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Gov. Brown discusses Prop. 30, answers questions from UC student media

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Jerry Brown speaks at a rally for Proposition 30 in UCLA.


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OCTOBER 22, 2012

Gov. Jerry Brown discussed the state of higher education in California last week with representatives from student newspapers across the UC system.

During the interview, Brown commented on the state’s decreasing financial investment in higher education and emphasized the importance of voters passing Proposition 30 at the polls this November. If passed, the initiative will raise the income tax for the highest earners in California and increase the sales tax by a quarter of a percentage point for four years. If Prop. 30 is not passed, the university will be dealt $250 million in midyear budget cuts.

Below is a transcript of Brown’s responses to questions posed by the newspapers.

The California Aggie, UC Davis: If Prop. 30 fails to pass, will any one area be more affected: K-12 education, community colleges, CSUs or UC?

Brown: The way the budget was enacted, the UCs will lose $250 million if the ‘no’ vote prevails on Prop. 30. The Cal State Universities will also lose $250 million, and the community colleges will lose about a half a billion dollars, and the K-12 schools will lose about $4.5 billion, and, as a matter of fact, the UCs may even lose more money because there’s a certain tuition buyout that also might be lost, so there are big stakes in the Prop. 30 election.

The California Aggie: A competing tax initiative, Proposition 38, is also going to be on the ballot but what are your thoughts on Prop. 38, and do you believe it will affect the outcome of the passing of Prop. 30?

Brown: Actually, I don’t. Thirty-eight is a separate measure that aims to achieve slightly different results. I prefer Prop. 30 because it has been drafted with a view to the budget architecture and how new taxes can work together with the rest of general fund spending, and it also and perhaps most importantly prevents the cuts this year. The trigger cuts only go into effect if Prop. 30 gets a “no.” So the most important thing, regardless of what people do on any other measure, is to vote “yes” on 30. That stops the cuts, and that’s why I think it’s so important. And it provides the revenue going forward.

The New University, UC Irvine: So what is your response to supporters of Prop 38 and to opponents of Prop 30, especially regarding how the money will be handled through the general fund if Prop. 30 passes?

Brown: It’s very clear if your read the text of Prop. 30: The money is put in a special fund that can only be used for schools and community colleges, and that’s a fact. Now, I think it’s well to point out that both these tax measures add a certain amount of money, which, relative to the total state spending on education, is no more than 20 percent, and therefore 80 percent of the spending is through the authority of the Legislature and the governor. And that 80 percent is always subject to legislative enactment every year. The taxes, on the other hand, can be allocated to special funds audited and absolutely guaranteed to go to the schools, but unless you cease having all of government, you can’t affect the fact that if the other 80 percent is cut back; then, that reduces the sum total. So if education funding is $50 billion, and you add another six or another 10, if that 50 billion is reduced to 48, then the net is not as much as we might want. That is just the way it is.

Now, there is such a hostility to government that some people almost feel that the government can’t be trusted with tax dollars, so the corollary of that would be not to have an elected government and to have something on automatic prescription by way of some constitutional amendment — a completely unreal possibility, so we say. And it is the absolute truth that the money goes into a fund; it is audited and it will be publicly available, and that money is going to go there.

Equally important is the fact that because of the budget, we’re not talking about the taxes … the budget assumes Prop. 30’s money comes in this year. If that assumption turns out to be wrong because the “no” vote gets 50.1 percent, all these drastic cuts will take place even if Prop. 38 is passed. And, by the way, the reason this happens is because when I was putting the budget together, we didn’t have enough money, so we had to either cut another $6 billion or $8 billion, so we said, let’s assume the people vote new tax revenues, and then we’ll say the cuts only go into effect if the people vote “no.” Now, the reason we have to do that is the state borrows money during certain months of the year when the tax revenues don’t come in at the rate needed for immediate spending. In order to borrow the money from Wall Street, the banks, you have to have a credible balanced budget. You can’t have a credible balanced budget if 6 or 8 billion of it is a contingency that may never occur so the only way you can make it a reliable budget guarantee is that you have plan B, which is what we call the trigger cuts, and that plan is part of the budget architecture and inextricably linked to the fate of Prop. 30.  That’s why it’s absolutely crucial for every person who cares about the University of California to make sure that Prop. 30 passes.

The New University, UC Irvine: How important is the relationship between the state and public higher education in California, and how could it change if Prop. 30 potentially fails?

Brown: If Prop. 30 fails, the regents already said they’re going to raise tuition by $2,400 at the beginning of the new year, and the reason is the state has been reducing state support for years, and that’s why tuition has doubled.

You may say, Why is that? Well, if you just compare when tuition was 125 bucks a semester — well, that’s when I went to the UC, but it still wasn’t that much higher when I was governor, but at that time in 1975, 1977, 1978, 1980, the percentage of the general fund going to prisons was under 3 percent. It was between 2.5 and 3 percent. Two years ago, prison spending went to 11.5 percent. In my budget program, it is slated to drop to 7.5 percent because of reducing prison populations, so we’re on the move there.

Another expenditure that has grown is the health and human services aging population, more expensive medical care, in-home supportive services. These are all very important, but they’re expenditures that didn’t exist at the level that they do now back when tuition was virtually nonexistent.

So what has happened is there are more needs as the population ages. As more needs are generated, then there is only so much money that you can get; then, you might say, why don’t you cut something else — well, the fact is we’ve cut the elderly, the blind, the disabled, their pensions — which were $850 dollars a month. We cut them to 835 a month; they’re the poorest people we have.

A mother that gets CalWORKS because she can’t work and has two little children — her stipend under state and federal money is what it was in the 1980s, so that’s low, and we’ve also cut Cal Grants particularly for for-profit colleges. We’ve got in-home supportive services, we cut out redevelopment, we’ve made major cuts, and so when you look around, where do we cut next? It just happens that education is such a huge part of the budget, and it is less protected by federal law, so when you have a shortfall, people look to the UC and the Cal State and K-12 and the community colleges, because that’s more totally within the control of state authority, whereas when you go to Medi-Cal or you go to some of these social service programs because they’re half federally funded, the federal rules as a condition of getting that half of the money requires certain services be provided, and if a state attempts to cut them, the state will lose federal funding, and therefore it doesn’t cut as much. So the only people left on the chopping block are UC, Cal State, community colleges and K-12. So that’s why things have turned out the way they have, and the answer is of course to get more revenue, and it’s also for UC to be as efficient as it can and not spend money on lower priority items if such can be found.

The Bottom Line, UC Santa Barbara: If Prop. 30 fails in November, will you insist that the trigger cuts in the ’12-’13 budget go into effect and veto any other legislative alternative and insist on a cuts-only solution to the budget deficit, or will you continue to pursue another tax increase?

Brown: I’d like to think there was an alternative in case Prop. 30 fails, but there isn’t.

The state only has so much money, and for the last 10 years, the state has borrowed money through accounting maneuvers, gimmicks, inflated rev projections and inflated expenditure reductions, and that has created for California the worst credit rating of all 50 states. We’re at the bottom. When I became governor, the deficit was $26 billion and, because a billion of the revenue was coming from selling 11 state buildings at a ridiculously low price, I canceled that, and the deficit went to $27 billion. Now, we have cut away at that billions and billions of dollars, and we are getting close to balance, which I believe will happen if Prop. 30 passes. But if Prop. 30 doesn’t pass, I can’t conjure money out of thin air. There are only so many cookies in the jar, and the gimmicks of the past are not acceptable going forward. We are in an uncertain world economy. We’re gonna keep our debt in proper relationship to our revenue. So yes, the trigger cuts will go into effect, and they’re part of the budget, and it’s automatic. So there’s nothing for the Legislature to do because the trigger cuts are already enacted subject to not going into effect subject to Prop. 30 passing.

The Daily Californian, UC Berkeley: In your ideal situation, let’s say Prop. 30 passes. What needs to happen in the future to continue a more sustainable higher education system?

Brown: I believe that coordination between community colleges, high school advanced placement (programs) and UCs has to be intensified, number one. Number two, I think online learning has to be part of the package, and it has to be looked to wherever it can be usefully and creatively introduced. Thirdly, I think the UC leadership have got to find ways of reducing expenditures that are less valuable than the core mission of the university, which is to educate students and to do fundamental research.

Now, I believe that the university leadership already claims and believes that they’ve cut administrative costs to the maximum. I would say that’s a question that should be looked at and not closed … You have got to find out what is basic and what is nice and maybe in the amenity category because the problem in higher education, as I see it, is probably twofold. State governments have had their revenues cut because of the mortgage meltdown and that whole catastrophe coming out of Wall Street and the recession.

Secondly, universities have been faced to compete with new social needs that absorb spending. But thirdly, universities are taking on more and more activities, and that costs money. And then, finally, the availability of student loans, which now approximates in accumulated number a trillion dollars. And student loans (which I think is improperly denominated student aid; it should be very clearly labeled student indebtedness without benefit of possible bankruptcy as every other creditor has) becomes a source of growing funds. Because the money is almost infinite, then the discipline on spending that money is reduced. We just know for a fact that if you could always get more money, you will look to the money in rather alternative spending practices. That is a difficulty because the student indebtedness is growing faster than mortgage indebtedness and faster than credit card indebtedness. So it is a growing source of capital that feeds into every school and every college in the country, and that then requires real vigilance in making sure those who spend all this money don’t become too comfortable on the students’ future, which they are basically extracting from them.

Even though you’re all supposed to make so much more money you could pay it back. That was never the story when I went to school. Nobody told us that. And when my mother went to school, nobody told her that.

This particular student indebtedness issue is a recent phenomenon, and it can be very difficult to control. But I believe we have got to find ways of expanding college opportunity and finding the most elegant and efficient way of making that opportunity available.

The Daily Bruin, UCLA: For various reasons rooted in the political structure of the state, higher education always seems to be on the chopping block. So, long-term, given what some may call systematic problems, do you think its possible to guarantee sufficient funding for the UC every year? And as an ex-officio regent, what should be the long-term funding model for the UC from the state?

Brown: Well, the long-term model should be we should get more money from the state, and what I’m doing in Prop. 30 is a major step in helping the university, and I may say this didn’t come very easy. Last year, there were certain taxes worth about 10 billion that were set to expire, and I tried to get the legislators to put it on the ballot to see if we couldn’t extend it another five years 10 billion sales tax, car tax and two tax exemptions that had been suspended. I couldn’t get the two votes from the Republicans in the Senate to get to the two-thirds vote needed, and I couldn’t get the two votes in the Assembly, so I had to go out and get an initiative.

My first initiative was to have a 2 percent tax, but then the federation of teachers came up with a millionaires tax with  a 5 percent on millionaires, and that was polling so much better. I knew that I had to form a coalition by creating compromise. So we came up with a third idea, which is Prop. 30. I just recounted that issue to show you how difficult it is.  It’s difficult to get taxes, that’s true. And, by the way, Prop. 39 will provide some money to the general fund, so that’ll be helpful. I will do everything I can to see you help UC and higher ed in the budget next year. When you look at these things, you have a lot of built in requirements, for example through reducing the prison population through what is called realignment, which is having less serious criminals dealt with at the local level. That realignment policy didn’t get one Republican vote, and in fact some Republicans say that blood will be running in the streets because of the felons that are not in state prison but are rather in local jails or in drug rehab programs or in some other alternative sanction. What I’m saying is it’s hard to reduce prisons too much more, although we’re still working on that; the courts are telling us to do that. But there’s no easy path, whether it’s less money in health and human services, less money for corrections, less money for all the other things in government. It’s just a problem that as you go from a state when I was governor last time with 24 million to a state with 38 million, and you have a lot of lower-income people, and you have a lot of people getting older and having more needs, medical needs, it’s more costly. And as you have more people — 38 million driving more cars, more crowded — you have more transactional costs, and that shows up in government spending needs. And yet the skepticism of government grows right alongside with the needs that in many ways only government can satisfy. So we have this dichotomy between a growing need and a ] growing skepticism about paying any tax money to alleviate the need. We’re in a cultural contradiction ] that we wrestle with, I wrestle with, every day. Even if you look at some of the ads, they point to you can’t trust elected officials. I guess the corollary would be let’s have unelected officials or maybe let’s not have officials. Well, then what? How do we have freeways or trains or buses or universities or schools? So there is a serious issue here of conflicting perceptions and desires that make it difficult to arrive at a majority consensus on strengthening public sector activity.

The Daily Californian: As public funding declines, schools are forced to rely more on research and private funding. Does this align with your vision for the state’s role in education in the future, and should schools be looking more into those other modes of funding?

Brown: The university has taken the path of more and more fundraising because of the decline in state support and also because of the increased perceived needs that the university finds for itself. It’s even become the practice that when you interview a possible dean or chancellor, the first question is, how much money can you raise? Now, that really has very little to do with intellectual depth or moral leadership or creativity — virtues that I would identify with university leadership. But there is this need for fundraising. There’s this need for making money through patents and other activities that the university can engage in. And I would say that all of that needs to be very carefully looked at, because it can alter the character of the university in ways that I don’t think would be good.

But having said all that, the money is needed. So I would like to see the state giving more money, but for the state to give more money, they have to have more money. One of the ways the state gets more money is if the economy grows. Because the of the mortgage meltdown, California lost 1.3 million jobs. Those people are collecting money through unemployment and Medi-Cal, and they aren’t producing. So if we get all those people back to work, that would put money in the state and we’d be in a better position to fund colleges
and universities. And then that goes to the whole question of macroeconomics and what is the federal government doing. And even the federal government is not alone in charge — you’ve got the effects of Europe buying exports from the United States. And there is this meme infecting leaders around the world about the need for austerity. There is another group of economists saying no, what you need is investment and stimulus, and I would identify with the latter and not the former.

The Daily Bruin: I am going to go back to the first question the Daily Bruin asked because I think we were explained the systematic problems, but I wasn’t really clear on the actual what you think the long-term funding model for the UC should be.

Brown: Long-term funding model: Now, what is the funding model. It’s state general fund money, fed grants, student borrowing and fundraising from wealthy individuals and maybe not-so-wealthy individuals and corporations — that’s the model. So how that can be altered? I think that’s also an obviously … I think getting back to Prop. 30 before worrying about the long term model … if Prop. 30 is defeated, then the notion of additional state money will be defeated with it, so I think we have to deal with if the house is on fire we have to put the fire out, and right now, the challenge by the no on 30 people is that the money coming from taxes is being wasted. That’s their theory. Its an idea meme that circulates in people’s minds and it makes it very difficult to win more support. So in order to respond to that, I’ve been doing whatever efficiencies I can … We’re trying to win public confidence by showing that we are responsible with the tax dollars, but no matter how much we do, there’s always a problem, something shows up. We have 300,000 employees for something to go wrong. If you look at what’s going on in private business with the jet planes, their activities and their bonuses, you could call a lot of that waste, but that’s not the meme; that’s not the idea that’s being circulated. Government is somehow supposed to be pure, and yet it has ordinary human beings.

University, state government, legislators — we all have to strive to be more austere with our state spending in order to win the support of the people so as to have enough tax revenue to do what needs to be done. And at the same time, there is an ideological war going on between those who are comfortable with the growing inequality and stratification of society and the privatization and the diminishment of the public sector. So that’s really the contest, and this election will deal with some of that with Prop. 30 and also I would say Prop. 39.

The Daily Bruin: You were an ex-officio member of the board of regents, and so there has been pressure on the regents to give more autonomy to the individual campuses. Do you see UC becoming more decentralized in the future?

Brown: I generally favor decentralized solutions under the notion of subsidiarity, which is a fancy word, but what it means is that organization or institution closest to the problem should have the most responsibility to deal with the problem. And under Catholic doctrine, which I was taught, the basic and primary institution is the family, and when you go beyond the family, you get to the neighborhood, the city, the university, the school, then you have the state and then the federal government. So all these different levels are involved in telling schools and universities what to do and collecting and spending money. How that would apply to the central administration in Oakland and how much should UCLA or Merced or San Diego, that’s a very fluid topic, and I would have to know what are we talking about. Are we talking about course, tenure decisions payroll, sports — I think there are a variety of issues, and I am not prepared to pick one out, but I don’t have any specifics, like should UCLA have this power or should it be in the hands of the (UC) President’s office.

The Daily Bruin: Should campuses be able to set their own tuition levels you think?

Brown: Well, that certainly there is a desire at Berkeley and UCLA to pull away from what they consider their lesser brethren out there. You know, I want to think about that.

I guess there is a notion that UCLA and UC Berkeley are these special institutions and therefore they can charge more. That isn’t — hasn’t been the historic model, and, as a matter of fact, if you look over the last 50 years, the market as an idea has crept more and more into the public sector by way of notices? If you teach this course, you will make more money than if you teach that course. Obviously if you’re a computer scientist, you are worth more than a Greek professor — or are you? So that’s really the question, and it gets into the matter of what our society is all about, and I think the market intrusion needs to be limited because we are all in it together; we’re all contributing, and, while incentives play an important role, I find it kind of ridiculous that people say, oh, if you give a teacher 2,500 bucks more a year, they’re going to teach better. I find that hard to believe. I assume a teacher or a professor does what he or she does because they like it. I mean, they want to get a nice salary, but if they get X amount or Y amount, as long as they’re in the job, I think they can be professionally dedicated to what they’re doing. The market would say that the primary motivation is money — therefore, the more you get, the more you do; the less you get, the less you do. That’s a concept that needs to be challenged, because I don’t think it’s true.

The Bottom Line, UC Santa Barbara: What have you worked on so far to reprioritize education spending in your budget?

Brown: Realignment. I have reduced the prison population by 40,000 prisoners. Secondly, we have put about 125 million plus into both UC and Cal State to bide down proposed tuitions increased this year. By actually financing and circulating Prop. 30, Prop. 30 just didn’t spring to life ex nihilo, from nothing; it had to be drafted, which was done in my office. Money had to be raised, and then we had to deal with competing measures like the so-called millionaires’ tax. And also we’re working on making it easier and seamless for a community college student to go to UC and Cal State; I think that’s an important part of prioritizing. Also, I’ve been looking into the fact of why so many students flunk remedial English and math. I think that’s something we need to figure out in senior year of high school and more and more providing state funding to high schools even though the student is taking a course at a local community college, CSU or UC.

The world needs more of these institutional structures where boundaries are more permeable. So, the notion of a college as a quadrangle with ivy and trees and lawns and plazas, that’s true — that’s historically what the Ivy League looks like, that’s what Stanford looks like — but now, with the Internet, with the digital revolution where ideas can be encoded and transmitted across all sorts of former boundaries, there has to be a reconceptualization of high school, community college, Cal State University and the UC. There’s room there for cross-pollination and interchange that I would hope people would think about

The New University: Based on your recent signing of AB 970, which now allows students and families time to prepare for tuition increases and gives them a better idea of how their money is being spent, do you have any other efforts to ensure affordability and transparency in higher education such as this?

Brown: No, but I’m hoping you suggest, maybe you could send me some.

The Highlander, UC Riverside: You’ve made it very clear for your term that your goal was to balance the budget. Despite this, you’ve made some priorities like high-speed rail, certain kinds of investments. Do you have a particular vision for California? Where is your focus, especially once the budget is balanced? Do you have a kind of goal in mind, a certain endgame?

Brown: Endgame, that’s a little ominous. I don’t think we have an endgame except to stay
healthy and alert and learning.

Vision is a word thrown around. In fact, the first George Bush referred to it as “that vision thing” because people didn’t think he had much of a vision, and he was frustrated by people asking what’s your vision. Pooh-poohed “that vision thing,” but I do have a sense for California, sense since I’ve been around for a while: My grandfather came to California in 1852, took a stagecoach to Sacramento, so I have a sort of tradition. My mother went to UC; my father was the governor, of course. and I see California as a very unique place. Its uniqueness is not appreciated in some quarters in Texas, in New Jersey where they create an illusory utopia of low taxes, low regulation, plentiful low-wage jobs — which there are low-wage jobs in California, but California is still the heart of creativity in the world. The new businesses coming out of the internet, the microprocessor, co-invented by a man by the name of noise. California is a place that, whether it in agriculture, in movies, television or internet or biomedical research or computer science, it’s an amazing place my vision or my hope and my commitment is to preserve and enhance this special place with its unique attributes. Another part of California is its environment, and that’s why California alone among the states has a goal of 33 percent renewable energy by 2020. We have a goal of a high-speed rail, which is a more efficient way to move people from one place to another, and, by the way, high-speed rail will be spent over a 20-year period; funding will go on over a 30- to 40-year period, and when you look back in time, what are the things that last? If you look at a bridge or dam or transcontinental railroad, these were big commitments, but they were often made in depressions, transcontinental railroad done by Lincoln in the Civil War, Golden Gate Bridge bridge during the depression.

So, the fact that we’re under fiscal stress doesn’t mean that we do news things. A one-ton vehicle was built in Pasadena that landed on Mars. That cost $3 billion. Why don’t we spend that money on reducing tuition, something else — even hunger — but you’ve got to do many different things.

We’ve got to make sure we have a reliable water supply, transportation, infrastructure with modern intelligence, without advanced state. I would just say that I see California as both a trendsetter but also as a state that deals and grapples with the big issues, and the big issues are inequality, climate change and promoting and handling the innovation that both adds to our quality of life but also undermines our sense of our traditional identity and that puts us in kind of a hothouse of experimentation, and I think California has to both look to its past and also pave the way for its future.

By the way, California is called in the “Great Exception,” and in that book, he talked about how the gold rush in a matter of a couple years brought hundreds of thousands of people from all over the world, everywhere, China, Russia, Italy, Germany, everywhere, people just came out, got their pick and shovel or their pan and they started extracting all this gold. One hundred million dollars over a number of years. You might ask, who owned the land, who owned the gold — well, whoever got there. These mining towns with no government, and it somehow worked, supercharged California in an extraordinary way, to the detriment of the native people and the environment to some extent. And that stimulus and that surge of human activity has been replicated many times since. I would say the internet, computer revolution and the sequencing of the human genome and the Pasadena JPL. There is a continuing gold rush of human imagination and collaboration — also the way I see California.

The Highlander: What kind of impact will the outcome of the presidential race have on California?

Brown: Well, I would say that Romney buys into the idea that more privatization is the way to go, and it’s more of a hyper individualist perspective that is at odds with our understanding of what happened when these big banks that weren’t regulated and were in fact too big, so they all had to be bailed out. So I would say that its pretty clear to me that President Obama represents a commitment to our common path through public service, through helping the less fortunate, through dealing with climate change and through I think a more enlightened foreign policy. None of these presidential choices are black and white, becuase they’re all within the American consensus, but I do think for California the way I see the world, President Obama is the right choice.

Senior staff writer Adelyn Baxter and staff writer Jacob Brown contributed to this report.
Sarah Burns in the university news editor. Contact her a [email protected].

OCTOBER 26, 2012

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