UC’s massive student-fee hikes go in part to finance construction

Students of the University of California, already reeling from annual fee hikes, have been hit by a new, 32 percent increase that a leading critic says is partly intended to provide UC with funds to finance long-planned construction – a contention the university denies.

Robert Meister, a professor at UC Santa Cruz who has scrutinized UC’s finances for years, said the fees can be tapped as a revenue stream for bonds to finance capital projects. He said the move follows decisions made by the university five years ago to secure revenue from future tuition and fee hikes.

Unreleased documents that UC provided to the bond trustee for a bond rating as early as 2004 could prove intention to increase fees as a means to balance the budget all along, Meister contends. He said he seeks to gain access to these documents, “which could prove that reductions were already anticipated, although not quite this soon.”   

UC rejects Meister’s allegations.

UC Chief Financial Officer Peter Taylor and Vice President Patrick Lenz, who heads the UC system’s budget office , said it was “misleading to say that educational fee increases are being implemented to allow us to borrow more money for capital projects.  Pledging the university’s general revenue in no way necessitates student fee increases, but rather is a way of ensuring that the university can keep financing costs down.  It has no relationship to student fee increases.”

But Meister and his supporters are not convinced.

Legally, UC is not required to spend student tuition dollars to educate students and more often than not they don’t, Meister says in a letter to students titled, “They Pledged Your Tuition.”  

In fact, approximately $1.35 billion has gone towards building capital projects after a financial emergency was declared earlier this year.  Meister, joined by a number of other UC faculty members and employees, believes the problem we have now is not about money but about priorities, which put “construction… ahead of instruction.”  

The mid-year fee hike approved last week caused demonstrations throughout the 10-campus UC system and led to arrests at some campuses including UCLA, UCD, and UCB. The Board of Regents’ action has angered students as well as faculty and comes at the same that the school faces cuts in classes.  

The mid-year fee increase applies to the remainder of the 2009-10 academic year, costing undergraduates around $585 to $633 and graduate students between $579 and $681.  Next school year, 2010-11, the additional fees range from $1,332 to $1,566 for undergraduate and grad students, a 32 percent increase.  

The tuition increases and budget cuts are the latest example of the pressures on California education.

Over the last 18 years, schools have been pressed by declining funds to raise fees.

From 1990 through 2008, state funding for UC spending dropped nearly 40 percent, which forced a commensurate increase in student fees in those same years from $2,540 to $5,040, according to UC’s data.  And with the state’s projected $7 billion to $8 billion budget deficit for 2010-11, things aren’t getting any better.  UC and the California State University received $2.6 billion and $2.3 billion, respectively, from the state General Fund for 2009-10.  

CSU, which relies heavily on state funds, has been hit harder by the approximately 20 percent reduction in funding over the last two years than UC, which has a much larger overall budget and gets much of its funding from other sources.  

CSU schools have been put into a tight position.  For example, San Jose State University has had to close its campus to thousands of qualified applicants because of its inability to handle more students.  This is part of a 7 percent cut in enrollment being made by CSU system wide, resulting in 40,000 less seats in 2010-11.  

Community colleges are one area that has been somewhat saved from cuts, thanks to voter-approved Proposition 98, which sets a minimum funding requirement for K-14 education.  

Community college students did see a $6-per-unit increase this year, from $20 to $26.  But community colleges are still a way for people to complete their undergrad work, then and get a UC degree by transferring in as junior, thus skirting nearly half the costs.  UC kept this in mind and, despite cutting enrollment, has yet to limit junior-year transfers.  

In a Nov. 11 opinion poll by the nonprofit Public Policy Institute of California,  65 percent of California’s residents said they valued a college degree and 68 per cent of those polled were resistant to the idea of raising student fees. Some 56 percent were opposed the idea of raising taxes to cover student costs.  

The poll suggests that people value not just education but also affordable education that doesn’t increase its costs without producing greater benefits.  

The Sept. 24 walkouts, where workers, students and faculty across all UC campuses protested the fee increases, mark one of the largest coordinated political actions in the university’s history.  The action reflected the students urgent sense that California’s public universities are in danger.

For students, the immediate consequences are paying more for their education and getting less.  System-wide, courses are being cut, classes are swelling in size, professors are taking pay cuts, and enrolment is severely limited.  Cut out of crucial classes, students are finding they need to take extra quarters and semesters they can no longer afford.  The question left hanging in the air is whether or not quality education is a UC priority anymore.  

The move, which went largely unnoticed by faculty and students, raised questions about whether the tuition increases and furloughs were required out of dire necessity or simply to secure a better bond rating.  

In fact, Meister notes, the UC’s claimed fiscal emergency after an $800 million shortfall, which is less than 3 percent of the UC budget.  In the opinion of Jeffery Bergamini, creator of the salary scales analysis website, the declaration of emergency was seen as a perfect opportunity for the UC to demonstrate how they can’t rely on the state.

The reality, he says, is that the students can’t rely on either the state or their schools.  

Additionally, as reflected by its own salary figures, UC appears to value its own management over the teaching faculty.  

From 2004 to 2008, UC employees earning over six figures saw a slight raise in their pay.  In those same years, people earning less than six figures experienced a decrease in pay.

Editor's Note: Corrects by deleting fiscal data in penultimate paragrah of original version.

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