mr. Miliband went down because he was one of them--he's no different, so why bother?  Political parties will have to organize face to face and door to door--like the SNP--if they want to win.  And the same is true of universities.  We need to do with the public what we do in class, which is the personal effort to change people's minds.

Posted by Chris Newfield | Comments: 3

Thursday, April 30, 2015

Thursday, April 30, 2015
I've been buried in final book manuscript revisions, and have been noticing that I'm increasingly using the term "management" rather than "administration" in my analyses of university governance.  Part of the reason is that my employer, the University of California, uses Senior Management Group as a formal employment classification.  But it's also because the friendlier aspects of the term "administration" seem decreasingly part of everyday academic life.   Friendliness was administration as support structure, as collaborator, as partner, as the entity that did not take orders from obnoxious egocentric faculty prima donnas the way that frontline staff often had to do, but that accepted balanced power relations  and a certain mutual respect that could make decisions move relatively quickly and equitably.  It would avoid command and control of the kind that prevailed in the army and in most corporations, where executive authority consisted of direct rule over subordinates.

Of course I idealize the university as a bastion of mutual consent.  The AAUP and other organizations on the ground had to struggle to maintain some balance of power between academic and non-academic personnel.  Financial control and "decision rights' were formally top down: check the many powers of the UC president as one example. But for decades if not centuries the university stayed relatively close to a kind of collegium, to use Jim Sleeper's preferred term, in which it was the embodiment of educational practices that rested on the accumulated knowledge of its faculty, that were expressed in teaching, research, and public service with students, staff, and the larger public, and that required meaningful self-governance to be effective.  For these practices to be really good, to be meaningful, they had to be governed by the knowledgeable ones, the people who were inside and enacting the day-to-day practices.  This was not a mystical quasi-religious doctrine but the foundation of professional expertise as it allowed almost any kind of complex skill, white-collar and blue-collar alike.  Even if the senior administrators came from the faculty, they were expected to take seriously and not lightly overturn the judgements of active faculty whose human capital was of a newer vintage, to use the term of an education economist like Walter McMahon.   The model tried to make unilateral authority very rare.

But like many of us, I am now often using the term academic management because that unilateral authority has become so common. It is the rule in the UK university now, and to an extent that would surprise many Americans. It is increasingly common in the US.  The most famous recent case was the rescinding of the hire of Steven Salaita at the University of Illinois at Urbana-Champaign. The AAUP has released its report on that case, which sweepingly rejects the manner in which administrative authority was used.  It argues that that sort of managerial power is not compatible with academic freedom and established professional practices.

We've just heard about another kind of case at another University of Illinois campus--UI Chicago.  Here senior administrators rescinded hires in innovative cluster programs without faculty consultation, and in areas of special interest to that campus's special student population.  A number of faculty have detailed their grievances with the process and decision, and we've posted their letter with signatures.  It's an interesting local issue with national resonance.
Posted by Chris Newfield | Comments: 0

Monday, April 27, 2015

Monday, April 27, 2015
The big story in Higher Education this year has been the threat of massive budget cuts.  From Wisconsin to Louisiana, from Kansas to Arizona, and from Maine to North Carolina, state governors and legislators have proposed or enacted cuts to public colleges and universities. Although the outcome of this year's budget struggles remain uncertain, it does seem clear that California is not going to impose new cuts. Instead we seem to be battling over the size of small state funding increases.

That contrast between California and other states might appear to be grounds for confidence in the future.  But that would be premature.  Although the state has increased funding over the last several years and is proposing a small increment this year--it is important to recognize not only that these increases do not compensate for the years of cutbacks but that they help to solidify a strategy of permanent austerity budgeting.

One way to see this point is to look at the recent Legislative Analyst's report on "enrollment funding" for UC.  The main point of the report is to call for the Governor and Legislature to reinstate "enrollment funding" (i.e. to tie state funding to specific enrollment targets for the University).  Now I should say that I have no problem with the idea of enrollment funding.  Both the Governor and UC have done away with it (the Governor I suspect because he doesn't want to be obligated to increase funding with enrollment and UCOP because it allows them greater flexibility should they want to restrict enrollment without losing state funds).

If made correctly, there are good arguments for a greater linkage to tie funding to enrollment and to ensure that funding goes to support that enrollment (for instance ensuring that a new permanent faculty FTE is hired for every 19 additional students as is assumed in the financial calculations). (4) But the way that the LAO seeks to organize enrollment funding is less defensible and also revealing.

The logic of enrollment funding ties increase state support to the marginal costs of additional students.  The LAO calculates the marginal cost at $9244 for general campus students (UC's is slightly higher but I am going to use the LAO's). (8)  The LAO recommends setting the present year as the baseline for enrollment--which would also lock in the per student funding as it now exists as a baseline.

They propose that present enrollment be considered the baseline because it would avoid a conflict over whether funding should go for increased enrollment or to answer UC's claim that there are significant numbers of unfunded students.  But here is where the problem lies. Instead of providing a way to address the conflict over whether or not the state is fully funding students, the LAO simply eliminates the question by refusing to engage with it.  And that has serious implications.

The easiest way to do see these implications is to accept the LAO cost logic and then look backwards over the last decade and one half.  To be sure this means that all of what follows are estimates--but I think that the general picture is clear.

In 2001-2002 UC received $3,279,000,000 from the General Fund.  In the fall of 2001 there were 167,914 resident students enrolled on the general campuses.  In the fall of 2013 (the last year that I have good numbers for) there were 196,917 resident students enrolled on the general campuses.  That increase of 29,742  should have led--given the LAO's calculations of marginal costs to a funding increase of approximately $275M from the state (and this is without additional costs for health system students).  Put another way, the 2013-2014 UC General Fund support would have been $3,560,000,000. Instead it was $2,884,456,000.   The Governor's proposed General Fund contribution for 2015-2016 is $3,106,138.

The numbers, although approximate, are clear.  The LAO's proposal on enrollment funding would lock UC into a permanent structure of state austerity.  Although the state does pick up some of these losses through Cal Grants they do not recover all--nor do they even begin to backfill the long-standing under-funding of the University.  Students, staff, and faculty have been forced to assume the costs of this austerity--whether in terms of higher tuition, larger classes, or increased workloads.  By all means have the state engage in enrollment funding. But also have the state fund that enrollment at an adequate level, and allow it to rise as costs and educational needs change.

Posted by Michael Meranze | Comments: 5

Tuesday, April 14, 2015

Tuesday, April 14, 2015
Last week's prize for most offensive higher ed article went to a University of Colorado law professor named Paul F. Campos, who had a New York Times Sunday Review tell-all about college costs.  The Real Reason College Tuition Costs So Much" turned out to be "not because states have cut funding for higher education." Prof. Campos came to this conclusion by replacing the standard funding metric--inflation-adjusted funding per student with the total dollars being appropriated all the way back to 1960. His  key paragraphs read like this:

[P]ublic investment in higher education in America is vastly larger today, in inflation-adjusted dollars, than it was during the supposed golden age of public funding in the 1960s. Such spending has increased at a much faster rate than government spending in general. For example, the military’s budget is about 1.8 times higher today than it was in 1960, while legislative appropriations to higher education are more than 10 times higher. 
In other words, far from being caused by funding cuts, the astonishing rise in college tuition correlates closely with a huge increase in public subsidies for higher education. If over the past three decades car prices had gone up as fast as tuition, the average new car would cost more than $80,000.
In other words, there is no state funding problem, and never has been.   The cuts are a "fairy tale."

This claim is a conceptual disaster at a time when many state legislatures have convinced themselves of exactly this--that if you add up all the revenues available to public universities, they haven't been cut at all. California's special variant is the claim that UC actually profited from the financial crisis and now has more money than ever.  (Then-Assembly Speaker John Pérez laid this out to the UC Board of Regents in January 2013.  And now he's UC Regent Pérez.)  The fallout has been a slew of competing legislative efforts to bring UC to heel, so many that I need a scorecard like this Sac Bee piece, and  Cloudminder's recent links.

1. Actual Austerity

In a concurrent blog post at Lawyers, Guns & Money, Prof. Campos illustrated the NYT claim about the state funding boom with this chart.  (He has another that adds in federal Pell Grants.)

There he repeated a milder version of the NYT claim, "It’s quite an interpretive challenge to translate these numbers into the claim, made universally by higher ed administrators, that fifty or more years of practically continual tuition rate hikes have been caused by cuts in public subsidies."

So first, do Prof. Campos's numbers show crazy public funding growth?  Sticking with state appropriations, the first thing to point out is that the curve falls into two periods: a steady rise from 1960 to 1990, and a slower, jagged rise from 1990 to 2015, with an aggregate decrease from 2010-2015. The State Higher Education Executive Officers (SHEEO) just released its report on state appropriations for FY 2014, and confirms that state appropriations in constant dollars are still about 19 percent below their 2008 peak.   Nobody has been complaining about state appropriations from 1960 to 1990.  The complaints are about overall stagnation after 1990 and real cuts after 2008.  By folding recent declines into a bygone golden age, Prof Campos distorts the current history and sidesteps the current funding debate.

Even this overall appropriations growth doesn't show the insane extravagance we're supposed to see.   The best historical data about states comes from Illinois State's longtime Grapevine project, which began toting up state allocations for the 1960-61 year.  They came to about $1.5 billion total (when California appropriated twice the total of the next largest public system, Illinois').  By 2015 the total was about $81 billion, for an unadjusted increase of 54x.  Sounds like the states were just throwing money at public colleges, right?

Wrong. Money often grows at that rate. Say you're a retirement fund, and you started with $1.5 billion in 1960.  Fifty-five years later, your fund has $81 billion.  All this means is that your fund grew at about 7.5% per year, which is about the growth target set by the UC Retirement Program and similar funds.  Prof. Campos was, in other words, amazing Times readers with the miracle of compound interest.

As for other benchmarks, Warren Buffet actually returned 19.7 percent per year in a similar period. 10 percent annual returns on investment is a standard target; the S&P 500 has long returned about that when dividends are reinvested; venture capitalists look for five-year ROIs that are orders of magnitude more than 10%.  So even before we start correcting Prof. Campos growth curve, we can see that 10x over 55 years (inflation adjusted) is what is supposed to happen to resources in a successful economy.

Second, the article's use of aggregate funding growth drove budget watchers crazy.  At Inside Higher Ed, Dean Dad sounded off, calling the column "both a failure and a mess, and the two are related." His piece expressed common academic anger at the sloppiness with which the mainstream media tosses around bogus charges that don't need to be true to do enormous damage. Brian Leiter, in the law school world, hated on Prof. Campos' long division

On Monday, more or less the best non-IHE/CHE journalist working on higher ed funding, Jordan Weissmann, went after the piece in Slate under the title, "The New York Times Offers One of the Worst Explanations You'll Read of Why College is So Expensive." He delivered the right College Funding 101 lesson, which is that it isn't total dollars but dollars per student that matters as a baseline: "Depending on who's counting, states are giving schools somewhere between 25 and 30 percent fewer dollars per student than they were 15 years ago. And someone has had to make up that difference. Namely, college kids."

At the AAUP's Academe Blog, Martin Kich offered various charts, including the standard pattern of tuition increases and state funding declines (per student).  For those in doubt:

Precise curves will vary, and the exact peak of state support may have occurred in 1987, 1990, or 2001 depending on which inflation index you use. But the correlation is clear: per student funding has declined, and student tuition has gone up.

Back at Lawyers, Guns & Money, Prof. Campos produced a more conventional chart with the consensus conclusion. Appropriation growth is terminated by student enrollment growth.  Appropriations go sideways after 1990 and then decline after 2010.

Take Pell Grants out, and you get the standard decline story.  (You should take the Pell Grants out: they are federal money that backfills tuition charges to students, not new operating allocations.) SHEEO's latest report has the definitive version.  This is net tuition (green) and state appropriations (blue), per student FTE, in 2014 dollars using SHEEO's Higher Education Cost Adjustment (HECA) index.

Note, to repeat, that real per-student state appropriations are down about 25 percent from 25 years ago. Note that a doubling of net tuition has not brought total resources back to their 2001 peak. Recall that this is the period in which US degree attainment fell to 16th place in OECD rankings.  Note that rising college enrollments has now reversed. 

In other words, per-student public funding has been cut. Tuition and student debt have boomed concurrently. So Prof. Campos winds up back where we all started, with per-student appropriations that are less that what they were seven years ago or 25 years ago, and with educational problems that follow from the reality of this long-term austerity on the public side of the university system.

2. Expanding Admin

So why did Prof. Campos deny per-student austerity, which is real, to focus on aggregates that stopped rising very quickly about twenty-five years ago?

My theory is that he has been driven half-mad, like many of us, by the refusal of senior academic managers to put their own choices into the picture, and say yes we too have increased costs with our decisions. Prof. Campos seems to have been willing to reinforce damaging stereotypes of overfed public colleges in his obsession with rejecting the causal claim that public cuts (and only public cuts) produce tuition hikes.  His last line in the Times reads:  "What cannot be defended . . . is the claim that tuition has risen because public funding for higher education has been cut" (emphasis added). In other words, he's saying, universities have hiked tuition also because of other cost increases, many chosen by the universities themselves.  And on this point, he is absolutely right.

His Times piece moves on to offer its own causal explanation.

[A] major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.

This picks up a theme Prof. Campos has aired in the national media before. Time magazine gave him space in 2013 to attack E. Gordon Gee as he was stepping down from his highly-compensated second stint as Ohio State's president.  In a piece called "The Lessons of the Megalomaniac University President," Prof. Campos termed President Gee's $2 million per year (plus another million a year in travel, entertainment, and related expenses) "disgusting." He went on to say,

Gee also increased the size of the university’s senior staff by 30% and raised their average salaries by 63%, to $539,390 in 2011. To get a sense of how out of control university-administrator compensation has become, consider that a year before Gee began his first tenure as Ohio State’s president, the president of Harvard was paid $138,044 ($256,000 in 2012 dollars), and only eight university presidents in the entire nation made more than $200,000. Now, thanks to Gee and his ilk, there are dozens of administrators at Ohio State University alone who would consider that sum an insult.

If you think this is cherry-picking, look at another figure showing the unmistakable national pattern.

The largest employment growth is in non-faculty professions, which include not only senior staff but the ever-larger administrative middle of public universities.  This lopsided growth marks a major shift in resources from educational to non-educational personnel. It has coincided with two other things Prof Campos and many others lament: faculty salaries that on average have stagnated since 1970, and the adjuncting of most college instructional staff. "Administrative bloat" means falling faculty salaries (see Prof. Kich's numbers) and downgrading education. Administration competes with instruction and research for the limited internal funds that underwrite both, and has been winning.

3. The Price of Privatization

Faculty are sick and tired of austerity, and of blocked upgrades of teaching and research, and of being wrongly blamed for tuition increases.  So when one like Prof. Campos sticks his neck out, how do administrators respond? We have one instance in a letter to the Times by University of California CFO Nathan Brostrom. He rightly noted that public funding cuts are real, and then wrote,

Mr. Campos blames administrative bloat and high salaries; I disagree. The State of California, for example, funds the University of California system at the same level as it did in 1999 — even though today we enroll 83,000 more students and have one more campus.

What? This is like saying, "I didn't pay too much for my new car since I made less money this year than last!"   Obviously a university can get less money from one major revenue source and still spend too much of it on administration.  Perhaps an editor butchered Mr. Brostrom's argument: this certainly doesn't qualify as a serious response to questions about internal costs that university administrators have themselves tolerated or initiated, or to the educational damage and workplace degradation that result.   So nothing will happen, until the next faculty cri de coeur that houses a reasonable point in an overblown war machine aimed at maddening discursive defenses.

Mr. Brostrom and Prof. Campos are two sides of the same coin, or the two poles of a frozen dialectic.  One side says the problem is all outside the university, particularly in legislative cuts.  The other side says that the problem is all inside, particularly self-serving managers larding up administration.   Each side uses the other to disengage from open institutional politics that would involve all parties.  The debate has occupied the center ring for years. It prevents discussion of the deeper forces reshaping the university.

A summary term for those deeper forces is privatization.  Neither the Brostrom or the Campos side focuses on the fact that privatization increases expenses as well as revenues. In reality, privatization forces the mission creep of multiplying activities, "businesses," funding streams, capital projects and other debt-funded investments, which increase all sorts of non-educational costs and also administration.  Private partnerships, sponsors, vendor relations, and so on bring in new money but also cost money, require institutional subsidies, and in many cases lose money for the university.

University budget offices have a bad habit of reporting revenues in many areas without subtracting costs.  If they really want public understanding of college costs--which I doubt--they need to disaggregate internally-driven cost increases.  Not all increased costs express a "cost disease."  Some reflect  improved quality of educational services.  Universities should try to separate increased expenses that improve "quality of care" from those that are focused on increasing revenues.  Then the latter should be broken down into those that produce net increases and those that don't.  

I am aware that this would be hard and somewhat subjective.  But trying to do it would hugely improve the cost debate, and also public awareness of why per-student public university expenditures never go down.

Administrative bloat is one of the prices of privatization.  Until we can have honest accounting of privatization's costs, public university funding will be going nowhere.  And academia's leaders will obviously be far more responsible for this stagnation than any number of articles by frustrated faculty like Prof. Campos.

Posted by Chris Newfield | Comments: 7

Thursday, April 2, 2015

Thursday, April 2, 2015

by Jennifer Ruth,  Portland State University

I’ve written before about my experiences at Portland State for Remaking the University. I’ve described effortsmy colleagues and I made to increase tenure-line positions. I’ve explored whythese kinds of efforts are difficult to coordinate and sustain in environments already reliant on non-tenure-track (NTT) instruction. Some of the readers have agreed with me that those of us with tenure should use it to refuse to grow through precarity. They then have taken the next necessary step—a hard look at the numbers. (See, in particular, Matthew H. Clark’s excellent comment on the math at the bottom of thispost.) They ask, as we all must: How realistic is it to push for a return to a majority tenure-line workforce at the typical public university?

At Portland State, as at many other state universities across the nation, we have what is now being breezily referred to as “the faculty mix”: tenure-track (TT), full-time non-tenure track (NTT), and part-time or adjunct faculty. Full-time NTT faculty members are involved in governance and service; adjuncts are not. The involvement of the former is an acknowledgment of a reality that has obtained for at least two decades: though on one-to-three-year contracts, these faculty members are permanent. Now, as we’ve steadily grown our third workforce, the adjunct faculty, it too is arguably as permanent. I’ve discussed before thenumbers behind Portland State’s economic dependence on faculty originally often hired as if they were stop-gap. I don’t have access to all the university numbers so I can’t say how much money would be liberated for faculty hiring were administrator salaries and real estate purchases to eat up less of the budget. I do think, however, that it is fair to say that we cannot afford one tenure track composed of positions bundling research, teaching, and service. I think it is equally fair to say that we can afford two tracks.

In our forthcoming book, The Humanities, Higher Education and Academic Freedom: Three Necessary Arguments, Michael Bérubé and I call on universities like Portland State to create a tenure track for full-time faculty hired and promoted on the basis of excellence in teaching, and require that the vast majority of faculty be hired onto this track if not hired onto the other research/teaching tenure track. As a boundary, part-time adjunct instruction should account then for no more than 10% of student credit hours a term. The ratio of teaching-intensive faculty to research-and-teaching faculty will depend on many variables, and no doubt the relative size of the two tracks will vary greatly from university to university. The important thing in our minds is that both tracks confer eligibility for tenure after rigorous review. Universities will improve the teaching their students receive—there will be more accountability, not less, in such a system–and they will strengthen faculty involvement in service and governance. It is this last area of faculty work—service and governance—that has most convinced us of the necessity of tenure eligibility for all full-time faculty at universities.

Some people argue that universities should implement rolling contracts for non-tenure-track (NTT) faculty. We do not believe that this is sufficient: multi-year contracts do not provide meaningful academic freedom. In a recent essay in Inside Higher Ed, Michael Bérubé quotes Don Eron, a long-term contingent faculty member at the University of Colorado at Boulder and member of AAUP’s Committee A on Academic Freedom and Tenure, who says, “Multiyear contracts are guaranteed to keep a faculty docile. Having to constantly reapply for one's job actively discourages the academic freedom that tenure is designed to protect.” The comment thread trailing Michael’s essay affirms Eron’s point. Quoting Michael on the catch-22 of NTT faculty in governance (vulnerable if you do it, vulnerable if you don’t), one commenter stated, “Uhh... there are full time faculty on one-year contracts doing committee and Faculty Senate work on our campus. That cow left the barn a decade ago.” Someone then responded: “yes, i [sic] am one of them - and I think twice before I say anything on the committee because i [sic] don't want to lose my job actually- Berube has it right.”

Time and again, I’ve seen governance dynamics sour when committees operate on the implicit pretense that TT and NTT faculty have the same degree of security with which to deliberate on issues. Awkward, failed committee work is often attributed after the fact to TT faculty’s arrogance and insensitivity to NTT faculty vulnerability. This no doubt is a factor in some places and at some times, but in my experience, the situation is untenable because everyone in the room becomes painfully aware of the power differentials warping the discussion’s outcome. In these environments, nobody feels free to say what she or he thinks—the TT faculty for fear of looking like a bully, the NTT faculty for fear of repercussions for their future.

At Portland State University, I currently serve on a “Faculty Roles and Structure” topic team, a kind of subcommittee of a university-wide strategic planning committee. Last week, two of us from the topic team—myself (a long-time TT faculty member) and a colleague from another department (a long-time NTT faculty member)—had a meeting with a staff member from the President’s office to discuss scheduling and other logistics. We found ourselves telling her that there was something extraordinarily naïve about putting a bunch of strangers of different ranks into one room and expecting us to walk out with a coherent set of recommendations concerning the faculty mix. My colleague told the staff person she should consider the university a country club circa 1950: the TT faculty members are the elite and NTT faculty, the excluded.

And TT faculty concerns are real, too. The sometimes casual hiring of NTT faculty, some of whom do not have terminal degrees, has led to a situation in which some TT faculty are uneasy throwing governance open to all faculty. They worry that people who have not gone through the entire training process of the discipline—which includes not only the earning of the terminal degree in their fields (typically, the Phd or MFA) but the work involved in competitive searches —may not be well-equipped to promote and preserve disciplinary standards. Additionally, TT faculty are not slighting their NTT colleagues when they worry that growing groups of faculty involved in governance without job security weakens the faculty’s aggregate ability to enter into shared governance with administrators as equals.

Tenure not only provides a degree of independence that multi-year contracts don’t; the hiring and evaluation processes are legitimating in and of themselves. One feels a lot less vulnerable when many different people and stages were involved in one’s hiring and retention than when one or two people were. Another commenter on the IHE thread following Michael’s article wrote, “At my school, there are numerous adjuncts with MAs who simply got their job because they live in the area and know the right people - a patronage system. However great their teaching evals , this practice is deprofessionalizing our profession.” The last thirty years of off-track hiring, Adriana Kezar and Daniel Maxey argue in “Adapting by Design,” now threatens the “core of our educational mission and the status of the academic profession.” This cannot be construed as an insult to NTT faculty when it is very patently the resulting institutional dysfunction, not the unprofessionalism of individuals, that has pushed us off our ivy-covered brick walls.

Many administrators will argue that they turned to faculty with higher courseloads to survive when states divested from higher education. Okay, we can answer, but you can and must find the money for a full-time teaching-intensive tenure track composed of positions with comparable salaries and equal benefits. With a teaching-intensive tenure track, we establish a credible degree of equality and legitimation and protect academic freedom. And we treat the profession of college teaching with the dignity it deserves.

Posted by Chris Newfield | Comments: 8