Wednesday, May 7, 2014

We've Said It Before: LAO Stance on UC Pension is a De Facto Push for Higher Tuition & Privatization

And we'll keep saying it.  As long as the Legislative Analyst's Office (LAO) pushes the position that the state has no liability for the UC pension, it is de facto pushing for higher UC tuition and de facto privatization. 

Why? Because if the state doesn't accept the liability - and LAO presents no legal research saying it isn't the state's liability - then tuition has to go up towards private university levels.

In the latest LAO document - Addressing California's Key Liabilities - we find the following:
Page 8:
These liabilities include unfunded liabilities for pension and retiree health benefits for state employees, as well as for pension benefits for the state’s teachers and school administrative personnel. (For the purposes of this report, the term “state employees” includes judges and California State University [CSU] employees but not UC employees. UC employees are addressed in this report separately from state employees.)
Page 7 has table showing UC pension unfunded liabilities as $13.8 billion.
Page 8 has table also showing the $13.8 billion.  It lists the liability for the pension to the state's general fund for this as "unknown" and says an alternative source for funds is UC and UC employees.
Page 12:
General Fund Has No Direct Responsibility for UC Retirement Liabilities.
The state does not have a legal obligation to provide funding to the UC specifically to pay for its retirement liabilities...
Bottom line: UC, like CSU, is a state entity and its pension is thus a state activity.  UC does not have a money printing press - but it does have tuition.  If the state doesn't pay for the pension - as it does for CSU - tuition at UC will go up towards private university levels.  It really is that simple.  Whatever legal distinction LAO wants to make between CalPERS (which covers CSU) and the UC pension is a distinction without any practical meaning.  And we will continue to point out this simple fact.

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