San Jose Mercury News, April 18, 2010, Sunday

Copyright 2010 San Jose Mercury News
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San Jose Mercury News (California)

April 18, 2010, Sunday
Correction Appended

California's university system: What went wrong?

By Lisa M. Krieger
Fifty years ago this month, California promised a low-cost, high-quality university education for every qualified high school graduate in the state. But that promise inflated by growing populations and academic aspirations expanded beyond our willingness to pay for it.

What went wrong? How did the university system that was long the envy of the world suddenly become the focus of angry street protests, overcrowded classrooms, soaring tuition and a monumental debate over whether the state can ever make good again on its groundbreaking mission?

While the recession turned a slow-brewing problem into an instant crisis, a Mercury News analysis of California's higher-education mess reveals that many factors drove the inevitable and ugly collision between the university system's ambitious, unchecked and uncoordinated growth and the state's declining ability and desire to pay for it. Among the most critical:

. Plummeting state support: Since 1990, state spending per student has dropped by half in infla-tion-adjusted dollars. While the state paid about 90 percent of a student's education 40 years ago, it now pays 69 percent for CSU students and 62 percent for UC.

. No guaranteed funding: Unlike K-12 education, universities are not guaranteed a steady stream of fund-ing. In the last 40 years, higher education's piece of the state's spending pie has been sliced in half even while enrollment has jumped 21/2 times.

. Continued expansion: In the past eight years, despite declining state support, UC added a new campus, seven new schools and at least 45 new programs. CSU added a campus, many new science centers, and even a PhD program adding a research emphasis that was not part of its original mission.

. Explosive faculty and administrative expenses: At UC, senior management grew 118 percent to more than 7,000 positions between 1996 and 2006. Faculty grew by 34 percent. And relying on a once-bullish market, UC stopped contributing to its retiree health and pension systems 20 years ago, but now faces a $1.6 billion deficit in 10 years unless it starts making substantial payments.

. Little coordination: While university systems in several other states must seek approval for spending and expansion plans, there is no oversight body in California with the formal authority to play such a role. UC and CSU are often self-advocates with competing interests instead of partners who share and coordinate the state's higher education needs, according to the state's Legislative Analyst's Office.

Birth of the Master Plan

In April 1960, when California first made its higher-education promise, educators faced a clear challenge: the children of World War II GIs craved college degrees.

There was no tax-limiting Prop. 13 and the state was flush with cash from rising house prices. Demands on the state's pension, prison, welfare and health care systems were modest. Well-funded high schools were predominantly graduating white, middle class kids prepared for college.

And so the state produced The Master Plan for Higher Education, which promised low fees and easy access to a well-defined network of campuses.

"There were new campuses that had to be built, faculty members that had to be hired, and so forth," the late UC President and Master Plan architect Clark Kerr recalled in a 1999 interview. "It was a commitment that called for bil-lions and billions of dollars of investment," he said. "It was the first time in the history of any state in the United States, or any nation in the world, where such a commitment was made."

Fast forward to the present, and a greatly changed landscape.

The student population has nearly tripled since the creation of the Master Plan and students are far less col-lege-ready, with one-third of UC students and one-half of CSU students needing remedial classes. Yet the share of the state budget going to the universities has fallen from 11 percent in 1990 to 5.7 percent this year.

"In boom times, the state gave us more but it came with strings take more students, invest in centers of research, or build a new campus," said Nathan Brostrom, vice chancellor of administration for UC. "Imagine you have a house. Instead of taking that windfall and building up the foundation, it was used to build a nice new addition.

"Then funding was largely cut off."

Now, caught in the squeeze, students and their families are stuck paying the steep bill. UC is predicted to hike fees 15 percent a year for the next two years, then 7 percent annually in subsequent years, on top of this year's 30 percent rise. CSU may feel forced to do the same.
But more student money is not translating into a higher level of service; instead, it's not even enough to close the funding gap. In rushed downsizing, classes are cut, faculty are reduced and libraries are closed.

Compared to their parents, students are paying more and getting less.

Competition for courses and dollars

Lauren Hall, a freshman at UC-Santa Cruz, loves the campus and her professors. But she's frustrated because six important classes for her psychology major are full and closed to her. She was also denied entry to a half dozen courses in literature and creative writing, her other passions. There aren't enough teaching assistants. Yet her tuition and campus fees are seven times higher than when her father attended UC Santa Cruz 40 years ago. Next year, the bill will jump another 20 percent, surpassing $11,000.

"It's harder to make a relationship with a professor," said Lauren. "And I settled with classes that fulfill require-ments, but I have no interest in." Case in point: The psych major is enrolled in The Natural History of Dinosaurs.

Over the years, universities too have seen fierce competition for something they desperately need: state dollars. The anti-tax rebellion of Prop. 13 cut local government revenues, so the state gave schools, cities and counties funds that used to go to higher education.

In recent years, an array of ballot measures, federal restrictions, lawsuits and court rulings have tied up the state's General Fund further, greatly limiting the Legislature's flexibility to send money to universities. Instead millions have gone to tobacco education, transportation, mental health and other programs. Prop 98 earmarked about 40 percent of the General Fund to K-12 education.

"Big parts of the budget are already locked up. And these other priorities are sucking up more money these days," said Steve Boilard of the Legislative Analyst's Office. "In bad times, higher education is one of the few remaining plac-es to go after to achieve savings."

Even federal policy inadvertently provides disincentives for California to support higher education. State spending on Medicaid not universities comes with federal matching funds.
Growth continued

Despite dire economic challenges, the 10 UC and 23 CSU campuses didn't, or couldn't, contract. Much of their budget is tied up in labor costs, protected by union contracts. The universities also have contractual commitments to fund generous health and retirement plans. Unlike other government agencies around the state, UC and CSU have not sought to modify those commitments.

And the autonomous universities continued to expand and develop unchecked. The cost of some of this construc-tion is supported by state bonds, but other projects such as parking garages, dorms and student unions are paid by students.

Some construction seismic updating and disability compliance is essential. Other growth is necessary because of new fields of scientific study and their high-tech improvements. "How many computers did we have in the '60s? None,'' said Kevin Woolfork of the California Postsecondary Education Commission, the state's planning and coordi-nating body. "Do you want a nurse who was trained in the 1960s? Do you want your roads engineered to the standards of the 1960s?"

But other projects were urged by private donors, or politicians with pet passions. Research campuses, in particular, require extraordinarily expensive equipment, labs, regulations and support for graduate students.

In 1988, when UC faced enrollment pressures but stiff resistance to growth from the communities like Santa Cruz, the state, university and Central Valley leaders together pushed for the development of UC Merced. UC invested $425 million into the rural campus that was supposed to spur regional economic growth "UC Owes The Valley," asserted a Fresno Bee editorial. Today, the geographically isolated campus remains only half full.

And yet, last month, the UC Board of Regents approved a $1.129 billion capital improvement campaign for the campus that now seeks a new medical school.

A different set of forces combined to create CSU Monterey Bay. The university was offered, free, $65 million in land and buildings from the U.S. Army what had been Fort Ord. Congressman Leon Panetta and regional community leaders desperately sought revenue to replace the closed military facility. But while it cost $141 million to convert from military use and $61 million a year to operate, after 16 years the campus holds only one third of its capacity.
Meanwhile costly new programs and professional schools that boost prestige are still being planned. CSU now of-fers a doctoral degree in education at seven campuses, including both CSU East Bay and San Francisco only 27 miles apart. It also wants to offer nursing doctorates. This means that CSU needs money to do what UC is already doing.

"No one has taken a statewide view of these problems and made system-level efficiency and integration together with more funding a political priority," said William Zumeta, professor of educational leadership at University of Washington in Seattle. "Nobody is home at the state level to say 'No.'''

Promise for future generations?

Research, while important, is expensive, as well and inadequately supported by grants from the state and federal government. So research needs subsidies. For instance, the "Governor Gray Davis Institutes for Science and Innovation," conceived by Gov. Davis in the boom year of 2000, got $400 million over four years for building construction at UC-Santa Cruz, UCSF and other campuses. Within a few years, much of the money, and Davis, were gone. Day-to-day operational funding is now a major concern.

Spending has also climbed in non-academic programs, such as athletic teams, dorms, fitness centers, museums and dining facilities. Due to budget cuts, CSU campuses in San Jose and Hayward have become regional, commuter schools, leaving at least one dorm at SJSU empty. Yet the university's Student Union is undergoing a $91 million makeover; approved by former students, it will be paid by fees on future students. At CSU East Bay, a future $32 million Recreation and Wellness Center will offer an indoor jogging track, fitness center, body-mass testing and 1,500 square feet for massage therapy and other health-related programs also supported through higher student fees.

UC-Berkeley's head football coach Jeff Tedford gets paid $1.5 million a year, the highest salary in the entire UC system. And an expensive new stadium is under construction. Yet the money-losing intercollegiate Cal Athletics important to any school's national image is projected to need $12.4 million in campus subsidies this year. Worried, UC-Berkeley has quickly assembled a group of experts, called The Chancellor's Advisory Council on Intercollegiate Athletics Financial Sustainability, to find some way to staunch the flow.

"The goal of any university is to be as good as they can, and provide the most services they can,'' said economist Ron Ehrenberg, director of the Cornell Higher Education Research Institute. "Sometimes it's easy to lose sight of what the resources will be for support.''

In the 1960s, when Lauren Hall's father, Paul, attended UC Santa Cruz, student fees generated $200 million a year in revenue for California's public universities. Now, they account for $4.5 billion.

Paul Hall fondly reminisces about an intimate intellectual village of small seminars and dinners with professors who laid an academic foundation that led to his career as a prominent San Francisco attorney. Lauren loves UCSC as much as her father, but it's a changed campus. Together, they wonder what promises California will offer the next gen-eration when it comes to a college education.

"As for the future, I'm worried sick,'' said Paul Hall. "Imagine having created unquestionably the greatest public university in the whole world and then killing it because we don't have the collective civic consciousness to pay for it.''
Contact Lisa M. Krieger at 408-920-5565

CORRECTION-DATE: April 21, 2010 Wednesday

CORRECTION:
A front-page story Sunday about California's higher education crisis misstated the cost of converting Cal State Monterey Bay. The story said the cost was $140 million. Although the estimated cost of conversion was $140 million, the university spent only $65 million, which it received from the federal government.

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