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President Mark Yudof discusses UC’s finances, Prop. 30 and more

UC President Mark G. Yudof held a web chat with UC faculty and staff Nov. 2, 2012, to discuss UC’s financial future, the impact of the November tax initiative Proposition 30 and other issues. The event was recorded and can be viewed online. Following is a selection of questions and President Yudof’s responses from the chat. Some responses have been edited for space or clarity.  

Q: Adequate funding for UC is primary on people’s minds. We‘ve seen a lot of advertisements and news stories about Prop. 30, one of the initiatives on the November ballot, which concerns funding for public education. Can you please help the UC community understand what this proposition would do, how it would impact the university and why the regents endorsed it?

A: I think Prop. 30 is important and I want to be very clear: The Board of Regents formally adopted a positive affirmative position on Prop. 30, but we are not free to use university materials and money to support it.

In my individual capacity I support it, but my message to the university community is, you have to make up your own mind about the pros and cons of Prop. 30. The cons are that it is a sales tax increase, a small one; it’s an increase in income taxes, mainly for high-income individuals. And there are people who think that is not necessary and that the current money is not appropriately spent.

On the other side, if Prop. 30 fails, we will lose an additional $250 million. They are called trigger cuts. It’s already in the law; it’s triggered by the failure of the proposition. We didn’t raise tuition this year, and the state said, they will pay what the students would have paid — $125 million — if Prop. 30 passes. So if Prop. 30 fails, we are another $375 million in the hole, in addition to over $800 million over the last four years. From a financial standpoint, it’s almost inevitable, that if it fails, [we will see] certainly a mid-year tuition increase, probably an increase in the fall, reductions in personnel and other sorts of economies would need to take place. And that‘s the stark choice the voters need to make.

Q: If Prop. 30 fails, are there things you would definitely not consider? Examples given are closing a campus or going more toward privatization.

A. I can’t be too definitive about that. I have no plans to close or sell any of our campuses. I just want to state that on the record. We’re very unlikely to go down this furlough path. We did save a bunch of money early on, but administratively it was a nightmare. And people were justifiably concerned.

I’m not going to give up the character of the University of California. The character of the University of California is that we’re 40 percent low-income students. We may have to look carefully at financial aid and other things, but we cannot give that up or we are giving away part of what the essence of the university is. And I’m not going to give away the quality. Other than that, we may have to make due with fewer resources.

Q. Will there be any cost-of-living or merits for non-represented employees in 2012-13? What are short-term and long-term plans for salary increases for non-represented staff and how will the passage or failure of Prop. 30 affect staff raises this year?

A. It’s a complicated question. I’m very committed to staff raises. I’m committed to faculty raises, but to be honest with you, I think the non-represented staff have gotten the short end of the stick over the last five years. If you really pushed me to the wall and said what’s your first priority, I really think it’s staff. The faculty have gotten at least that merit money the whole time through, but last year we were able to add some to it. But the life of this university is dependent on both groups. Without world-class professors we’re not going anywhere, and without world-class staff we can’t make the place run right and serve our students.

A lot is dependent on Prop. 30. If Prop. 30 fails, it’s very unlikely that there will be those incremental compensation adjustments in 2012-13. We’re just going to be very, very pressed to get through. We’ll then try to construct a budget for 2013-14. I’m not willing to rule out an increase for staff in 13-14; I will work very hard to do that. But that would be dependent on what the state does for that year’s budget, what the tuition is and what other savings we can amass. But I’m very committed to staff salaries. The staff has stayed with us through some really hard financial times. I’m really appreciative of that.

Q. Can you define campus climate, the reason for the campus climate survey?

A. I must confess that my attention was focused after the Compton barbeque and the party at San Diego, some other racist events at San Diego, some graffiti at Davis, some scrolling on a Latina’s door at UCLA, some terrible remarks about Asian American students at UCLA.

I really feel we need to be organized about this. I think our hearts are in the right place. So the purpose of the climate survey was to say, OK what is it like for you and your self-identified group on campus? You’re an African American at Santa Cruz. What is your perception? Do you feel welcome on campus? Is the campus supporting you? Do you think in some fashion you’re being discriminated against by one group or another? I wanted hard facts rather than just people’s anecdotal impression, so that’s the reason for it.

This will not be kept under a rug. We will widely distribute this to the campuses, to CUCSA, to the academic council, to the divisional senate, to the Student Affairs Divisions.

Q. What is the strategic plan for sharing the results of the climate survey and the resulting imperative implementation plan at UCOP and campus locations?

A. It depends on what the findings are. We have put more money into San Diego and more resource centers for various groups. I had a very interesting set of reports about Muslim students, another one about Jewish students. I don’t endorse either one entirely but there were some interesting ideas that we’re adjusting to. I think we need to think seriously. Sometimes people react in a way that‘s too emotional and not constructive. I want to make the place more comfortable for gay students. We need a plan that has some promise to work. And we have some help on the academic side, people who study these things. So it’s too early for the plan.

One last point: Sometimes campus climate, to be honest, is adversely affected by people exercising their free speech, and sometimes it’s even hate speech. It’s our constitution, it’s the first amendment. I am not going to undermine free speech on campus, even if sometimes speakers are offensive to one group or another. We cannot do that legally and it’s not the American way, it’s not the UC way.

Q. With the budget crisis, reduced pension benefits, rising health care and parking costs, and lack of cost-of-living raises, what is being done to ensure the UC system will be able to keep its best employees here at UC and also be able to attract top candidates for future staff openings?

A. That’s a very difficult question. We had a 3 percent merit increase last year. I’m really committed to doing it three, four, five years in a row. I just have to have the finances to do it. I’m committed to the compensation issues. I’m committed to having just about the best health benefits in the universe and doing what we can to maintain them. The people who are here who are under the current retirement system have a retirement system that is really superior to what you see in the private sector or at the universities around the country. The new tier is not as good a flavor and more like the others.

I want the campus climate to be good. I want to facilitate mobility in terms of jobs. I want to treat employees with respect. There are a whole series of things you can do, but there are no guarantees. It may be at the end of the day, that we will be leaner, we will have fewer employees to keep the salaries more competitive. Let’s remember we’re not just isolated here. There are problems with compensation levels and employment and so forth across the country and across California, so not all pastures are greener.

Q: Even with the new tier of retirement benefits, are our pensions vulnerable given regular attacks on government pension plans?

A: I think we’re OK. First, the way I read the case law, we’re not supposed to cut back on the benefits employees have earned as a legal matter, even though we can charge them more. I think most of the attacks on the pension plans have been designed to establish new tiers and so forth, not to roll back prior benefits. And that’s certainly my position and the position of the Board of Regents. So I think we’re OK. We need to have those employee contributions. We need to have larger employer contributions. We need to be careful. It’s important.

Q: Why is the University of California increasing out-of-state enrollments? Aren’t we taking spots from California students? It seems like that makes it harder to get state support.

A: I agree with the conclusion, but not the reasoning along the way. The reason you do it is because the state of California doesn’t provide us enough money to support the California students we have. If they’ll pay for them all, I’m willing to keep non-resident enrollment down. So the reason is quite clear: We lose money on every California student we enroll basically, at least in terms of the state appropriation.

What I would say is we want to maintain the current level of California resident enrollment. We want the state to step up to the plate with additional funds, and we would take an additional 10,000 or 20,000 students on the various campuses. I’m happy to do that. The non-residents pay over $30,000 each. They pay their way. Plus some of their money gets plowed back into the California residents. So you could argue that a non-resident actually makes it possible to take an additional or part of an additional California resident.

Q: How can the University of California work better with CSU and community colleges to share resources, buying power and save both students and UC money?

A: Chancellor Reed [of CSU] and I work very collaboratively and closely together. There are things like Connexxus where we order our travel together from the same travel site. I have told our officers here in procurement that we should look to see whether we could buy machinery, pencils, seats, chairs and other things we need jointly to save some money, and we’re exploring that. I expect the cooperation to continue with Chancellor White [of UC Riverside, who will become chancellor of CSU at the end of this year].

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