If there’s one place to watch the really hard choices about what government can afford to spend on higher education and what a college degree should cost, it’s the meat grinder that now faces the University of California in Sacramento.

The stakes are high. The university, led by UC President Janet Napolitano, has insisted it will increase tuition for as long as the next five years if lawmakers don’t pony up enough taxpayer dollars. Gov. Jerry Brown and legislative leaders, on the other hand, have demanded that the university system cut costs and keep tuition levels constant if it wants any additional dollars. You couldn’t ask for a more tense showdown than this one.

(There was a tiny easing of that tension on Wednesday, when Napolitano extended an olive branch by canceling a tuition hike for summer session students.)

In the middle of the fracas, though, has appeared something fascinating: a push for transparency.

It began when Assembly Speaker Toni Atkins (D-San Diego) said she’d insist on a “zero-based budget” review of UC spending this year. Translation: Justify every dollar you spend, UC leaders.

That process kicked off on Wednesday when an Assembly budget subcommittee summoned UC officials and the governor’s team to start answering some tough questions.

“This hearing marks the beginning of an overdue journey,” Atkins said.

She has called for a $150 million boost in UC funding, and GOP legislators support that — along with some new efforts at accountability.

“California families are counting on us to come up with solutions,” said Assembly GOP Leader Kristin Olsen (R-Modesto).

The hearing clearly wasn’t going to provide all the answers needed. But here are the big questions the University of California is being asked, and some of them are doozies.

1. Why Has UC Spending Gone Up So Much?

Legislative staff has been digging through the university system’s spending documents for weeks, and still doesn’t have a totally clear picture of the reason the total UC budget is now $26.9 billion. That’s a 40 percent increase from the last pre-recession year of 2007-08 until 2014-15.

After all, consider some other government services at that same seven-year mark: court funding has been cut by 3 percent; the state’s social services have been cut by 22 percent; even the California State University system’s increased spending was smaller, at 24 percent.

Costs clearly vary by which of the 10 UC campuses is being examined. UCLA, for example, has a budget about 10 times the size of UC Santa Cruz. Even so, legislative budget experts have highlighted particularly big systemwide expenses, from a 99 percent increase in spending on health sciences instruction (medical and other specialty schools) to a 68 percent increase in spending on the five UC-run hospitals.

One huge cost these days: paying for UC employee pensions. The university, with the blessing of state officials, stopped putting money into its pension system for almost 20 years. Now, those pension obligations are costing about $1.3 billion a year.

But there’s a lot more to sort out. Of the $26.9 billion budget for the university system, only $6.9 billion has been identified as being spent on “core” operations, like teaching. Getting details on that other $20 billion in costs will no doubt be high on the to-do list at the state Capitol.

2. Are out-of-state students crowding out California kids?

This is perhaps one of the most intense public debates out there, and it’s rooted in money. During the state’s recession years, when lawmakers cut general taxpayer support for the UC system, the schools boosted their non-Californian population and the amount it pays in tuition.

In the seven years examined by legislative researchers, UC’s in-state student body grew by 4 percent; its out-of-state student body grew by … take a breath here …  a whopping 253 percent. Each one of those non-resident students now pays $22,878 more than an in-state student.

University leaders have insisted that it hasn’t meant fewer slots for Californians, but legislators have sounded skeptical in early Sacramento hearings on UC’s funding.

3. What should be considered a “competitive salary” for a UC employee?

In a six-year timespan ending in 2013, the University of California doubled the number of employees who earn $200,000 or more. Now, before you go grab a pitchfork and storm Sather Gate, it’s important to note that some of these positions aren’t paid out of state taxpayer funds, and UC officials have told the Legislature that much of the growth in this high-paid tier of workers is in the UC health and hospital faculty.

But the publicly available data isn’t clear about who’s paid from which pots of money. And even then, legislators are asking tough questions about how UC officials consider what a fair salary should be.

For example: Should UC base its salary offers on what both public and private universities pay? And in the case of some managers, UC bases salary on positions with both education and non-education employers — including Fortune 500 companies.

As the legislative staff report puts it:

Competing with private universities and large corporations, while maintaining a public mission to sustain access to higher education for low-income students and remaining affordable to all students, is a significant challenge.

4. Are students paying for teaching … or research?

The University of California’s campuses pride themselves on a faculty committed to education, research and public service. But as cost pressures have risen and fewer classes have sometimes been offered, a debate has arisen about whether the state can afford for UC faculty to spend as much time on research.

Some say it’s a unfair cost being borne on the backs of undergraduates and their families.  And while UC officials have told legislators that research cost about $4 billion in 2013-14 from all funding sources, the Assembly budget subcommittee’s staff report says tracking that spending is not easy … and that UC officials are still compiling information about who’s actually teaching undergraduate classes.

5. Why shouldn’t state lawmakers impose more rules on UC’s use of taxpayer dollars?

This final question is one that the Assembly’s budget staffers say is as fairly posed to Brown’s administration and the Legislature as it is to anyone.

It wouldn’t be unusual, in a historical sense, for lawmakers to earmark more of the money they send to the UC system. But when the recession hit, and UC’s share of the state budget shrank, the number of specific spending directives also shrank.

The legislative budget report says that the Brown administration has resisted efforts in recent years to lay out more marching orders for how the university spends the money from the state’s general fund. But as the tension mounts in this “more money or more tuition hikes” showdown, it seems reasonable to ask whether more money should also come with more oversight — even for a system of higher education that remains one of the most independent in the United States.

  • Sunny O’brien

    Not only are the UC’s crowding out California students, it’s happening at the CSU’s. My daughter has a fine GPA at 3.5 but that is not enough for any California schools which are impacted beyond measure. At one UC there were 30,000 Freshman applicants for 8,000 spots. Something isn’t right when a state can’t educate its own first.

  • blenk007

    This article seems to assume that the UCs should be accountable to the state because they are funded largely in part by the state. The reality is that only 13% of the incoming revenue for Berkeley last year came from the state, a historical low. In the face of massive divestment, the UC system has had to get creative to find revenue that used to come from the state.

Author

John Myers

John Myers is Senior Editor of KQED's new California Politics and Government Desk.  A veteran of almost two decades of political coverage, he was KQED's longest serving  statehouse bureau chief and recently was political editor for Sacramento's ABC affiliate, News10 (KXTV). John was moderator of the only 2014 gubernatorial debate, and  was named by The Washington Post to two "Best Of" lists: the 2015 list of top state politics reporters and 2014's list of America's most influential statehouse reporters.

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