Correction: The original version of this article published on September 19 contained an error. The UC Board of Regents will look at changing eligibility requirements for retiree health benefits.
Retiree benefits took center stage at the UC Board of Regents bimonthly meeting in San Francisco last week as the regents voted to increase the amount employers and employees will contribute to the UC retirement fund.
“I think we have to start down this path or we’re going to be in real trouble,” UC President Mark Yudof said.
The regents will also be changing eligibility requirements for retiree health benefits.
While regents said nothing is set in stone yet, the proposed changes have already sparked protest among UC faculty, staff and students.
Dozens of union members, accompanied by students and faculty, picketed the entrance to the UC San Francisco Community Center before Thursday’s meeting, banging drums, brandishing water bottles filled with beans and water jug fragments. Chants of “UC greed has got to go” pierced the morning air.
UCLA history Professor Frank Higbie said the retirement package drew him from Illinois to the teaching position with UCLA in 2007. Now, he said he worries that the UC will lose that incentive.
He also fears a more hostile, unpleasant work environment if staffers lose benefits.
The UC Retirement Program is currently only 95 percent funded. In 1990, a surplus led the Board of Regents to suspend contributions to the pension fund. Contributions resumed in May 2010, as it became apparent that the program was underfunded. This was a result of market costs, changes in demographics and diminishing help from the state, the UC said in a press release.
Blame placed on the state
The lack of state assistance has led to visible frustration among the regents. In spite of fee increases, budget cuts and the funding restoration proposed by Gov. Arnold Schwarzenegger, UC still faces a $275 million shortfall due to rising costs.
“Are we being too damn nice?” Regent Norman Pattiz said.
The budget standoff in Sacramento compounds the difficulty in charting a course, said Patrick Lenz, vice president for budget for the UC Office of the President. While both the governor and the legislature have expressed support for higher education, California is grappling with an unsigned budget and a $20 billion deficit.
The UC system has weathered the storm through borrowing, fee increases and a variety of other measures.
Lenz promised more detailed recommendations for the regents in November, but in the meantime, Yudof and Chairman Russell Gould urged the regents to be “judicious” and set priorities in anticipation of the 2010-2011 budget.
“We’ve got a whole wish list here, all credible, all important,” Gould said. “We’re not going to get them all.”
Regent Richard Blum advocated an intense fundraising campaign instead of cutting student enrollment. Appointing a fundraising “czar,” he said, would also help.
“The state is an unreliable partner,” he said. “The further we can get away from dependency on the state, the better.”
Enrollment concerns
Lenz said he agreed with the perspective that higher education should be prioritized for lawmakers, and added that the state places its highest emphasis on two issues: student fees and enrollment.
“If you take enrollment off the table, you’ve taken one of the issues away that Sacramento cares about,” Lenz said.
He also said he believes the state has an obligation to fund enrollment.
“(The state will) fund the $45,000-a-year prisoner, but want to curb access to the $10,000-a-year student?” he said.
Lenz added that the governor recognized the obligation in the budget this year, providing more than $50 million for unfunded enrollment.
But what makes UC different from other entities in the budget ““ Medi-Cal, CalWORKS, etc. ““ is its power to raise student fees.
This power to raise fed the perception in the Capitol that the university is more self-sufficient than other programs competing for state funds, Lenz said. He supports a balanced budget, but said UC alumni are an important fuel for the California economy.
Anderson proposal
As UC campuses seek out ways to save costs and increase efficiency, the UCLA Anderson School of Management offered up a proposal to increase self-sufficiency.
Chancellor Gene Block and Steve Olsen, vice chancellor of finance, budget and capital programs, delivered the presentation before the regents.
The professional school would no longer receive state funds under the proposal. To offset the loss of state funding, Anderson plans to increase private support, contain costs, increase revenue sources and raise tuition.
The tuition increase, and the proposal itself, has sparked protest within the graduate student community. During the public comment period, representatives of the Graduate Student Association accused the school of privatizing.
GSA External Vice President Cheye-Ann Corona called the arrangement “business-oriented.”
“I see it as … a way to justify privatizing, a slow creep toward that,” said Corona, who is pursuing a masters degree in urban planning and Latin American studies.
But Anderson’s dean, Judy Olian, said privatization is different than financial self-sufficiency, as the school will stay entirely within the framework of UCLA, from faculty tenure to programming.
A predictable budget will give the school more flexibility, Olian said. She also added that a 30 percent increase in financial aid is aimed to ease the tuition spike. The new model would also support underfunded undergraduate programs at UCLA.