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``... being president of the University of California is like being manager of a cemetery; there are many people under you, but no one is listening...’’

Mark Yudof, President, University of California, Sept. 24, 2009 to the NYT magazine.

I am a professor at a University of California campus.   I have chosen to spend my academic career at public universities because I genuinely believe in the value of outstanding and affordable higher education to level class distinctions.  

Now I fear that public universities may be dying, and the UC system is being offered up as a model of a public-private hybrid in development by the aforementioned President Yudof and the governing UC Regents. The proximate citable cause is the massive California budget crisis which has led to direct reductions of 25% to the approximately 20% of UC funding from the state. The real cause, I fear, is a hidden agenda to turn UC into some kind of cash cow, in a script lifted right out of the Shock Doctrine.

A preview of the concerns:

  • A declaration of emergency powers for Yudof with virtually no transparency which is like a script lifted from the Shock Doctrine.

  • 32% tuition hikes for students in one year, and it appears that the money is going to back UC bonds.  

  • A commission on the future with 24 members, of which 2 are students, 4 are faculty, and none are staff.

  • An apparent lack of vision of UC as an international treasure.  
  • Now,  I want to assure Mr. Yudof, that the students, staff, and faculty of the University of California (UC) are NOT dead! Since that execrable "interview" with the NYT magazine, Yudof has made more serious remarks and suggested a willingness to listen.  The tone of that interview was so awful though that the level of PR damage was huge within the UC community.  

    On the same day that Yudof gave his interview, Sept. 24, the first day of classes for most UC campuses, course walkouts were held. From Davis to San Diego, from Merced’s Sierra foothills to Santa Barbara’s shores, thousands of us marched with peaceful shouts of  "It’s OUR University!"   The proximate cause of these protests was a cut of 25% to the state provided portion of our budget, which led to employee furloughs, layoffs, and course reductions. While I did not walk out on my class that day, I did use a portion of class time to discuss the key issues and did participate in the protests.  

    Our protests were not the whines of malcontents unwilling to accept budget cuts; we recognize that hard times demand sacrifice.  However, we also understand that problem is much bigger than merely this year’s deficit:  will California – and the nation - preserve excellent, accessible, affordable public higher education?  

    (As I mentioned above, I believe in public universities.  I was an undergrad at a great public university (U of Washington) and a grad student at a great Ivy League school (Cornell). In Seattle, I could actually pay my way through school sophomore-senior years working half time.  Those days are gone for todays youth. )

    UC has long been an international treasure, particularly in the five decades since then UC President Clark Kerr and colleagues developed a widely copied "Master Plan" for a tiered, interwoven network of community colleges, state universities, and world class research oriented campuses (the UCs).  The plan was centered on a state commitment to properly fund higher education at levels rendering it affordable, and on merit based student mobility within the system, from community college to UC.

    This plan spurred UC to grow to our present 10 campuses. Through generations of graduates, the Plan has driven California’s economy (think Silicon Valley-and UC Grad Gordon Moore, biotech, agritech, and more recently nanotech) and left a legacy of  great art and discovery (through alums like filmmaker Charles Ferguson, novelist Terry McMillan, Nobel Laureate and Energy Secretary Steve Chu, and faculty like physicist/astronaut Sally Ride and painter Wayne Thiebaud).  Although the legislature has limited the access of UC graduate education to foreign born students, there are many who have become ambassadors for UC and America out of their time here studying for masters or PhDs.  I myself have advised three PhDs at UC from other countries (Taiwan, China, Germany).

    Moreover, the master plan leveled hierarchy by an informal adherence to the tenet of "shared governance’, with equal say for Regents, the UC President, and faculty. Through shared governance the central activities of education and research received the full attention of administrators and Regents. Personally, I would add to this governance structure some representation by students and staff.  There are nominal appointments of one faculty and one student to the UC Regents (no staff).  

    The Master Plan has worked spectacularly: UC grabbed the top three spots (and six of the top 25) in a recent Washington Monthly ranking of US universities. Note that unlike the US News & World Report rankings which rank on frankly elitist factors,  always favor private universities over public ones, the Washington Monthly rankings include a "social mobility" factor that increases the weight of public universities.  

    Despite this success, state support over time has dwindled to just 17% of the UC budget thanks to a mindset favoring new prisons over education, and a legislative budgeting process held hostage by an entrenched Republican minority which reflexively chooses cuts over revenue increases and diversification.  

    Despite these cuts, the UC campuses have resisted the temptation to give up their service mission to the daughters and sons of California.  In states like Oregon, Colorado, and Michigan, where dwindling state support to universities has limited the public contribution to 10% or less, big campaigns have been made to recruit large numbers of out of state students, and residency laws were tightened.  These out of state tuition pays are big revenue makers for the universities.  

    While state budget priorities set by Gov. Schwarzenegger and the legislature concerned the 9/24 protestors, we were equally troubled with actions by President Yudof  and the Regents.  Under the guise of this fiscal crisis, Yudof was granted vaguely stated emergency powers. He has since put forward a plan to jack up tuition 30% by next academic year and discussed how UC could become a "public-private hybrid", something he first espoused seven years ago as president of the University of Minnesota. With the regents he formed a "Commission on the Future" to plan for sweeping changes to UC.   This 24-member commission includes no staff, two students, and four faculty; questions for meetings must be submitted over the web one week in advance.  A scan of the priorities of the commission shows they do not look visionary in the least.  I would assume they were determined in advance.  Of the four faculty, two are med school profs who were in the systemwide Academic senate and two were grudgingly added by Yudof from arts and science faculties after protests from the Faculty association.  When I asked my class what they thought the composition of this commission should be, given it had 24 members, they said 12 students and 12 faculty.  You will be happy to know that the head of the California Chamber of Commerce made the list.

    Clearly, President Yudof and the Regents have abandoned Shared Governance; with no transparency, they prefer to ram through a plan for UC’s future as though its present and future students, staff, and faculty are indeed dead. Indeed, although distinguished faculty were named to the search committee hunting for Yudof, his selection was rammed through by then Regents chair Richard Blum (AKA Mr. Dianne Feinstein) with essentially no faculty consultation.  I can assume that his previous statements about creating a public-private hybrid were deemed attractive by Blum and the regents.  

    The tuition hike bears particular scrutiny.  The nominal reason is the budget cut - and make no mistake, next fiscal year will be far, far worse.  However, left unsaid is that UC wants to protect its blue chip bond rating, which allows it to do considerable construction business on its ten campuses.  Bob Meister of UC Santa Cruz hasposted a remarkable analysis of this use of tuition funds as collateral for bonds.

    I will quote a few key passages from this eye opening post - first he makes the case that it is undeniable that the Regents and Yudof have been like neutron bombers - they want to save buildings over the students, staff, and faculty that would inhabit them:

    Because UC pledges 100% of tuition to maintain its bond rating, it has also implicitly assured bond financiers that it will raise your tuition so that it can borrow more. Since 2004, UC has based its financial planning on the growing confidence of bond markets that your tuition will increase. (Why? Because you’ve put up with this so far, and because UC has no other plan. Its capacity to raise tuition is advertised in every bond prospectus.)

    (Before I go on, you should understand that there’s a difference between using your tuition as collateral for construction bonds and actually spending to pay the interest on those bonds. UC now spends some tuition revenue on debt service, and is likely spend more for this purpose as it borrows more against tuition. Since 2004, all of your tuition has been pledged in the sense that it will be paid into an account held by the bond trustee in the event of default.)

    In pledging all your tuition as collateral for its bonds, UC is relying on a simple notion which, if used by an individual trying to borrow money, would go like this: if you had a good paycheck and you expected to have steady raises in the future, you could pledge your whole paycheck to secure a loan. Your bank might offer you a lower interest rate for pledging it all without expecting you to use it all to service your debt. You could then still live off your paycheck as well as get a lower interest rate. UC has done just that with your tuition. It considers itself smart to have made this kind of deal. In 2008 it paid 0.2% less in interest for bonds backed by tuition (and all General Revenues)[2] than for bonds funded by project revenues alone, such as those that paid for employee parking garages.

    Is this inevitable as university budgets tumble?  Would full private universities do the same? Nope.  

    To people in the financial world, it’s already obvious that UC committed itself to raise tuition and cut budgets when it decided in 2004 to secure its bonds. Most of my UC colleagues—faculty, students and staff—nevertheless find it unthinkable that UC would actually raise tuition and cut instruction in order to fund construction. People understand that UC wants to build. What’s unthinkable is that UC would still want to build rather than protect its programs and people when other great universities, including Harvard, indefinitely postponed new construction when their endowment income fell. Why? Because protecting people and programs seem to be a higher priority for Harvard than for UC.

    Meister points out that the legislature would not support the funding of these bonds, so that the burden is being born by the students.  How like the Chicago school economists and their despotic cohorts so chillingly outlined in the Shock Doctrine so brilliantly by Naomi Klein.  Use the appearance of an emergency to extract capital from the people - in this case the tuition currency of the students, and the real salary of the staff and faculty diminished by furloughs.  

    The idea that UC can become a cash cow - here for financial institutions and construction companies - is not new. Bush's crony Gerald Parsky as chairman of the board of regents succeeded in getting the wildly successful UC Retirement System out of the management of a very effective public servant and into the domain of his buddies in the financial industry.  A system which faculty have not had to pay into for nearly 20 years devolved into one that we pay millions to manage and has performed far more poorly under private management than public.

    The UC story is one I hope can be reversed.  A clear lesson from this blog and its inimitable leader is that we need to crash the gates of power - the regents and Yudof are thumbing their noses at the notion of shared governance, which means the faculty - and staff and students - must collectively grab a seat at the table.  

    I encourage President Yudof to heed one voice from beyond, that of the late Clark Kerr.  His powerful and visionary leadership in creating a university of opportunity and excellence is what we need now in this fight for UC’s life.  I, and the 9/24 protesters, will look for Mr. Yudof to rise to that challenge. If he does not, those gates are coming down.  

    Originally posted to dlcox1958 on Wed Oct 14, 2009 at 12:20 AM PDT.


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