Regents, state clash on long-term UC financial plan

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At its meeting this week, the UC Board of Regents is set to establish a new long-term funding model centered on the university’s tuition increase plan released earlier this month.

The university has budgeted for additional expenditures to go to slight faculty salary increases, deferred maintenance on campus buildings and infrastructure and investment in academic quality initiatives such as lowering the student-to-faculty ratio.

But the new model has been criticized by both the state and student representatives. Though the state and the university have clashed on the tuition increase policy, the disagreement between the two entities extends more deeply to how the state’s flagship public university should fund itself and spend its money.

Gov. Jerry Brown supports higher efficiency in both administration and instruction, meaning he thinks the university should do more with the money it already has rather than asking for additional investment, according to H. D. Palmer, spokesperson from the state Department of Finance.

The origin of tuition increases, however, has historically been state funding cuts rather than an inefficient and growing cost of instruction, according to Hans Johnson, a senior fellow at the Public Policy Institute of California.

“From the best accounting measures we could develop, we found no evidence that increasing tuition is coming from increasing costs of instruction,” Johnson said.

The new funding model would balance state funding increases, tuition increases and money-saving efficiencies to raise an additional $459 million in funds for next year, $73 million of which would be reserved for additional financial aid.

The tuition increase plan includes increases of up to 5 percent per year for the next five years, which could be reduced or eliminated if state funding exceeded expectations.

The university also released its budget model based on holding tuition constant, which reflects Brown’s funding plan. Under this model, the university would replace extra tuition money by enrolling more nonresident students and limiting state enrollment growth. It would raise $380 million, $16 million of which would be reserved for additional financial aid.

Palmer said this second proposal seems neither creative nor innovative. Tuition increases could be avoided without limiting California enrollment, he said.

Yet Johnson said enrollment increases have historically been funded by the state.

“If we want to fund enrollment increases for Californians, it would almost certainly require increased funding,” Johnson said.

Palmer also pointed to the fact that the university will receive enough money from the state and its own efficiency measures to pay off its mandatory cost increases next year, with about $74 million left over.

“Based on that, it would seem a tuition increase isn’t necessary,” Palmer said.

But the university’s “mandatory costs” don’t include small pay increases for faculty or any money for deferred maintenance or investment in academic quality, according to the UC budget. Just these additional costs add up to about $225 million, well above the $74 million left over.

Kevin Sabo, the UC Student Association board chair, said students have been caught in the middle, with the state saying tuition increases are the fault of the university and the university saying they’re the fault of the state.

Sabo said both parties are at fault — the state for making university funding such a low priority and the university for not sufficiently including students in its budget decisions and not releasing the budget data required under a law passed in 2013.

“There’s certainly failure on the part of the university,” Sabo said. “There is no formal way for the students to have a say in these budget decisions.”

But Jeffrey Seymour, former UC alumni regent and representative of the Yes to Higher Ed campaign, said the university required additional funding to maintain its standard of excellence. He said UC Berkeley was the best example of this need.

“Our fear is that, and actually it’s already happening, without adequate resources, UC Berkeley’s status as a world-class institution will be threatened,” Seymour said.

Daniel Tutt is the lead higher education reporter. Contact him at [email protected] and follow him on Twitter @danielgtutt.