Priorities Re-examined:A Study of University of California Finances 2004-11
Across the country, rising tuition costs have made headlines over the last several years. California’s own flagship higher education system, the University of California, has seen unprecedented tuition increases over the past several years. It is often argued that the UC’s tuition increases were a response to decreasing state funding of the system. This article peeks behind the curtain of the University’s finances to determine whether these increases constitute the only possible response to the state’s decreasing financial support. We identify several relevant trends over the past decade, including the rise in prominence of medical centers within the system, a rapid increase in the number of non-medical school management employees relative to non-medical faculty numbers, stagnating non-medical faculty compensation and unabated spending on new construction.
The recent dramatic tuition hikes within the University of California (UC) and California State University (CSU) systems are emblematic of the rise in higher education prices over the past several decades. The national average annual price for a 4-year institution has increased from $12,185 in 1990 to $20,986 in 2010, in 2010 dollars.1 That is a 72% increase, part of which stems from rising room & board costs. Higher education experts have proposed the following as other factors contributing to this trend:2
- increasing costs of facility maintenance
- increasing demands for sophisticated facilities on campus
- increasing salary costs associated with a higher staff to student ratio
- increasing cost of staff health benefits
This report evaluates these and other possible reasons for the tripling of the sticker price of a UC education over the past decade. 3 In the same period, state support for the university dropped from 27% of the operational budget to 11%.4 While experts agree that the state’s disinvestment in public education is the proximate cause of the rising tuition, we ought to examine how the university system reacts (or fails to react) to these revenue fluctuations. The UC administration has insisted that students did not bear the entire burden of reduced funding from the state and that the burden was spread out across the system. In a letter to the students and their parents in 2011, UC President Mark Yudof insisted that the additional tuition hikes were implemented “only after the campuses and the Office of the President had absorbed as many cuts as possible without irreparably damaging the quality of the system.” 5 We examine what accounted for the growth of tuition and assess whether the University made all such cuts.
Over the last decade, the UC experienced substantial operational cost increases. However, our analysis shows that most of the increase can be attributed to inflation, rising student enrollment and medical school expansion. This means that the real cost of operating the system per undergraduate UC student has not changed appreciably. Therefore, since other sources of revenue have not declined, tuition increases are primarily used to compensate for the real drop in state funding.
But beneath this surface relationship between tuition and state funding, we highlight two noteworthy trends. First, the increasing prominence of the medical schools does not account for the rapid growth among management employees over the past two decades. A larger management team translates into increased spending on its salaries and the salaries of its growing support staff. Second, we find that spending on new construction has continued unabated in the face of declining state funding and rising tuition. Meanwhile, faculty and other staff salaries have stagnated. Furthermore, although the allegations that the university has courted out-of-state students for their higher fees were not true in the past, according to the university, the 2012-13 academic year will see this policy implemented.
The present report does not consider programmatic priority trade-offs within the system.6 We acknowledge that there are numerous decisions that impact the system’s operating costs: extension education vs. summer sessions, health benefits vs. merit pay increases, merging vs. eliminating departments, leasing vs. purchasing of buildings, raising graduate vs. undergraduate vs. professional fees, and the distribution of funds between campuses. These decisions can make tremendous a difference in financial and quality outcomes for the University, but they are not within our analytical purview. Similarly, we purposefully sidestep the discussion of potential new revenue sources, although this likely will be crucial to climbing out of the present financial difficulty.7 We restrict ourselves to assessing the high level view of spending and programs.
The following discussion of the possible cost drivers for the UC system references Figures 1-4 below, prepared by the author.8 These graphs illustrate total UC spending for 2004-2010 by category and area and its revenue sources.
Note: Dotted lines are quadratic curve approximations of the actual numbers illustrating the overall trend. Categories do not add up to the total budget, as smaller costs such as debt service are excluded.
Two trends are immediately apparent from these graphs, but these are largely red herrings.
First, Figure 1 shows seemingly skyrocketing expenditures on benefits after 2005-06. This apparent spike is due primarily to a legally mandated change in the accounting method for retirement benefits that was implemented in 2007.9 The spike includes a rapid increase from $0 to $3.2 billion in 2010 of accrued pension and retiree health benefit expenses.10 But one must be careful to note that these constitute incurred long-term obligations. In the 2009-10 fiscal year, the UC actually paid only $46 million to the pension fund and $230 million to retiree health care benefits fund. In other words, the lines for benefits in Figure 2 do not represent the amount the university actually paid out in those years. Such a graph would show relatively little change from year to year.
Since the UC Retirement Plan was 95% funded as of 2009, further contributions into it will likely exert little pressure on the budget in the near future.11 The retiree health benefits trust (UCRHBT) is another matter, for its assets are currently only one half of one percent of its projected $14 billion liability, meaning that the annual payments to beneficiaries come almost entirely from a given year’s budget.
Basic calculations indicate that these payments must rise significantly in the coming years.
Second, the reader may be surprised to learn that medical centers comprise the largest area of spending (Figure 2). Comparing expenditures to revenues (Figure 3) demonstrates that unlike some teaching hospitals, UC medical centers consistently generate several hundred million dollars in operational profits. In fact, all five medical centers are consistently profitable, with the Los Angeles center generating a nearly 30% operational profit. Hence, while the financial prominence of medical centers may be surprising, it does not constitute a net expenditure for the system. Indeed, the medical centers maintain their own financial accounts, so their expenses are covered by their own revenues and vice versa, their revenues are only used for their expenses.12
But though they may not be a net draw on UC funds, we believe it is worth asking if the relationship between medical schools and the rest of the system bears further scrutiny, given medical schools’ large and growing financial role in it. Even factoring out their restricted funds (their revenue and expenditures), medical schools have a strong impact on their home campuses, as judged by revenue graph comparisons of schools with and without medical schools (Figure 4). Of the two types of campuses, those with medical schools receive a much larger proportion of their revenue from the federal government and non-medical sales, even though the medical schools themselves receive no money from either category of funds.14 Although we cannot draw any specific conclusions from this information alone, the increasingly prominent non-medical sales revenue source may drive the university to shift its focus toward it. The commercial nature of that source will threaten the university’s core educational mission should it translate into the university deprioritizing non-commercial activities such as research and teaching.
Disproportionate Staff Growth
Because staff compensation composes the majority of the operational budget, disproportionately large staff and salary growth is probably the most often cited factor in escalating higher education costs. While disproportionate compensation for administrators may be problematic for public relations and symbolic reasons, in actuality, “Senior Management” salaries accounted for only $70 million in compensation in 2009-10 – less than one percent of aggregate expenditures on salaries.15 However, if we look at management more broadly, the contentions regarding excessive staff growth and resulting misdirected pay appear validated. Prof. Charles Schwartz at Berkeley has graphed the dramatic rise in the number of “management and senior professional” employees at the UC in the past twenty years.16 While the total number of employees grew 47% overall, the management and senior professionals group has grown 220%. In comparison, faculty as a whole has grown 44% during this period and student enrollment approximately 41%.
A major factor in the overall rise in the number of employees and total compensation has been medical schools, which account for over half of the growth in non-academic employment since the late nineties. However, most of the growth in management cannot attributed to them, as the two campuses that have seen the greatest gains in management employees since 1991 do not have medical schools: Berkeley and Santa Cruz (336% and 324% respectively).17 At Berkeley, while overall staff increased only 3% between 2004 and 2010, the number of “senior management” and “senior professional” employees increased 36%, while faculty increased only 5%.18 The UC Administration has defended these increases as a “professionalization of the workforce”, which is difficult to verify given the categorization of the existing data because management and “senior professionals” are lumped together in historical reports. A strong case can be made for a changing academic ecosystem requiring a growing number of computer specialists and other professional employees.19 But even if this is the case, the magnitude of growth in this one group compared to the stability of others is noteworthy.
Furthermore, it may surprise an outside observer to find out that professional and support staff outnumber academic staff 2:1. In fact, regular faculty members account for only about 15% of all UC employees (not including graduate student assistants). While the medical centers employ a substantial portion of all UC employees (also about 15%), in the context of the UC’s instruction and research mission, these non-academic staff numbers should give us pause.
Rising staff numbers have obvious implications for total salary expenditures. 20 As Figure 1 illustrates, faculty salaries composed less than 15% of all salary expenditures in 2010, a proportion that has been shrinking over time (the rate of increase of spending on faculty salaries lags behind increases in overall spending on salaries: 30% vs. 41% respectively from 2004 to 2009 in nominal dollars). However, the inclusion of medical school salaries in the overall salary numbers complicates comparisons of reported statistics (e.g. staff numbers and salaries).
Examining only data from campuses without medical schools (which as a group are fairly representative of the system in other ways) allows us to exclude medical schools’ contributions from the campus employment figures, at least to a first approximation. Within these four campuses, we see that aggregate faculty salary increases kept pace with total employee salary increases: 24% vs. 22% respectively between 2004 and 2009.21 But controlling for the 14% inflation over that period and a 5% growth in the number of faculty on those campuses, real individual salaries have effectively stagnated. As a result, both faculty and employees as a whole have seen their salaries drop below market rates over the last decade, with faculty salaries dropping to less than 90% of market rates.22 While it is true that the dollar value of average non-salary benefits of UC employees has been approximately $1,000 higher than those of comparable institutions, this is not nearly sufficient to make up for the salary gap, which could make UC uncompetitive with peer institutions when it comes to faculty hiring and retention.
Unfortunately, we cannot perform the same analysis for management employees, because their aggregate compensation figures had not been tracked separately until recently. But based on the evidence adduced above, it is fair to say that management as a group has grown rapidly, in stark contrast to non-medical school faculty and staff. Often lost in the discussion of “management” growth and compensation (which accounts for only 6% of salary expenditures) is the accompanying growth in support staff.23 The financial consequences of this growth are substantial: over $2 billion was paid out to management and management support staff in 2009, almost twice the aggregate faculty compensation in that year.24 To our knowledge, the University has not presented a compelling explanation for this trend and we can identify no external pressures over the past two decades that would call for such top-heavy growth.
The “Straight Talk” report cited above in note 2 claims that much of the cost increases in higher education can be attributed to increasing demands for sophisticated facilities at premier universities. These include computer equipment, attractive housing, sports facilities and expensive scientific laboratories. Unfortunately, the UC does not keep track of spending on most of these categories (e.g. technology, athletics).25 We urge the University to quickly introduce new information tracking measures throughout the system that would allow for these evaluations, possibly modeled on Berkeley’s new Cal-Answers program.
Excessive Construction Spending
Unnecessary capital investment is another factor frequently mentioned when discussing growing costs, and tuition increases in particular. Indeed, some have attributed sinister motivations to the UC Regents, alleging that they are courting (presumably less than necessary) major capital projects from large corporations.26 Arguably, this would be problematic because the projects are partially funded by bonds backed by tuition revenue, inviting future tuition hikes to cover the debt. This arrangement was made possible by a 2004 Regents decision to allow capital projects to be tuition funded.27
If construction projects were a major factor in total cost (and tuition) growth, the figures should show increasing capital expenditures over time, tracking the fee increases. A quick glance at Figure 1 shows this not to be the case: there is no consistent correlation between tuition and construction growths, at least during the short time segment for which data is available. Examining these numbers in more detail (Figure 5), one can see that the pace of building construction (combining campus and medical centers) has been relatively constant with the exception of 2009 and 2011. Incidentally, 2009 was the year in which the Regents twice raised tuition by a total of more than 40%.28
But even if the more extreme allegations are unsubstantiated, one might suggest that in the face of continuous cuts in state funding, it would be prudent to not merely contain growth of (new) construction, but also to reduce or even stop it altogether as some schools have done.29 According to UC documents, most new construction projects in this period are not urgent.
For example, out of the $890 million that Proposition 1D allocated to the UC for construction in 2006, only $75 million was for “Seismic/Life Safety” issues, while $465 million was earmarked for “Enrollment Growth,” and $200 million for a new “Telemedicine/Medical Education” center.31 Similarly, in the 2008 UC capital funds request, only 18% of the requested funds were for “Critical Infrastructure Deficiencies,” and nearly half were for enrollment growth.32 Even maintenance such as seismic retrofitting may go beyond what is appropriate with “renovation costs that extend well beyond life safety and building systems” and “markedly upgraded finishes.”33 As the student population continues to grow, facilities must naturally be renovated and expanded to satisfy the University’s mandate of accessibility. Yet these figures raise the question: are the growth needs so pressing as to justify the steep tuition increases (necessitated by the repayment of debt)? Are the present facilities being used near capacity? Or can the University make do with the present facilities and leaner upgrades in these times of unprecedented financial hardship and uncertainty?
In the past, UC officials have responded to such claims in several ways. They justifiably point out that capital projects take many years, are planned years in advance, and therefore cannot track annual budget fluctuations. Moreover, these projects are frequently funded in advance and, more importantly, they are funded with money – such as general obligation or revenue lease bonds – that cannot be legally diverted to operational expenses.34 Indeed, much of the funding for capital improvements – whether from the state or not – derives from debt, typically a sale of bonds.35 So if the money is there, the argument goes, and it cannot be used otherwise, why not continue the construction?
While both points are accurate, the fact is that construction projects are routinely halted at various stages of completion when funding becomes inadequate. In fact, the University itself briefly suspended a number of construction projects in 2008 when the State froze disbursements of capital outlay funds. As a result of the freeze, dozens of UC projects totaling $983 million were put on hold.36 It was only after additional bonds were sold in the following year that construction resumed. This event demonstrates the feasibility of suspending construction when money is tight, but also why it is misleading to simply treat construction funds as off-limits. For while the money from a given bond sale is restricted to capital projects and cannot be redirected to operational needs like salaries, construction as a process is funded by a continuous stream of new sales of debt, presenting an opportunity for re-evaluations of priorities on every occasion. Indeed, state money bound for capital projects typically draws on money from multiple bond sales, as far back as 10 or more years. And because the bond debt is repaid from general funds (either by the State or by the University itself), forgoing new construction -bound debt would free the money that would otherwise go to paying down the principal and interest to be spent on operations.37 The University requests money for construction from the state on an annual basis (the request appears in the Infrastructure Plan put out by the state department of finance and by the UC itself, c.f. note 32). If they requested less money for construction, there is no evident reason why they could not correspondingly increase the sum requested for operations. That money could then be used either to cement the quality of the system (e.g. by augmenting faculty salaries) or reduce the tuition burden on students.
Preference for Out-of-State Students
There is an often expressed fear that in order to increase revenue from tuition, rate hikes will be combined with a concerted effort to increase out of state enrollment (since out-of-state students pay much higher fees – an additional $23,000 per year on top of regular tuition in 2011-12). If we look at the proportion of non-resident students over time (Figure 6) – both for the whole system and most individual campuses – we can see this has not yet occurred. But it seems that this is the year when this fear is realized. The 2012-13 UC budget lists precisely this approach as one way of meeting the budget shortfall: “all campuses are attempting to increase enrollment of nonresident undergraduates.” The acceptance figures for the next academic year show this plan is being implemented. Twenty three percent of the admitted freshmen are from o ut of state, compared to last year’s 18%.38 If this pattern is sustained over the next several years, it will mean a substantial departure from the recent past, when out of state students were never more than 20% of the student body.
Although UC operational expenditures have nearly doubled in the past decade in nominal dollars (from $12 to $22 billion), inflation and student enrollment growth account for most of the increase, and medical school expansion and incurred employee benefits obligations account for the rest. If we exclude the medical schools (whose accounts are kept separate from the rest of UC accounts) and system wide costs (which include the benefits obligations), the UC operating budget increased from $11.9 billion to $13 billion in the analyzed period, controlling for inflation and student population growth, an increase of less than 9%. Furthermore, even some of that expenditure increase appears to be due to medical-program related growth because among the four main campuses that do not have a medical school (Berkeley, Riverside, Santa Barbara and Santa Cruz), we see a total increase of only $146 million, from $3.4 billion to $3.6 billion, or 4%. Behind this fiscal stability, however, we find the following notable trends that point to a lack of creative problem solving in the face of fiscal straights:
- Although the medical center finances are separate from the rest of the system’s, campuses with medical schools are more dependent on the sale of services for their funding than those without. We are concerned about the possible corrosive effects of this commercial dependence on the mission of the University. For this and other reasons, we believe the proper relation between the medical center system and the other components of the university merits more public discussion.
- Against the backdrop of stagnating compensation among faculty and university staff as a whole, we see a rapid growth in aggregate management and support staff compensation driven by their increased numbers. While some of this is due to rapid expansion of medical schools, it is actually most pronounced on campuses without medical schools. The stagnation of faculty pay casts a shadow over the future excellence of education and research. While our report does not examine retention and hiring rates among the UC academic ranks, this trend can only have one effect over time.
- Capital investment has been relatively unchanged over these financially turbulent years, although a spike in 2009 coincided with one of the steepest tuition increases in history (the biggest beneficiaries were Berkeley, Los Angeles and San Francisco). Berkeley alone has spent at least $220 million every year since 2004 on construction, going up to $340 million in 2011.39 While certain maintenance such as seismic retrofitting is of course necessary, much of this spending is on new developments. We argue that this money can over time be shifted to operations; whether this should occur demands further public discussion. This point has been made before, as recently as two years ago in the UC Academic Senate’s “The Choices Report,” but given the availability of more recent data, we are able to present a more defined picture of these costs.
- Because non-resident students pay a much higher tuition, there is a concern that the university will attempt to admit more out-of-state students in place of residents to increase revenue. This would imperil its mandate to admit all eligible graduating seniors from California. Our analysis shows that while in the past the proportion of non-resident students has remained under 20%, the 2012-13 incoming class includes a significant surge of out-of-state students. If this pattern is sustained over the next several years, it will mean fewer resources devoted to the education of California residents, ceteris paribus.
- Finally, our experience of conducting the research for this article revealed the UC could greatly improve its transparency. To be sure, in the course of our work we received ready assistance from a number of individuals within the system. Additionally, since 2004, the Office of the President has releasing large amounts of information, financial and otherwise, for which the administration is to be commended. But there remains a manifest desire to control what information is released and how it appears. Beyond that, the UC has little interest in information that is not explicitly designated for release but which is still essential for a thorough understanding of the university’s financial situation as a whole and its change over time.40
In some cases, it is simply a matter of improving record keeping. For instance, despite their independence, medical school statistics (e.g. salaries, staff numbers, benefits) are lumped with the entire system’s. And categorical compensation records are still available for only the last several years. In other cases, the lack of transparency can be traced back to conscious decisions. As recently as two years ago, the university opposed state legislation that would increase its transparency and accountability.41 Although the UC Archive has records from UC administrations and Regents’ meetings going back to the 19th century, those records stop at 1975 because the President’s office has not released them, hindering historical analysis. Even if these records can be obtained through Public Records Act requests, that process is unnecessarily difficult, given the scope and variety of documents that are preserved. The financial structure we have tried to illuminate is extremely complex, and therefore our account is necessarily incomplete. Precisely because of the system’s complexity, continuing its 50-year-old mission under the present financial constraints will require all interested parties to work together.
The past decade has been hard on higher education in California. In particular, the state government has been slashing funding for the University of California system to the point that state contributions now constitute barely more than 10% of the University’s budget. It goes without saying that the University should do everything in its power to recover state funding as the economy improves. However, falling state support alone is not enough to explain the tuition increases that have tripled the sticker price of a UC education over the past decade. Although tuition increases are largely replacing state money on campuses without medical schools, is this the only possible response? We reveal several trends that indicate otherwise:
- Significant growth among management and support staff that rapidly outpaced faculty growth and cannot be attributed to medical schools. Stagnating faculty compensation causes further concern.
- In the face of funding uncertainty, construction spending continued effectively unabated during the last seven years.
Additionally, we highlight the need for greater transparency with respect to important financial information. When viewed together, our findings suggest that the UC Regents, as the ultimate custodians of the University, are not responding quickly enough in the face of today’s financial challenges to preserve the University’s hard-won premier status. We should demand greater transparency, accessibility and a sincere commitment to reducing non-mission critical costs from our public university.
Works Cited [+ Expand]
1 Total tuition, room and board rates charged for full-time undergraduate students in degree-granting institutions (NCES “Fast Facts”. 2011. http://nces.ed.gov/fastfacts/display.asp?id=76). But that is a national average for all schools both private and public. In comparison, Ivy leagues will charge an average of over $37k this year just for tuition.
2 National Commission on the Cost of Higher Education. 1998. “Straight Talk About College Costs and Prices: Report of The National Commission on the Cost of Higher Education.” http://www.nyu.edu/classes/jepsen/costreport.html
3 The average UC resident undergraduate fee rose from $3903 in the 1999-2000 school year to $12,192 in 2011-12
(“Budget for Current Operations, 2012-13”. 2012. http://budget.ucop.edu/pubs.html).
4 Nor is this due to outrageous growth of UC spending. As a percent of the state budget, UC funding has decreased from 4.2% to just under 3% in the past decade; it was 7% in 1970 (Ibid, 2012-13 and 2001-02 years).
6 For such a discussion, see the 2010 UC Academic Senate report (“The Choices Report.” 2010. http://www.universityofcalifornia.edu/senate/ucpb.choices.pdf)
7 For instance, it is estimated that an additional $600 million per year could be obtained by recovering a greater portion of overhead costs charged on research grants, which are currently far lower than that of peer institutions, such that the university is in effect subsidizing sponsored research (Ibid, p. 40).
8 All graphs in this report were generated from interactive visualizations which may be found on the CACS website http://www.cacs.org/visualization/state. The data for Figures 1-4 was obtained from consolidated schedules A and B, available at http://www.ucop.edu/corpacct/finschd/,and the “Report on Audit of Financial Statements” (henceforth “A-133 Report”) found at http://www.universityofcalifornia.edu/reportingtransparency/.Categorical capital expenditures are taken from “Per-campus Capital Assets” record, obtained from UC Office of the President via a Public Records Act request. Faculty salary numbers come from the AAUP faculty salary report (“AAUP Faculty Compensation Survey.” http://www.ucop.edu/ucophome/uwnews/stat/), and do not include clinical professors and certain other categories of faculty. Years refer to the first calendar year of the fiscal year in question.
9 The $3 billion increase in benefits payments from 2006 to 2010 is mainly attributed to the “impact of amortizing the University’s unfunded obligation” (2010 A-133 report, p.7). Subsequent to the change, expenditures on benefits are recorded for the year in which they are earned (when the obligation is first incurred), rather than in the year in which they money is actually transferred from UC accounts, which may happen decades after the obligation is incurred (the approach of the prior “pay as you go” accounting system). The discussion that follows is based on the cash flow and total liability charts found on pages 26, 76, 80 of the 2010 A-133 report.
10The other component of “benefits” is benefits paid to current employees, and these represent actual amounts paid.
11 However, the UCRP may require much higher contributions in the near future. Due to changes in actuarial assumptions in the past two years, it was judged to be only 82% funded as of 2011 and may require much higher annual contributions in the next few years than the $46 million contributed by the University in 2009. See the “University of California Retirement Plan Actuarial Valuation Report,” 2011. http://www.universityofcalifornia.edu/regents/regmeet/ nov11/f2attach1.pdf; and Joe Nation, “Pension Math: How California’s Retirement Spending is Squeezing The State
Budget”. 2011. http://siepr.stanford.edu/system/files/shared/Nation_Statewide_Report.pdf.
12Capital expenditures, however, are not quite so segregated, since bonds that fund some of these projects are repaid from general fund revenues either by the state or by the University (see below).
13Davis, Irvine, Los Angeles, San Diego and San Francisco campuses house medical schools. Berkeley, Riverside, Santa Barbara, and Santa Cruz do not (Riverside is in the process of constructing a teaching hospital; Merced was excluded for the purpose of this analysis as it only began operation in 2005).
14These revenues include auxiliary enterprises sales (“parking, dining services, bookstores, faculty housing”) and other sales and services (“income from the health sciences faculty, compensation plans and a number of other sources, such as neuropsychiatric hospitals, the veterinary medical teaching hospital, dental clinics, fine arts productions, museum ticket sales, publication sales, and athletic facilities users”) (“UC Budget Request, 2011-12.” http://budget.ucop.edu/rbudget/ 201112/2011-12-budget-detail.pdf, p.13). Financial schedule D records from the UCOP show that with small exceptions medical schools are funded entirely with medical school revenue.
15Base pay, as computed by Prof. Charles Schwartz at Berkeley from UC Payroll data (“ New Data on Management Growth at UC.” 2011. http://universityprobe.org/2011/03/new-data-on-management-growth-at-uc/). These figures do not include bonuses and other compensation that can be substantial.
16Ibid. In 2010, “managers” composed 54% of the “Management and Senior Professionals” category. Most of the rest is made up of senior computer programmers, analysts and medical professionals. (“The University of California Academic and Non-Academic Personnel Growth FY 1997-98 TO FY 2010-11| Executive Summary.” http://www.universityofcalifornia.edu/news/documents/ucpersonnelgrowth.pdf, p. 6).
17Furthermore, we know from internal data that the number of non-medical center employees in the Management and Senior Professional category paid from General Funds increased by 125%, from 1,200 to 2,700 between academic years 1997 and 2008 (“The Choices Report”).
The UC report (note 16) contends that “an increasingly complex University system requires greater professionalization of its staff, who must meet higher technical and competency standards” (p. 2). It is hard to believe that in the mid-1990’s the University did not require high technical and competency standards.
20Although we do not have historical average salary data for management and management support employee categories, there is nothing to suggest they have decreased over time.
21Faculty salary numbers come from the AAUP faculty salary report (“AAUP Faculty Compensation Survey.” http://www.ucop.edu/ucophome/uwnews/stat/), while total salary spending is taken from consolidated schedule B.
22 See the UCOP 2011-12 budget request for comparison of compensation to market rates (“Budget for Current Operations, 2011-12.” http://budget.ucop.edu/rbudget/201112/2011-12-budget-summary.pdf,pp. 26, 8).
23The number of “Fiscal, Management and Staff services” employees has increased 17% between 2004 and 2009 across the system (“Personnel Tables”).
25A major roadblock is that a large portion of this spending is capital expenditures which are not included in expenditures broken down by program.
26The Council of UC Faculty Associations. “They Pledged Your Tuition Index.” http://www.cucfa.org/news/ tuition_bonds.php. See the UC CFO’s response at “Faculty union leader’s claim about student fee increases called misleading.” 2009. http://www.universityofcalifornia.edu/news/article/22164
27See Tanya Schevitz. “UC regents’ powerhouse chief, Richard Blum.” 2008. San Francisco Chronicle. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/14/MNRVVU1JD.DTL&ao=2; and The Council of UC Faculty Associations. “They Pledged Your Tuition.” 2009. http://www.cucfa.org/news/2009_oct11.php
28Jim Doyle. “UC regents vote to raise tuition by 9.3%.” San Francisco Chronicle. http://www.sfgate.com/cgi– bin/article.cgi?f=/c/a/2009/05/07/BAQA17GSI8.DTL and Nanette Asimov. “UC regents approve steep tuition hike.” San Francisco Chronicle. http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/11/19/BAGN1AND7E.DTL. Although the two events were most likely not causally linked the timing is itself symbolic.
29A recent report on this question by California Watch makes a similar point (“Public universities plow ahead with construction despite tight budgets.” 2012. http://californiawatch.org/higher-ed/public-universities-plow-ahead– construction-despite-tight-budgets-15273)
30Source: “Per-campus Capital Assets” record, obtained from UC Office of the President via a Public Records Act request. Building construction figures may include capital acquisitions (e.g. outright purchases).
31 “UC Proposition 1D” http://www.bondaccountability.uc.ca.gov/default.php.Although medical center operations are financed internally, much of their capital expenditures are eventually funded either by the university or tax payers. Thus the bond that funded the tele-medicine centers is paid back via state funds appropriations (See the LAO’s analysis of Proposition 1D, “Kindergarten-University Public Education Facilities Bond Act of 2006.” http://www.lao.ca.gov/ballot/ 2006/1D_11_2006.htm) or tuition revenue (c.f. note 26).
32“2008 California Five-year Infrastructure Plan.” 2008. http://www.dof.ca.gov/capital_outlay/reports/documents/ Infra-Plan-08-w.pdf p.145.
33“The Choices Report” p. 42.
34“The Budget Crunch and UC Building Projects.” 2009. http://www.ucop.edu/finance/documents/bldg_proj_fs.pdf
35“2008 California Five-year Infrastructure Plan,” and “Five-Year Capital Program Non-State and State Funds” http://budget.ucop.edu/nonstate/5yrnstcp.html
36Rex Graham. “State Bond Sales Unfreeze Two Construction Projects at UC San Diego.” 2010.
37 Traditional revenue bonds are paid off by the revenue generated from the constructed facility (say a stadium or a toll bridge). The bonds that fund construction by the UC are “general obligation” and “lease revenue” bonds, both of which are typically repaid from the state general fund (see the California state Treasurer FAQ at http://www.buycaliforniabonds.com/faq.asp).
38 Lisa Leff. “UC reports jump in out-of-state student admissions.” 2012. http://www.mercurynews.com/news/ ci_20415437/uc-sees-jump-out-state-student-admissions
39 “Per-campus Capital Assets record.” Aside from expensive maintenance and seismic mitigation, this includes two new biomedical facilities, each over $100M and other similarly priced projects.
40For instance salary breakdowns for years prior to 2007 could be made available in the same way as headcounts of employees. Admittedly, some of the information we were seeking is difficult to collect due to basic accounting principles – e.g. separation of operational and capital expenses – and recent changes in benefits recording procedures.
41Most recently, this was illustrated by the University’s opposition to several bills expanding reporting requirements (SB 330-2010), improving protection for whistleblowers (SB 650-2010) (“2010 Legislative Review”, http://www.ucop.edu/state/legislation/docs/2010briefing.pdf), and mandating that executive compensation decisions to be made in public sessions (Senator Yee’s SB 190-2007).