The Master Plan for Higher Education in California is a long, winding document that aims to establish the economic future of public education. Yet, it fails to responsibly account for one of the most basic economic forces: inflation.
Throughout the 230 pages of the Master Plan, inflation is mentioned just twice and in vague terms. The Master Plan acknowledges that University expenditures are continually increasing and that one of the biggest contributors to rising expenses is inflation. However, the Master Plan contains no specific contingencies to address “cost of living” adjustments due to inflation.
According to the Bureau of Labor Statistics of the U.S. Department of Labor, $1 in 1960, when the Master Plan was created, was worth almost $8 in 2014. Such a decrease in the value of the dollar raises the costs of regular university expenditures, such as teachers’ salaries, equipment and facilities maintenance.
Cost-of-living formulas are already in place for many other programs that rely on government funding. For example, Social Security benefits increase from year to year for an individual depending on the percentage of inflation. Like Social Security, the Master Plan must include specific formulas that annually increase the allocation of state funding to match the inflationary forces.
In the decades since the Master Plan was written, the costs of maintaining an educated workforce, arguably one of the most crucial responsibilities of the state and one of the greatest drivers of economic growth, has been displaced more and more onto the backs of students.
UC President Janet Napolitano has said that the recent tuition hikes are partially meant to address costs of inflation, which state funding has failed to provide for.
While Gov. Jerry Brown has agreed to 4 to 5 percent base increases for five years in exchange for a tuition freeze, this is an insufficient way to mitigate the UC’s funding problems. The state has broken the terms of compacts with the UC many times before, and the increases are especially uncertain now that the UC Board of Regents approved a possible tuition hike for the next five years.
If state funding accounted for inflation, one of the causes of tuition hikes would be abated. Provisions in the Master Plan accounting for inflation would allow for increases in public education base funding every year without holding students hostage with threatened tuition hikes.
Funding for higher education in California must evolve every year. To manage the complexities of California’s education system, the Master Plan must adjust to changes in the economy.
Otherwise, California’s educated workforce, the very backbone of its economic growth, will suffer.