Transcript Basic charts from the UC Budget 2009

Akos Rona-Tas, UC San Diego
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Washington Monthly’s ranking
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U.S. News and World Report ‘s ranking of public schools
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UCB 1st, UCLA 2nd, UCSD 7th, and 3 more in top 20
The Academic Ranking of World Universities by Shanghai Jiao Tong University
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UCB, UCSD, and UCLA are top in, based mainly on Social Mobility (recruiting and graduating
low-income students), and Research (cutting-edge PhDs).
Four UC campuses in the top 20 in the world (UCSD ranked 14th)
Excellence in research
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11 Nobel Prizes in the last 10 years
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Currently
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2009 Elizabeth Blackburn, UCSF, biology, Oliver Williamson, UCB, economics
2008 Roger Y. Tsien, UCSD, chemistry
2004 Irwin Rose, UCI, chemistry, Finn Kydland, UCSB, economics, David Gross, UCSB, physics
2003 Clive Granger, UCSD, economics,
2001 George Akerlof, UCB, economics,
2000 Herbert Kroemer, UCSB, physics, Alan Heeger, UCSB, chemistry, Daniel McFadden, UCB, economics
33 Nobel prize winners, the highest at any university (8 @ UCSD) ,
5 Field Medalist (1 @UCSD),
13 National Medal of Science laureates (3 @UCSD),
25 McArthur fellows (8 @UCSD)
UC library system has 34 million items and is one of the largest collections in the world
UC researchers create 3 new patents a day
Numbers are on UC’s side:
1. California is 48th in the proportion of high
school graduates going to 4-year college
2. Number of high school graduates remains high
and stable
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Annual general operating budget of UC is $19 billion
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The “Core Funds” that pay for the core mission of UC: instruction, research and public service is $5.6
billion
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Originally, in 2008-2009, $3.2 billion of that was expected to come from the State of California
UC has 220,000 students
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-- a little less than the entire economy of countries like Panama, El Salvador or Jordan
-- a little more than the entire economy of Bolivia, or Paraguay or Iceland
Princeton 7,334, Stanford 15,000, University of Michigan 41,000, University of Illinois 41,500
CSU has 433,000 and CCC 1,628,000 http://www.cpec.ca.gov/SecondPages/DetailedData.asp
(
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UC has 170,000 faculty and staff
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size of Walgreen and Pepsi Co.,
it would be in the top 25 biggest US companies
UC has been defunded since 2001
Slow, gradual cuts 2001-2008
Dramatic, giant cuts 2009-2010
The Funding of UC
UC Core Funds
The University’s “core funds,” comprised of State General Funds, UC General
Funds, and student fee revenue, provide permanent support for the core
mission activities of the University: instruction, research, and public service,
as well as the administrative and support services needed to carry out these
activities. Totaling $5.6 billion in 2008-09, these funds represent 28% of the
University’s total budget.
UC General Funds
In addition to State General Fund support, certain other fund sources are
unrestricted and provide general support for the University’s core mission
activities. Collectively referred to as UC General Funds, these include:
- a portion of overhead on federal and state contracts and grants;
- DOE laboratory operations overhead and management;
- nonresident tuition;
- fees for application for admission and other fees;
- a portion of patent royalty income; and
- interest on General Fund balances.
Based on recent trends and nonresident enrollment projections and tuition
levels, the University expects to generate $594 million in UC General Funds
during 2008-09. The largest sources of UC General Funds are nonresident
tuition, accounting for $257 million, and indirect cost recovery on federal
contracts and grants, totaling $252 million in 2008-09.
Comment: The UC charts do not reflect the big cut in 2009
HEPI=Higher Education Price Index
Source: http://budget.ucop.edu/rbudget/200910/200910BudgetforCurrentOperations-BudgetDetail.pdf
Comment: In the chart to the left student fees are net of financial aid.
Student Fees
Return-to-Aid
Comment: Aid includes loans and gift aid.
Access
the total cost of attendance:
resident student fees,
living and personal expenses,
costs related to books and supplies,
transportation,
health care
Student-Faculty Ratio
Since 1994, the University has maintained a
budgeted student-faculty ratio of 18.6:1. Before
the cuts of the early 1990s, the University’s
student-faculty ratio was 17.6:1; the deterioration
in the ratio represented about 500 faculty
members.
Faculty Pay and Pension
Eight percent pay cut
Hiring freeze
Slow loss of top faculty
Cut in staff
Comment: This does not reflect the 2009 cut the
green line shows what should have happened but did
not.
Comment: This chart was compiled around October 2008 and it does not reflect recent losses.
Administration
(Institutional Support)
Comment: The text indicates elsewhere that
the budget of UCOP is around 280 million
(p.107). Of that 57 million is being cut but 26
million of the cut is redirected to the campuses.
Institutional Support
Services provide the administrative infrastructure for the University’s operations. Grouped into five broad categories, institutional support
activities include:
- Executive Management — offices of the President, Vice Presidents, Chancellors, and Vice Chancellors; planning and budget offices;
- Fiscal Operations — accounting, audit, and contract and grant administration;
- General Administrative Services — computer centers, information systems, and personnel;
- Logistical Services — purchasing, mail distribution, and police;
-Community Relations — development and publications.
Comment: Institutional Support does not include academic support or operation and maintenance of plant.
Note: UC and CSU excluding Community Colleges
Source: http://www.ebudget.ca.gov/pdf/Enacted/BudgetSummary/FullBudgetSummary.pdf
Notes: IHSS (In Home Supportive Services) -- in home care,
DDS (Department of Developmental Services) – disability care,
Medi-Cal -- healthcare for the poor
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Higher education has been underfunded to compensate for
increased funding needs in two main areas:
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Healthcare
 Rising healthcare costs, large uninsured population
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Prisons
 In 2009: 173,000 inmates
 1977 [before the War on Drugs] 20,000 inmates,
 in 1994 [before the Three Strikes law] 125,000 inmates
 31,000 correctional officers – highly organized lobby
 $46,000/year is spent on one inmate
 Compare: $9,560/year spent on one UC student
 Average gross pay of a correction officer is $72,000
 This is the pay of an Associate Professor at UC
At the end of 2008-09 the state cut
$814.1 million,
but gave back $716 million from the
stimulus package.
After adjusting for cost increases on
the expense and fee increases on the
revenue side, the total cut to the core
funds was $240.7 million.
This year, there will be another
$637.1 million cut.
After adjusting for everything,
including fee increases ( $452.9
million), in two years,
$776 million was taken from the
core funds.
This is $3,500 per student on top of
the tuition increase.
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Efficiency arguments
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State subsidies make universities less competitive
 Lower quality
 more private universities in the top ranks
 countries with larger sector in higher education have more top ranked universities
 More waste
 universities spend on unnecessary things – administration, nice dorms etc.
 More useless subjects
 No pressure to produce useful skills
 Less motivation
 Free tuition make students appreciate education less
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Fairness arguments
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The main beneficiary is the student
 the student should pay
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State subsidies are unfair taxation
 Everyone pays taxes, mostly the middle and upper middle class go to
college: take from the poor and give to the rich
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Freedom arguments
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Students are more free
 can choose from more options
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Professors are more free
 state cannot interfere with teaching
Two ways to balance our budget
Raising revenue
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Raise tuition
 -- to $23,000 to replace the state’s entire contribution up to 2008 levels
 -- to $28,000 to do the same up to 2001 levels (the last “good year”)
 Differentiate tuition
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Increase number of out-of-state students
Increase other revenues
 Summer utilization of campuses
 EAP
 Foreign campuses
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Private donors
Corporate sponsorship
Cutting costs
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Larger classes
More non-ladder rank faculty
Distance learning
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Efficiency Argument
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Inefficient market: the market does not necessarily know best
 universities should not be limited to teaching knowledge that seems practical
and in high demand at the moment – we need both Einstein and accounting
 Must not just focus on short term demand that changes rapidly
 Must provide basic skills useful in the long term – including critical thinking
 different instructional cost of different disciplines
 the quality of university instruction is hard to gauge – race to the bottom
 Compete amenities? Entertaining classes? Sports team? Parties? Why not sell grades?
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Fairness Argument
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Public benefits – students should not bear the main burden
 more students with college degrees:
 less unemployment, crime, healthcare expense,
 more inventions, better technology, less expensive work force, higher economic growth,
higher real estate value,
 also more civic volunteering, political participation, better public schools
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Access – should depend only on merit
 the poor and the historically underrepresented will lose access
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Freedom argument
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Students’ choices will be limited to schools they can afford
Profs will have less freedom -- corporations will call the shots
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Proposals to increase state revenue:
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Restoring budget priorities
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Tax on oil drilling -- $1-2 billion
Raising the vehicle license fee -- $0.5 billion
Tax on tobacco -- $1 billion
Restoring tax breaks given to large corporations in February
2009 – $2.5 billion
Pass healthcare reform!
Criminal justice reform
Abolishing the 2/3 majority rule established by Prop
13 in 1978 – by a new proposition
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To put a proposition on the ballot: 8% (for a constitutional amendment) or 5% (for a statute) of the number of
people who voted in the most recent election for governor must sign a petition.
Federalization of some campuses (Birgeneau-Yeary
plan)
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UCSD
http://savingucsd.ning.com/
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http://blink.ucsd.edu/sponsor/budgetline/index.html
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UCLA
http://savingucla.ning.com/
UCOP
http://www.ucop.edu/
Professor Christopher Newfield’s blog
http://utotherescue.blogspot.com/
Professor Charles Schwartz’s site
http://universityprobe.org/