UC System Funding Cuts Forum

[starstruck393]

I hadn't seen this posted yet. It's from the WSJ last week, and gives an interesting perspective on one of the factors driving funding cuts to the UC system. Something to consider for those considering UC law schools (especially with the huge tuition hikes coming), those who are going to be relying on Boalt's LRAP, etc. http://online.wsj.com/article/SB1000142 ... 44470.html

* MARCH 10, 2010
California's College Dreamers
When will students figure out the politicians have sold them out?

Hundreds of University of California students rallied against a 32% tuition hike last week. Let's hope their future employers get a better work product. With just a little research, the students could have discovered that compensation packages won from the state by unions were a big reason for the hike.

Last year, the state cut funding to the 10-campus system to $2.6 billion from $3.25 billion. To make up for the reduction in state funding, the UC Board of Regents increased tuition to $10,300, about triple 1999's cost.

Understandably, students have gone wild. The UC system is supposed to offer low- and middle-income students a cheaper alternative to a private college education. Now a year at a UC school can cost students as much as at many private schools.

Who's to blame? UC President Mark Yudof rightly notes he had no other means of closing the university's budget gap. The university used $300 million in reserves last year and cut staff salaries by furloughing them between 11 and 26 days this year. Governor Arnold Schwarzenegger says "we've done everything we could, but the bottom line is it's not enough. We need to put pressure on the legislature not only this year in a year of crisis, but in the future."

The California legislature? Good luck with that. In 1999, the Democratic legislature ran a reckless gamble that makes Wall Street's bankers look cautious. At the top of a bull market, they assumed their investment returns would grow at a 8.25% rate in perpetuity—equivalent to assuming that the Dow would reach 25,000 by 2009—and enacted a huge pension boon for public-safety and industrial unions.

The bill refigured the compensation formula for pension benefits of all public-safety employees who retired on or after January 1, 2000. It let firefighters retire at age 50 and receive 3% of their final year's compensation times the number of years they worked. If a firefighter started working at the age of 20, he could retire at 50 and earn 90% of his final salary, in perpetuity. One San Ramon Valley fire chief's yearly pension amounted to $284,000—more than his $221,000 annual salary.

In 2002, the state legislature further extended benefits to many nonsafety classifications, such as milk and billboard inspectors. More than 15,000 public employees have retired with annual pensions greater than $100,000. Who needs college when you can get a state job and make out like that?

In the last decade, government worker pension costs (not including health care) have risen to $3 billion from $150 million, a 2,000% jump, while state revenues have increased by 24%. Because the stock market didn't grow the way the legislature predicted in 1999, the only way to cover the skyrocketing costs of these defined-benefit pension plans has been to cut other programs (and increase taxes).

This year alone $3 billion was diverted from other programs to fund pensions, including more than $800 million from the UC system. It is becoming clear that in the most strapped liberal states there's a pecking order: Unions get the lifeboats, and everyone else gets thrown over the side. Sorry, kids.

Get ready for more. The governor's office projects that over the next decade the annual taxpayer contributions to retiree pensions and health care will grow to $15 billion from $5.5 billion, and that's assuming the stock market doubles every 10 years. With unfunded pension and health-care liabilities totaling more than $122 billion, California will continue chopping at higher-ed.

Mr. Schwarzenegger has routinely called for pension reform, but the Democratic legislature has tossed aside the Terminator like a paper doll. Last year, he proposed rescinding the lucrative pension pay-off for new employees, which he estimated would reduce pension pay-outs by $74 billion and health-care benefits by $19 billion through 2040. More recently, he called for doubling state worker contributions to their pensions to 10% from the current 5% of their pay. But these propositions have little traction in the legislature.

California has a governor's race on, and the candidates are semi-mum on this catastrophe. Democratic candidate Jerry Brown has supported modifying public employee benefits but hasn't offered specific proposals and opposes defined contribution plans. Republican Meg Whitman supports increasing the retirement age to 65 from 55 and asking employees to contribute more to their benefits, but she won't support a reform ballot measure for fear it would drive up union turn-out in November.

Memo to marching students: The governor can't save you. You guys need a new legislature. This one is selling you out. Organize an opposition and vote them out in November. Plan B is quit school and become a state billboard inspector.

[bk1]

This ignores the fact that the state and local governments can only attempt to raise taxes with both hands tied behind their backs while simultaneously fellating the public in an attempt to get such measures passed.

[fortissimo]

lolz, as if protests can solve CA's huge budget crisis and CA's shitty economy.

The top privates are definitely better deals for undergrad than the UCs for many, even in-staters, because they offer FAR MORE need-based aid, if you can get into them. The UCs are too poor to offer many need-based aid. My friend from a poor-ish family got (almost) her entire undergrad education funded via need-based grants at UPenn while her brother had to pay about 50% of his tuition at Berkeley.

That would really suck if Boalt ended up increasing tuition AND decreasing LRAP aid. Who knows what will happen. This is why people should really be relying on hard-cash (merit aid).

[Puffy]

Protests are a way to show the politicians that the UC system is not an easy target they can keep going back to for cuts. Only stupid people fail to realize this and as a consequence the UCs and its students suffer while other programs and other constituents are left untouched.

[fortissimo]

Protests are a way to show the politicians that the UC system is not an easy target they can keep going back to for cuts. Only stupid people fail to realize this and as a consequence the UCs and its students suffer while other programs and other constituents are left untouched.

They have been cutting from almost all other programs. Everything is pretty much screwed. I guess they can increase taxes despite the increasing unemployment though, or perhaps kick out the illegals and cut more from "public welfare" programs.

[cardnal124]

Protests are a way to show the politicians that the UC system is not an easy target they can keep going back to for cuts. Only stupid people fail to realize this and as a consequence the UCs and its students suffer while other programs and other constituents are left untouched.

Protests are one way. Leaving the system is a better way. No good students => shitty ranks => fewer students/revenue.At least the hard working union people are making 6 figures for doing nothing, thats a comfort.

Seriously though, a student going to the UC system is like a chicken going to KFC.

[fortissimo]

Seriously though, a student going to the UC system is like a chicken going to KFC.

hahahaha

[twert]

i don't understand why the UCs have to be so cheap. the CSUs are cheap. the UCs are world class research schools. i think its ok to charge high tuition. i personally don't really like subsidizing UC riverside and merced. if something needs to be cut cut them.

[gatorlion]

i don't understand why the UCs have to be so cheap. the CSUs are cheap. the UCs are world class research schools. i think its ok to charge high tuition. i personally don't really like subsidizing UC riverside and merced. if something needs to be cut cut them.

The whole point of the UC system was to provide quality education at a reasonable price. The way that things are going, you will get your wish for private institution-like rates at UCs like UCLA and Berkeley. It will be a sad day for public education when that happens, but a minority of the legislature is making absolutely sure that no additional money will be appropriated for higher education. It's about politics- some elected officials are so wildly fearful of raising taxes that they are willing to gamble the future of higher education in the state. Quite plainly, they are not afraid of students getting them thrown out of office, they haven't been to school in years if not decades (so they really do not care what happens to the UC system), and they do fear alienating their constituents by increasing taxes while unemployment is high. As UC students, we do not have the kind of bargaining chips that will persuade representatives to vote otherwise. (Coming from a grad student who led a delegation of grad students at my UC to lobby our elected officials on March 1st)

[rayiner]

Fucking old people. California is *literally* mortgaging the future of it's young people to make it's old people more comfortable.

[rodewan]

Fucking old people. California is *literally* mortgaging the future of it's young people to make it's old people more comfortable.

+1

[cardnal124]

I am California.

My likes: Illegal immigrants, old people, and unions.

My dislikes: logic, balanced budgets, young people, and reasonable fiscal policy.

[twert]

i don't understand why the UCs have to be so cheap. the CSUs are cheap. the UCs are world class research schools. i think its ok to charge high tuition. i personally don't really like subsidizing UC riverside and merced. if something needs to be cut cut them.

The whole point of the UC system was to provide quality education at a reasonable price. The way that things are going, you will get your wish for private institution-like rates at UCs like UCLA and Berkeley. It will be a sad day for public education when that happens, but a minority of the legislature is making absolutely sure that no additional money will be appropriated for higher education. It's about politics- some elected officials are so wildly fearful of raising taxes that they are willing to gamble the future of higher education in the state. Quite plainly, they are not afraid of students getting them thrown out of office, they haven't been to school in years if not decades (so they really do not care what happens to the UC system), and they do fear alienating their constituents by increasing taxes while unemployment is high. As UC students, we do not have the kind of bargaining chips that will persuade representatives to vote otherwise. (Coming from a grad student who led a delegation of grad students at my UC to lobby our elected officials on March 1st)

i don't think the point of the UC's is to provide reasonably priced education. that is the point of the CSUs (which provide an arguably better undergraduate product). the point of the UC's is to attract world class minds to california, fuel research in technology and medicine, keep pharmaceutical companies in-state by giving them a workforce of highly trained scientists. it is therefore unnecessary to have so many UCs, and it is unnecessary that they be super cheap.

[gatorlion]

i don't understand why the UCs have to be so cheap. the CSUs are cheap. the UCs are world class research schools. i think its ok to charge high tuition. i personally don't really like subsidizing UC riverside and merced. if something needs to be cut cut them.

The whole point of the UC system was to provide quality education at a reasonable price. The way that things are going, you will get your wish for private institution-like rates at UCs like UCLA and Berkeley. It will be a sad day for public education when that happens, but a minority of the legislature is making absolutely sure that no additional money will be appropriated for higher education. It's about politics- some elected officials are so wildly fearful of raising taxes that they are willing to gamble the future of higher education in the state. Quite plainly, they are not afraid of students getting them thrown out of office, they haven't been to school in years if not decades (so they really do not care what happens to the UC system), and they do fear alienating their constituents by increasing taxes while unemployment is high. As UC students, we do not have the kind of bargaining chips that will persuade representatives to vote otherwise. (Coming from a grad student who led a delegation of grad students at my UC to lobby our elected officials on March 1st)

i don't think the point of the UC's is to provide reasonably priced education. that is the point of the CSUs (which provide an arguably better undergraduate product). the point of the UC's is to attract world class minds to california, fuel research in technology and medicine, keep pharmaceutical companies in-state by giving them a workforce of highly trained scientists. it is therefore unnecessary to have so many UCs, and it is unnecessary that they be super cheap.

Tell that to students at UC Merced or UC Riverside who want and deserve a good education, but do not have the credentials to gain admittance to UCLA or Berkeley. It is not a question of necessity, but priorities and pragmatism. It may simply be financially unsustainable to offer a world class education at a bargain price, but it's not an inherently bad idea. Unless things change dramatically, we will watch the end of the UC system as the best public school system in the world in the next few years. That is truly a shame.