UC Board of Regents discuss budget, pension dispute Thursday

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SAN FRANCISCO – The UC Board of Regents debated the potential benefits of Gov. Jerry Brown’s proposed tax initiative and voted to clarify its stance on a controversial pension cap dispute on Thursday, the final day of the board’s three-day meeting.

While UC President Mark Yudof has called on the board to endorse Brown’s tax initiative, some regents remained wary of its impacts and said more negotiation with legislators would need to take place. Additionally, the board addressed a 1999 policy that has triggered threats of a lawsuit from UC executives seeking higher pensions.

After sustaining cuts of $750 million in 2011-12 alone, the UC will face a $200 million mid-year cut if Brown’s initiative does not pass in November.

According to a presentation given during the board’s Committee on Finance open session, exactly how much revenue Brown’s initiative would garner is unclear. The Legislative Analyst’s Office estimates earnings of $6.8 billion in 2012-13 and $5.4 billion in 2013-14. The state Department of Finance, however, projects higher numbers, with $9 billion the first year and $7.6 billion the next.

Several regents mentioned the need to educate elected officials about the importance of reinvestment in education, and the meeting’s agenda noted that the primary focus of advocacy activities has been to urge Brown and the state legislatures to make higher education a priority. The meeting’s agenda did not specify whether the board will endorse Brown’s initiative, and this was reflected by passionate comments from several regents.

“There’s nothing in here to support,” said Regent Norman Pattiz. “I want to support the governor, but I want to support something that accomplishes what we need to do to address the multiple challenges we face going forward. What we’re being asked to support doesn’t come anywhere close to that.”

Pattiz called the state an “unreliable partner,” saying that the initiative lacks binding language that will ensure the university receives the funds it is promised.

According to Lt. Gov. Gavin Newsom, the initiative “takes pressure off the general fund but it does nothing to secure the fate of the UC system.”

Newsom stressed that the board needs to continue negotiating with the governor.

“I feel very strongly that if you’re going to continue these negotiations you’ve got to take tuition off the table,” he said. “There’s got to be much more guarantee and certainty.”

Yudof, however, said he supports the initiative and recommends the board endorse it, saying it could provide “a peace treaty on tuition” and would improve the university’s financial situation. He and other administrators have been pushing state legislators for a multi-year plan to fund the university.

Claudia Magana, president of the UC Student Association, urged the board to support Brown’s tax initiative in order to prove its commitment to stopping fee hikes and state disinvestment.

“The UC system cannot absorb another cut without a huge impact on affordability, accessibility and quality,” she said.

Brown’s budget plan would add $92 million to the state’s share of employer contributions toward the UC retirement program. The university faces $362.5 million in unfunded mandatory cost increases, which include contributions to the university’s retirement program, according to the committee agenda.

Additionally, the board addressed the threat of a lawsuit the UC may face demanding higher pensions for executives.

The issue surfaced in December 2010, when a group of executives demanded that the UC should calculate their pensions as a percentage of their entire salary, and not based on the federal limit of $245,000. The executives — including vice chancellors and deans such as Dean of the Berkeley School of Law Christopher Edley — say their claim is based on a measure passed in 1999 that would increase the limit.

The board voted to clarify its stance on the measure — Yudof said the board’s stance is that the measure “never took effect for lack of appropriate action by the president or regents.”

After the vote, during the Committee on Educational Policy’s open session, the regents were briefed on the amount of private support received by the university, which has increased by 20 percent since last year. By the end of 2011, donors had given $775 million. Last year’s combined fundraising totaled $1.6 billion, according to statistics presented at the meeting.

Interim UC Senior Vice President Daniel Dooley, who presented a report on advocacy, said the university can increase revenue through corporate relationships, patents, more individual donations and philanthropy, as well as increase its visibility through social media.

According to a presentation given by Nathan Brostrom, executive vice president for business operations, the university can strengthen its finances by developing its medical enterprise, research, increasing donors and nonresidential enrollments.

Brostrom also advocated for “a student tuition plan that provides modest and predictable increases to the benefit of both the UC campuses and students and their families.”