A report that investigates the University of California’s finances from 2004 to 2011 indicated areas of spending that could be cut to avoid dramatic tuition increases in the face of state funding cuts.
California Common Sense (CACS) released the report, titled “Priorities Re-examined: A Study of the UC Finances 2004–11,” last month. The non-partisan, non-profit organization’s website states that it uses data-driven policy analysis to educate citizens about how government functions.
The report aims to examine often overlooked university finances to assess if the UC administration is making every possible effort to exhaust other sources of income before raising tuition. It highlights two spending trends — the rapid increase in management employees and support staff, and unabated construction.
“Based on our research, these two categories are both large enough to allow substantial monetary savings without drastic changes, and also the least justified in terms of present levels of spending,” author of the report and director of research at CACS, Mike Polyakov said.
The report states that disproportionate expansion in non-academic management employees and accompanying support staff is often cited as a factor in rising tuition costs.
“We found that management and management support staff has grown much faster than any other category of UC employees over the past two decades, and that together these two groups draw 20 percent of all salaries,” Polyakov said.
UC Berkeley professor emeritus Charles Schwartz has closely examined and graphed the rise in management and senior professional employees at the UC in the past 20 years.
“Over the last 20 years, you see the total number of employees increases — I don’t know, 30 percent — and then the management category increases 300 percent and you say, ‘Wow, something funny is going on here,’” Schwartz said.
Schwartz’s graphs indicate that while the total number of UC employees has grown 47 percent overall in the past 20 years, the management and senior professionals group has grown by 220 percent.
Schwartz explained that UC officials argue that this increase occurs mostly at UC campuses with medical schools. According to the report, these campuses account for half of the growth in non-academic employment and are profitable enough to be generally self-funded. Schwartz said the UC also contends that evolving academics requiring more computer specialists and other professional staff accounts for these large increases.
With this in mind, Schwartz excluded campuses with medical centers and management employees specified as computer specialists from his data analysis. He still found the increases to be excessive. In fact, the two campuses with the highest increases in management staff do not house medical schools — UC Berkeley and UC Santa Cruz, which had increases of 336 percent and 324 percent, according to Schwartz.
“[Management and professional staff] growth doesn’t seem to be justified in any real way that we know of,” Polyakov said. “The university has commented on this and they basically say that they need to adjust the workforce to adapt to conditions, but this doesn’t seem to be a sufficient explanation and no other explanation for this trend has been forthcoming.”
Polyakov’s report states that management and support staff outnumbers academic staff 2-1.
The report also cites construction as a source of spending that could be reduced or, in some cases, stopped altogether to avoid high tuition increases.
“Given that much of [the construction] is not mandatory maintenance or repair, but rather new construction, it seems important to ask whether it should not be temporarily curtailed,” Polyakov said.
UC officials maintain that construction projects are planned years in advance and funded in advance general obligation or revenue lease bonds that cannot legally be diverted to alternative expenses.
“All of these projects take, at a minimum, five to seven years of planning,” said Diane Klein, media specialist at the UC Office of the President (UCOP). “There hasn’t been a general obligation bond since 2005, so those projects that have taken place are a result of that.”
Klein also said that in current times, the UC is able to capitalize on historically low interest rates when making capital investments and planning construction.
“The importance of maintaining our physical plant can’t be ignored,” Klein said.
The report states that according to UC documents, most new construction projects are not urgent.
“Are growth needs so pressing as to justify steep tuition increases? … Or can the university make do with present facilities and leaner upgrades in these times of unprecedented financial hardship and uncertainty?” the report asked.
As these projects’ funding comes from advance general obligation or revenue lease bonds and cannot be redirected to operational expenses, the report suggests an alternative method.
“If they requested less money for construction, there is no evident reason they could not correspondingly increase the sum requested for operations,” the report states. “That money could then be used either to cement the quality of the system or reduce the tuition burden on students.”