California Trains Professors To Avoid ‘Microaggressions’

University of CaliforniaUniversity of California president Janet Napolitano’s office has been training faculty members at the University of California to avoid describing America as a “land of opportunity,” along with other phrases the school claims are offensive “microaggressions.”

According to activists, “microaggressions” are subtle actions, usually unintentional, that perpetuate discrimination against disadvantaged groups even in environments where overt discrimination has been abolished. Now, the UC system has fully committed itself to formally training faculty to avoid and root out these perceived microaggressions for the good of all.

The attack on microaggressions is the centerpiece of a series of faculty leadership seminars carried out by Napolitano’s office at several campuses across the UC system. One document used in the seminars is titled Tool: Recognizing Microaggressions and the Messages They Send, and lists dozens of menacing microaggressions for faculty to avoid.

One of the largest categories of microaggressions are those that that promote the “myth of meritocracy.” According to the document, this “myth” is spread by statements such as “America is the land of opportunity,” “I believe the most qualified person should get the job,” and “Affirmative action is racist.”

Other examples of sinister microaggressions, according to the guide, include:

  • Describing America as a “melting pot” (it orders people to assimilate)
  • Stating that “there is only one race, the human race” (denying the significance of a person’s ethnic or racial history)
  • Asking Asians, Hispanics, or Native Americans to speak up more (“pathologizing” foreign norms and treating white norms as “normal”)
  • Using “he” as a generic pronoun for all people (it makes the male experience universal and the female experience “invisible”)
  • Using forms where individuals must identify as male or female (it excludes the full LGBT experience)

The guide was used in faculty training sessions for UC faculty members throughout the 2014-15 school year, but its contents only recently drew more widespread attention when one professor notified The College Fix about the materials.

A PowerPoint used for seminar in April shows the dramatic tollvUC believes even a single microaggression take on students. Even a simple compliment, such as calling a student “articulate,” can set off a cascade of self-doubt and anxiety for the recipient

A second document instructs faculty on the proper ways to intervene against microaggressions. For example, if a person commits the offense of starting a sentence with “You people”, a suggested reaction is to say “I was so upset by that remark that I shut down and couldn’t hear anything else.”

Microaggressions aren’t the only threat faculty have been taught to mind. Another document, the Tool for Identifying Implicit Bias, instructs faculty how to avoid being biased in evaluations or hiring decisions. The document singles out phrases such as “hard worker” as being “euphemisms” for bias that must be rooted out.

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Originally published by the Daily Caller News Foundation

Gov. Brown Walks the Budget Tightrope

jerry-brownGov. Jerry Brown has unveiled the highly-anticipated revision to his annual state budget, teeing up final spending negotiations in Sacramento — largely with his fellow Democrats.

Despite a resurgence in California’s fiscal fortunes, including tax receipts some $2 billion in excess of estimates, “analysts are warning that California could be headed for more fiscal headaches as soon as next year,” the Wall Street Journal observed. “The state is constitutionally required to spend more on public education as revenue increases. This year’s revenue will establish a spending base for next year, meaning it could be harder for the state to balance its budget if the state’s income declines.”

Brown has made his reputation as governor holding the line on spending against steady pressure from his left. But Brown’s own favorite projects, including California’s high-speed rail plan, received his unwavering support, even drawing money away from expenditures favored by activists.

A selective windfall

Now, Brown has chosen to walk the budget tightrope in a way that will encourage his more profligate allies. Beneficiaries of Brown’s revised budget were set to include poorer Californians, unlawful immigrants and college students, as the San Jose Mercury News reported:

“With billions in better-than-expected revenue, Brown unveiled a $115.3 billion general fund spending plan that creates the state’s first-ever ‘earned income tax credit’ and would pay for Medi-Cal for some immigrants living in the state illegally.”

Brown’s revision also slipped in the results of a long-belabored deal with UC President Janet Napolitano, “who had demanded tens of millions of dollars more for her system to stave off 5 percent tuition hikes in each of the next five years,” as the Mercury News recalled.

But the revised budget plan went well beyond those measures, touching policy areas that have bedeviled Brown throughout much of his time in office.

Prison reform

Brown, for instance, used the revision to forge ahead with reforms to California’s prison system, which has been a virtual albatross around his neck since the Supreme Court ordered the state to reduce its crowded incarcerated population.

As the Los Angeles Times reported, the new budget revision “calls for shrinking the number of inmates housed outside California in the next year by 4,000 — reducing related state spending by $73 million. As of this week, the state had a little more than 8,000 inmates in private prisons in Arizona, Mississippi and Oklahoma, and another 6,250 prisoners in contracted lockups within the state.”

According to the Times, the cuts became possible because of the impact of Proposition 47, which thinned prisons’ ranks largely by slashing penalties and jail time for drug-related offenses. As CalWatchdog previously reported, although relatively few donors fueled the measure, Prop. 47 won the support of a substantial majority of voters in November.

Mixed reactions

In what has become a hallmark of his tenure in office, reactions to Brown’s adjusted numbers mixed praise with criticism. “We applaud the governor for putting money back into the pockets of those who work hard every day and pay their taxes – it’s the right move,” remarked Assembly Republican Leader Kristin Olsen, R-Riverbank, according to the Sacramento Bee. But, she added, Brown’s tax credit “will not end widespread poverty. That’s why Assembly Republicans have offered straightforward solutions to reform education and support the modern economy so every Californian can boost their earnings and quality of life.”

From the other side of the aisle, some Democrats registered disappointment with the limitations of Brown’s agreement on school funding. “We are pleased UC students and their families will avoid paying higher tuition next year,” said Senate President Pro Tem Kevin de León, D-Los Angeles. “But CSU, the workhorse of our higher education system, has been shortchanged. We have to support both of our public institutions of higher learning to make sure college is accessible to as many Californians as possible.”

Originally published by CalWatchdog.com

Revised Estimate for K-12 Spending: $6 Billion More Next Year

Vidak_Andy_School_8x12_0164Spending for K-12 schools in the coming year will be $6 billion more than Gov. Jerry Brown proposed just five months ago, raising per-student spending $3,000 – 45 percent – from what it was four years ago, according to the revised state budget that the governor released on Thursday.

State revenues have surged this year, and K-12 schools and community colleges will haul in nearly every penny because of Proposition 98, the constitutional amendment that puts schools first in line for restoring funding when the economy rebounds after a recession.

The new level of Prop. 98 spending for K-12 schools and community colleges will be $68.4 billion in 2015-16. That is $7.5 billion more than the Legislature appropriated last June for the current year. Surging revenues, which are projected to continue into next year, will bring the total increase for schools next year to nearly $14 billion in Prop. 98 spending (see pages 13-22 of state budget summary).

But warning that “the reality is another recession is coming,” Brown is splitting the increase between ongoing spending, one-time expenditures and paying off debts.

Local Control Funding: The Local Control Funding Formula, which provides general spending to schools, will remain his top priority. It will get $6.1 billion more next year, or about $1,000 more per student on average, with districts with higher proportions of English language learners and low-income children receiving more.

Paying off mandates: About $3.5 billion ($2.4 billion more than in the January budget) will pay for unreimbursed mandated expenses. Districts and county offices of education can use this money however they want, although the governor is encouraging them to spend it on implementing the new Common Core and science standards.

“I think there’s an expectation and hope that it will be put into Common Core implementation,” said David Plank, executive director of Policy Analysis for California Education, or PACE, a research center based at Stanford University, “Common Core is hard work and the money, I think, will be greatly received and put to good use.”

But Education Trust-West, an advocacy group for low-income and minority students, criticized Brown for not requiring districts to use the money for Common Core. “Districts will be pressured to use these funds for many other competing priorities,” it said in a statement. “We missed an opportunity to ensure our state standards will truly make a difference for all of our students.”

Special education: The Statewide Special Education Task Force, a group convened in 2013 to propose improvements to special education in California, received recognition in the revised budget – and $60 million for some of the actions it recommended. This includes  $50 million in ongoing funding and $10 million in one-time funding to expand interventions for special-needs children under two years old, add 2,500 additional preschool slots prioritized for special-needs children and expand data-driven schoolwide behavioral supports.

End of deferrals: About $1 billion will pay off the final late payments to districts, known as deferrals, which forced districts to borrow money, sometimes at high interest rates, while waiting for state funding.

Advocates for young children and the Legislative Women’s Caucus had called on Brown to provide $600 million more for child care for low-income families by shifting that expense into Prop. 98. The Legislative Analyst’s Office had suggested freeing up money for non-Prop. 98 spending by adjusting property taxes that go toward education funding.

But Michael Cohen, director of the Department of Finance, said he was “not interested in manipulating the Prop. 98 guarantee” and “plopping things into 98” to spend additional money. The department, he said, distinguished programs that qualify for education funding.

Assemblywoman Shirley Weber, D-San Diego, who chairs the Assembly Budget Committee’s education subcommittee, said that she shares the “strong sentiment” to include more money for child care in Prop. 98, where that funding was included until it was shifted in 2010-11. The issue will be negotiated with the administration, she said.

PRAISE FROM EDUCATION GROUPS

Education groups generally had high praise for the revised budget. Plank called it a “spectacularly good budget for K-12.” Kevin Gordon, president of Capitol Advisors, a lobbying firm representing school districts and county offices of education, said it was “one of the best budgets for K-12 I have ever seen. It has fully discretionary money with no strings attached. That normally doesn’t happen.”

The Legislative Analyst’s Office estimates that extra revenue in the May budget revision will raise K-12 Proposition 98 funding to $9,978 per student –$656 per student higher than the inflation-adjusted, pre-recession spending level  in 2007-08. The LAO’s  estimate for 2014-15 includes one-time spending of $700 per student more than districts anticipated when they built their 2014-15 budgets; that money, totaling $4.3 billion, will be spent in 2015-16 and subsequent years. (click to enlarge.)

SOURCE: LEGISLATIVE ANALYST’S OFFICE

The Legislative Analyst’s Office estimates that extra revenue in the May budget revision will raise K-12 Proposition 98 funding to $9,978 per student –$656 per student higher than the inflation-adjusted, pre-recession spending level in 2007-08. The LAO’s estimate for 2014-15 includes one-time spending of $700 per student more than districts anticipated when they built their 2014-15 budgets; that money, totaling $4.3 billion, will be spent in 2015-16 and subsequent years. (click to enlarge.)

Adonai Mack, legislative advocate for the Association of California School Administrators, said his organization agrees with Brown’s priorities and appreciates that the governor didn’t permit other programs to encroach on Prop. 98 spending. “It’s a very good budget for public education,” he said.

Joshua Pechthalt, president of the California Federation of Teachers, said the budget reflected the right priorities in funding education and creating a new tax credit for low-income workers. But he added, “we have a long way to go before we restore the programs in education and social services we lost to a decade of budget cuts,” and called for making temporary taxes under Proposition 30 permanent.

Double-digit spending increases for schools is not expected to continue past next year. State revenues are expected to flatten with the expiration of temporary increases in the state sales tax and the income tax on the wealthiest 1 percent. And the portion of the revenue going to K-12 schools and community colleges will decline after next year to about the standard 40 percent of the general budget after past obligations to Prop. 98 are fully paid off. Called the maintenance factor, it was as high as $11 billion as a result of cuts made during the recession, but will be under $800 million after next year.

The new Prop. 98 numbers will ease anxiety in Los Angeles Unified, whose board approved a 10 percent pay increase for teachers without knowing how the district would cover the expense. District officials said Thursday that the $300 million to $400 million in additional state money next year – half for ongoing costs and half in one-time funds – would cover the costs of teacher raises. But they said they were unsure if they can avoid teacher layoffs next school year or how they will pay for promised future raises.

The Legislative Analyst’s Office estimates that extra revenue in the May budget revision will raise K-12 Prop. 98 funding to $9,978 per student –$656 per student higher than the inflation-adjusted, pre-recession spending level in 2007-08. However, under the new funding formula, some districts with fewer English learners and low-income students are still well below that figure. And all districts will face substantial increases in pension costs for teachers, which will rise an additional $3.7 billion collectively over the next four years.

Reporters Jane Meredith Adams, Susan Frey, Michelle Maitre and Sarah Tully contributed to the coverage of the state budget.

UC administrative staff tripled in two decades

As reported by Capitol Weekly:

Rising university tuition costs have been a hot topic in California, where Gov. Jerry Brown and state lawmakers have tangled with UC executives over budgets, spending and state investment levels in higher education.

Long story short: The University of California says the state needs to increase its investment in its public universities to stave off tuition hikes, while the state wants UC to be more creative and willing when it comes to penny-pinching.

This political tension is rooted in the fundamental question recently asked by the New York Times: Why does college cost so much?

California is typical of other states. Since 1993 …

Click here to read the full article

State lawmakers take aim at UC brass’ lofty salaries

As reported by the San Francisco Chronicle:

State lawmakers from both parties are sending the University of California an angry message by advancing a bill to cap compensation for UC employees at $500,000 under penalty of losing public funding.

The bill, approved by the Assembly’s higher education committee last week, is a prime example of how Gov. Jerry Brown’s concerns over high spending at the public university have spread to the state Legislature, where the bill is one of five in play — all meant to bring UC to its knees by reining in its spending, restricting its ability to raise tuition and ending its constitutional autonomy.

The measure, AB837, and the other bills get at the heart of the irritation that students, lawmakers from both parties and Brown feel toward UC. Their complaint: The university keeps increasing compensation for its highest-paid employees while demanding that students pay more tuition and that the state contribute more toward its bottom line. …

Click here to read the full article

Future of UC System in Hands of “Committe of Two”

Ironically, in the midst of Sunshine Week, designed to create more open government and freedom of information, the “Committee of Two” considering the financial situation of the UC system – Gov. Jerry Brown and University of California President Janet Napolitano – are not forthcoming in revealing details about their negotiations. Despite protests to the contrary, this may be a necessary thing.

Yesterday at the UC Regents’ meeting in San Francisco, both Brown and Napolitano did a two-step around whatever progress is being made in their talks about the proposed tuition increase. Napolitano and the Regents supported tuition increases if the university system did not get more money from the state. Brown refused to be bullied.

Now the two are working on a plan that will try to re-set some university finances without raising tuition or dramatically increasing the state’s contribution. Not an easy task, but they claim they are making progress.

That doesn’t stop critics from demanding the negotiations be more open. As one student was quoted in the Sacramento Bee, “We need a committee that not just represents a committee of two, but a committee of 240,000,” referring to the number of students in the system.

University business

Are private talks setting government plans ever the way to go? Historians have suggested that, if the United States Constitution was cobbled together in open meetings the document would be much different and, they suggest, not better.

Tackling tuition hikes is not the same as constitution writing. However, to continue the broad analogy, what comes out of these private meetings may set a course of change for the way the university does business, just as the long ago constitution-writers went beyond their original assignment of fixing the Articles of Confederation.

I know – a little bit of a grandiose comparison.  But it is quite possible the UC system might look and feel quite different if the negotiators come to an agreement and any proposed changes are approved after debate. Online courses, larger teaching loads for professors and a shorter time to graduation all may alter the university experience as we have come to know it over the last few decades.

Whatever the Committee of Two comes up with would have to withstand vigorous public debate. There is no guarantee any Committee of Two proposal will pass the test. I served on a half-dozen state commissions over the years and few commission recommendations were turned into state policy.

Pensions

One big issue that is affecting all government-related organizations is employee pensions and health costs. When the issue of raising tuition first surfaced, the university’s financial division pointed to pension costs as one of the culprits. That issue must also be part of the negotiations, along with rising retiree health care costs.

We will see if the Committee of Two can come up with any solutions on the pension/health care front that succeed and maybe set the course for reform in this area for other government entities.

One suspects big changes are coming to the UC system. Getting the ball rolling is happening in private.

This piece was originally publish by CalWatchdog.com

UC’s Perfect Storm of Unmet Budgetary Obligations Puts Pressure on Students

With the University of California system in the midst of a tense tuition standoff, budgets have come under renewed pressure in recent weeks. Not only schools, but students and parents, have felt the pain.

As CalWatchdog.com has been reporting, the UC system has been wracked with a series of fiscal setbacks, some self-imposed. A computer system overhaul designed to save $100 million through a $170 million investment has slippedout of budgetary control, currently two years behind schedule and $50 million in the red.

Meanwhile, UC President Janet Napolitano’s insistence on 28 percent tuition hikes over five years has spurred outrage and opposition from students across the university system as well as push-back from Gov. Jerry Brown, also a UC regent. Fueling the frustration, students and teachers alike have run up against such challenges as covering basic living costs.

Health care woes

As the Los Angeles Times reported, promises made to teachers about health care coverage have begun to go unmet:

“California Common Sense, a nonpartisan research group founded at Stanford University, estimates that state government, cities including San Francisco and Los Angeles and the University of California system contribute to $157 billion in statewide retiree health care obligations. Only about $7 billion has been set aside by those surveyed by the group, leaving $150 billion in debt.”

The problem extends throughout California governments. In a study released last December, Controller John Chiang (now the state treasurer) warned:

“The unfunded liability of providing health and dental benefits for state retirees under the current funding policy is $71.8 billion. The amount represents the present-day cost to provide benefits earned as of June 30, 2014, which is expected to be paid over the lifetime of current and future retirees.

“The total unfunded obligation grew $7.2 billion from the $64.6 billion obligation identified as of June 30, 2013.”

Faced with steep costs of living, including for health care, the student population in the Golden State has embraced the Covered California health exchange — the state’s implementation of the Affordable Care Act, or Obamacare.

According to California Healthline, “Researchers released poll results that show dramatically low rates of uninsured students at California State University campuses, including a steep drop in the number of Latino students without insurance.” Since October of 2013, for instance, enrollment rates at Cal State Los Angeles dropped the uninsured rate from 41 percent to just 10 percent.

Free lunch

Just as students have flocked to subsidized health care, an increasing number have sought out free food options in an effort to balance out the cost of tuition and living expenses.

At some UCs, the cost of room and board alone exceeded $14,000 a year. At UC Berkeley, where housing is the fifth most costly in the nation, according to one survey, the figure topped $15,000.

As Southern California Public Radio reported, over the past four years about half of students polled “said they skipped meals to save money ‘occasionally’ to ‘very often.’

“And at UCLA, officials distributed in the last academic year some 3,884 meal vouchers for students in dire circumstances facing a food shortage. In 2012-2013, it gave out 7,562, and 4,652 the year before that. UC Irvine has budgeted for fewer than 100 in the first year of its voucher program.”

Ironically, SCPR observed, as the result of a hunger initiative spearheaded by Napolitano, most of the UC system’s campuses now offer students the use of food pantries.

Competing priorities

The perfect storm of budgetary strains has made its impact felt in Sacramento, where lawmakers haven’t made up their minds how much more cash to allocate to the UCs.

The most recent addition to the UC system, in Merced, opened its doors in 2005. Yet Assemblyman Mike Gatto, D-Glendale, has proposed a big new investment in yet another campus. According to the Sacramento Bee:

“The Los Angeles Democrat announced a bill Monday that would set aside $50 million for a feasibility study, land acquisition and initial building costs for a ‘UC-Tech’ campus centered on science, technology, engineering and mathematics fields, as well as the arts.

“‘Now when we have these budget surpluses is the time for bold moves,’ Gatto said.”

But in all likelihood, for most Californians in and out of school, the state has already racked up enough unmet obligations.

Originally published by CalWatchdog.com

Committee Hearing Exposes UC’s Bloated Budget

Tuition hikes marched to the head of the class at a recent hearing of California Assembly Budget Subcommittee No. 2 on Education Finance. Assembly members balked at a 28 percent tuition hike advanced by UC President Janet Napolitano and approved by the University of California Board of Regents.

According to the Los Angeles Times, “Neither the governor nor the California Legislature has the authority to force the UC regents to rescind the tuition increase.” However, the tuition hike is not included in the January budget proposal of Gov. Jerry Brown, himself also a regent, for fiscal year 2015-16, which begins on July 1.

Chaired by Assemblyman Kevin McCarty, D-Sacramento, the hearing flunked the UC system for wasteful and deceptive spending practices. A video of the hearing is here.

UC’s overall spending has grown by 40 percent to $26.9 billion since 2007, according to a report prepared for the Feb. 18 meeting. UC’s expenditures for instruction grew by 27 percent to $6.9 billion.

Yet during that same period:

  • Undergraduate enrollment by California residents increased just 4 percent.
  • Overall enrollment, including graduate and out-of-state students, increased 15 percent to more than 248,000 students.
  • Inflation increased about 12 percent.
  • The Higher Education Price Index, which measures the costs of goods and services typically purchased by U.S. colleges, increased about 18 percent.

Tuition increase

To help pay for UC’s spending increase, tuition increased 84 percent between 2007 and 2011. In Nov. 2014, the UC Board of Regents increased tuition and fees an additional 5 percent annually over the next five years to $15,564 from the current $12,192, pending legislative approval. The compounded increase is 28 percent.

Much of that tuition is supported by state taxpayers in the form of Cal Grants, which have increased from $295 million in 2007 to $882 million currently.

Some of the biggest cost drivers are employee salaries and benefits, retiree benefits and an increase in the hiring of administrators, according to the report:

  • “The number of highly paid UC employees has grown significantly. Nearly 6,000 UC employees earn gross pay of $200,000 or more. [T]he number of these employees has grown by almost 100 percent during that period, and overall pay to this group amounted to $1.8 billion in 2013.
  • “[A]dministrative staff, both in academics and other areas, grew far faster than faculty and faster than overall staff growth.” Tenure-track faculty increased just 3 percent from 2007-14, while senior management ballooned 32 percent and academic administrators grew by 19 percent.
  • UC believes its faculty members are underpaid in comparison with other universities. On average, UC’s full professors receive $150,455, associate professors make $98,804 and assistant professors get $91,155.
  • Pension benefits for more than 61,700 retirees and survivors total about $1.3 billion in the current year.
  • Employee health care costs grew between 8 percent and 11 percent annually from 2007 to 2012. Cost increases have slowed since then, but are expected to rise 6 percent this year. In addition, UC spent more than $263 million on retiree health benefits in 2014. The current unfunded liability for retiree health care is $14 billion.

The UC spending boost, tuition hikes and requests for more state government funding have created pushback in Sacramento.Gov. Jerry Brown and Assembly Speaker Toni Atkins, D-San Diego, are both UC regents and voted against the tuition hikes in November.

Brown has offered a 4 percent increase ($119.5 million) in General Fund support for UC. But only if there is no tuition hike, out-of-state enrollment doesn’t increase and UC begins to rein in costs. Brown and UC President Janet Napolitano have been meeting to work out their differences, with a report expected at the UC Board of Regents‘ meeting March 17-19.

Focus on students

At the start of the subcommittee hearing, Atkins emphasized the need for UC to get its spending in order.

“I announced in December that we would be looking at every aspect of the University of California’s budget,” Atkins said. “Every dollar appropriated [should be] spent for the intended purpose and in the right way. We will have open public hearings that are student-focused, looking at how much it really costs to educate students at UC and how we maximize UC’s acceptance of California students. No Californian should be priced out of UC.

“The state must do our best to make higher education a top budget priority. UC must do its part and become more efficient, enroll more Californians and not place increases on the backs of California students. Today marks the start of an overdue journey – a journey that will continue throughout the budget process for as long as it takes.”

Most of the testimony from witnesses at the meeting, with the exception of the UC representative, contended UC is not spending its money wisely or transparently. Paul Golaszewski, principal fiscal and policy analyst at the Legislative Analyst’s Office, led off by taking issue with UC’s contention that its professors are underpaid.

“We looked at data on faculty recruitment and retention over a number of years and concluded that it appeared that at the salary levels and the compensation levels they were offering, they had a very low turnover rate for faculty, something like 2 percent a year,” Golaszewski said. “It appeared that they were still able to get the types of faculty that they needed.”

He told the committee that it’s hard to know exactly what UC professors are doing to earn their salaries.

“Faculty workload data is much more difficult to come by,” he said. “We do have data on the student-to-faculty ratio. But that’s not telling you how much faculty are teaching. The University doesn’t track that data, the federal government doesn’t track that data. So that’s an area you might want to drill down and get a better understanding moving on.”

Undergraduates

Charles Schwartz, a retired UC Berkeley physics professor, has spent years analyzing and critiquing UC’s budgeting practices. His analysis concludes that UC spends an average of $7,500 per student on undergraduate instruction.

“They are charging undergraduates [tuition that is] almost twice what it actually costs them to provide undergraduate education,” said Schwartz. “That doesn’t sound right. What we face here is not just a UC habit of bad accounting, but a longstanding disease that infects all universities in this country. And this grossly distorts any discussion about student tuition, which is a big thing. People talk about it, but nobody says the truth about what’s going on.

“If you do not acknowledge the cost of that, and go about hiding that cost on the tuition bills of undergrads, this is not right. The challenge I bring to you is what can be done about it. The first thing you have to do must be to resolve the conflict between what I say about UC’s cost structure and what the president’s [Napolitano’s] office says it is. You need to find out which one of us is to be believed.”

AFSCME research director

Claudia Preparata, research director for American Federation of State, County and Municipal Employees, Local 3299, accused UC of having bloated management and hiding its cost. AFSCME represents 22,000 workers at UC campuses and medical centers.

“While we support more state investment, it needs to be tied to improved transparency and accountability for how UC spends its money,” said Preparata. “This is particularly true for UC executive compensation and the growth of middle management, both of which have come at a real cost to our employees, students and taxpayers. The lack of transparency obscures a redirection of money that used to fund instruction and other student services to [now] increasingly funding six- to seven-figure salaries and a growing army of middle managers.

“The numbers speak for themselves. In 2008 just 293 UC employees received gross pay in excess of $400,000 at a total cost of just $160 million. By 2013, after years of budget cuts and tuition hikes, 793 employees received these paychecks at a total cost of $452 million. During the same time period the cost of extra perks that 250 of UC’s highest paid employees receive – including housing, car allowances, moving costs and cash bonuses – swelled from $17 million to $24 million per year.

“We welcome the Legislature’s increased scrutiny of UC spending alongside a reinvestment in higher education. We believe the scrutiny should not be limited to the explosion of executive compensation, middle management, but also extend to policy directives that have paved the way for decentralizing financial decision making, eliminating transparency and enabling campus administrators to squander scarce resources, including outsourcing of UC career jobs to the lowest bidder with no accountability.”

‘Complex budget’

“It’s a very, very complex budget,” said Nathan Brostrom, the UC executive vice chancellor-chief financial officer. He believes UC has been a good steward of its funds. He described how UC has improved its pension system, which had been neglected during the financial crisis.

“First, we started contributions and dramatically increased them,” Brostrom said. “In 2009-10 we contributed zero as a university. This last year we contributed $1.3 billion – 14 percent of our employer contributions. That also couples with 8 percent from each employee. Second, we introduced a new pension tier, which increased the retirement age from 50 to 55 and the maximum age factor from 60 to 65. Finally, we also undertook internal borrowing, $2.7 billion, which has helped leverage and shore up the pension system.

“As a result, we have achieved some good results. We are now 87 percent funded, up from the mid-70s just a couple years ago. But we are bearing this entirely on our own. We don’t get any funding from the state for it, unlike any other state agency or the Cal State system.”

Aggressive efforts have also been taken to rein in health-benefit costs, he said. A new system called UC Care “is centered around our own medical centers to curb the costs and keep it in house,” he said. “We also undertook family member eligibility verification. As a result, we were able to contain the costs to 2.3 percent last year and 5 percent this year. And we are forecasting a 5 percent annual increase going forward.”

UC is also ensuring the continuation of in-state enrollment growth of 1 percent per year, or about 2,200 students, at a cost of about $22 million annually, said Brostrom.

Student-faculty ratio

One area that the UC has fallen behind in, due to a lack of funding, is the student-faculty ratio, he said. The ratio has increased to 21:1 from about 19:1 a decade ago.

“We really have not been hiring to replace the faculty members who are either leaving or retiring,” he said. “So there’s a fairly sizable amount that needs to go into new faculty hires. We also want to reinvest in instructional infrastructure, classroom technology and other instructional equipment.”

Brostrom concluded his presentation on an upbeat note. “Something we are most proud of is we are a world class university with very hard working, high achieving students, but we remain accessible to all Californians,” he said. “That’s something we not only maintained but enhanced during the budget crisis.”

Asked about the progress of Brown and Napolitano’s committee meetings, Brostrom said, “It’s been a very constructive process. We’ve been able to hear from experts both within the university and across higher education on different models and ideas. I think there will be things that will be constructive and helpful for the university to serve more Californians. Things that may help us reduce the time to [complete a] degree or increase streamlining of transfers. They may not all lead to cost reductions, but will provide more access to UC for all Californians.”

During the public comments portion of the meeting, numerous students complained about the high cost of tuition. They said it’s forced some students to become homeless, skip meals or work longer hours at a job, shortchanging their studies.

The subcommittee’s next hearing in early March will go into more detail on the UC budget, said committee Chairman McCarty.

Originally published by CalWatchdog.com

More Taxes and Tuition Buy Time for the Pension Bubble

“The ‘recovery’ is largely an illusion created by the effects of zero percent interest rates, quantitative easing, and deficit spending. The asset bubbles that have been created as a result of these policies have primarily benefited the owners of stocks, bonds, and real estate (the rich), while simultaneously deterring the savings and capital investment that is needed to actually create good paying jobs and increased purchasing power.”

–  Peter Schiff, EuroPacific Weekly, November 6, 2014

The question everyone should be asking, especially the managers of public employee pension funds, is how much longer our economy can run on zero percent (adj. for inflation) interest rates, quantitative easing and deficit spending.

When asked how we unwind all of this debt and deficits in a manner that doesn’t trigger a collapse of collateral and potentially catastrophic deflation, i.e., how do we create the preconditions for sustainable economic growth, respected economics blogger Charles Hugh Smith emailed back this answer:

“Those who foisted the debt off as safe have to absorb the losses, as did those who were conned. As it stands now, the hapless taxpayers are having to make the perps and their marks whole—that is wrong, morally and financially. The US has about $90 trillion in net worth. If $10 T were wiped off the books, it would be bad for the banks and those who trusted them, but it would not sink the country.”

Which brings us to the topic of this post.

As reported on November 16th in the Sacramento Bee:

This year, UC will pay about $1.3 billion to the pension fund, about 5 percent of its overall operating budget. UC officials want the state’s general fund to pick up nearly a third of the payment, which would cover the university’s portion of pension contributions for faculty and other employees who are paid from state funds. ‘Frankly, if the state were to pay that, we would not be proposing a tuition increase,’ said Nathan Brostrom, UC’s chief financial officer. ‘That is money that could go to other resources.’”

Like nearly every public employee pension fund in the U.S., the University of California’s pension system is underfunded. According to the Sacramento Bee, the system is 79 percent funded, which equates to a $7.2 billion unfunded liability.

What is going to happen to the UC System’s pension fund when these asset bubbles deflate?

The precariously low funded ratio challenging America’s public employee pension systems is itself based on the dangerous assumption that we are not experiencing unsustainable asset inflation. A healthy correction would lower asset values, making the basic necessities of life – housing and energy – affordable again. But a healthy correction in asset values would render pension systems insolvent because the value of their investments – already on the brink of inadequacy – would decline further.

In the public debate over this issue, there is another assumption at work, pernicious and misleading. That assumption is that faculty on the various UC campuses are making common cause with the students by insisting that state taxpayers pick up the tab for these pensions. But there is no common cause. Beneficiaries of public sector pensions are shareholders. From funds that control nearly $4 trillion in investments, this privileged class of state and local government workers collect pensions that – at least in California – average four times (or more) what someone with similar compensation (and similar withholding) can expect to receive from Social Security. And unlike ordinary shareholders, when the shares held by their pension funds decline, they are empowered to force taxpayers to cover their losses.

The faculty that populate the campuses of the University of California, and by extension, every public employee who collects a pension at taxpayer – and tuition payer – expense, have interests that coincide with the one percent of the one percent, and the biggest banks, and the hedge funds, and the Wall Street firms they love to demonize. They benefit from the asset bubble that is destroying the economic aspirations of the rest of America. When financial policymakers encouraged cheap interest rates so ordinary people could borrow more than they could ever hope to pay back, just so they could own a home, shareholders – including the biggest shareholder class in the U.S., pension funds – profited from the debt-fueled economic growth. When asset bubbles rendered a middle class lifestyle unattainable to most Americans, the public sector exempted themselves through automatic cost-of-living increases and enhanced pension benefits.

The solution to the University of California’s money crunch is to suspend cost-of-living increases, increase payroll withholding for pension benefits, and lower pension benefit formulas. Only then will the people who teach California’s youth truly be making common cause with their students.

As it is, the roadblocks to sustainable economic growth are those who benefit from debt fueled asset bubbles – super rich shareholders and their fully co-opted partners, government workers.

Ed Ring is the executive director of the California Policy Center.

UC Pension Crisis Creates Teachable Moment

Californians have abysmally low levels of civic engagement as evidenced by the recent election where voter turnout set an historic low.  And the widespread disengagement of California’s younger voters is even worse.

True, in 2008 California’s youth turned out in large numbers to elect Barack Obama as president.  And in 2012 they turned out again because, in addition to Obama being up for reelection, Proposition 30 was on the ballot.  Proposition 30, which gave California the highest income tax rate and highest state sales tax rate in America was, ironically, entitled Temporary Taxes to Fund Education.

During the Proposition 30 campaign, Governor Brown traveled to several university campuses to push the massive tax hike promising that passage would prevent tuition hikes. California’s college students, being as gullible as they are idealistic, believed the promise hook, line and sinker.  So much for critical thinking.

But perhaps California’s younger voters are finally getting wise to all the broken promises of tax-and-spend politicians and that might explain, in part, why they stayed home in this last election.  And sure enough, their increasing cynicism is proving to be well founded.

Despite the massive tax hikes ostensibly to keep higher education affordable, the University of California Board of Regents just announced a sizable increase in tuition.  And UC students are none too happy.

Turns out that the driving force behind these hikes is the growing unfunded liability of UC’s pension fund and other items of questionable compensation.  Allysia Finley with the Wall Street Journal explains:  “UCs this year needed to spend an additional $73 million on pensions, $30 million on faculty bonuses, $24 million on health benefits and $16 million on collectively bargained pay increases. The regents project that they will require $250 million more next year to finance increased compensation and benefit costs.”

Moreover, Finley reveals the extraordinary level of waste in the UC system:  “Ms. Napolitano [President of the University of California] says that the UCs have cut their budgets to the bone, yet her own office includes nearly 2,000 employees—a quarter of whom make six-figure salaries. An associate vice president of federal government relations earns $273,375 a year, plus $55,857 in retirement and health benefits, according to the state controller’s office.  Thirty professors at UC Santa Cruz rake in more than $200,000 in pay, and most faculty can retire at 60 and receive a pension equal to 75% of their final salary. More than 2,100 retirees in the university retirement system collected six-figure pensions in 2011.”

At the moment, the outrage expressed by students in their protests – one of which resulted in a shattered glass door outside a meeting of the UC Regents – seems a bit unfocused.  They’re angry but, aside from the mere fact that their education costs are rising, many are not clear about the causes.

In a weird way, UC’s pension crisis might be the ultimate teachable moment for college students who typically have little grasp of anything related to public finance.

So, students, here’s the scoop:  There’s no such thing as a free lunch.  Public employee compensation is expensive; especially pension costs that you will be paying long after those of us who are older are long gone. Government waste, fraud and abuse in California is a real problem.  Those who pay taxes – a lot of taxes – have choices where to live and move their businesses – and that may not be in California.  Debt means future costs.  You might like the idea of High Speed Rail but you might want to study both the costs and viability of any megaproject before you hop on board.

And finally, don’t buy into any promise by any politician about what they are going to do for you without first figuring out what they are going to do to you.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This article was originally published on HJTA.org