Tuesday, April 12, 2016

A selective, misleading and inflammatory report

Stabilize needed state funding for UC, CSU systems

San Francisco Chronicle, Lenny Mendonca and Jim Wunderman

Lenny Mendonca is director emeritus at McKinsey & Co. Jim Wunderman is president and CEO of the Bay Area Council.

Most Californians would agree that attracting out-of-state investment is positive, particularly when it’s helping pay to solve a problem we have been unwilling to pay to fix ourselves. For the University of California, out-of-state investment by nonresident students generates $728 million for a system that is reeling from decades of irresponsible state budget cuts. Surprisingly, the California state auditor takes a very dim view of this important source of revenue for UC.

In what can only be characterized as a selective, misleading and inflammatory report released on March 29, the state auditor calls for putting the brakes on out-of-state investment from nonresident students. Ironically, the auditor also recommends giving the same Legislature that has been responsible for cutting UC funding over the past 30 years more power to control UC admissions and fiscal decisions. But rather than further handcuff UC, California should be looking for ways to stabilize state funding for the university.

The central thrust of the one-sided report, which was the focus of an April 6 hearing of the Joint Legislative Audit Committee, is that nonresident admissions are putting California students at a disadvantage. Not only is this assertion wrong, but it feeds into a polarizing us-versus-them narrative that ignores the realities of globalization.

A major flaw of the report is its failure to address or even substantively acknowledge key context. Since the late 1990s, the state has cut its support for UC and the millions of students the system serves by 30 percent, or more than $1.2 billion. This loss of state funding has forced UC to make a series of dramatic tuition hikes and increase out-of-state student admissions. Non-resident students pay $38,108 in tuition and fees compared to $13,400 for California residents. The nonresident fees generate the equivalent of the annual budget of UC Riverside.

This funding is crucial to keeping the system open and accessible to California students. Without it, UC would either have to reduce in-state student enrollment by thousands, further raise tuition for in-state students by 30 percent, cut student financial aid, furlough 75 percent of all non-academic educational staff or do some unattractive combination of these.

California State University Chancellor Tim White recently lamented that CSU didn’t have the option to admit more out-of-state students and turned away about 30,000 qualified in-state students due to lack of funding, severely damaging the future for California kids who need the opportunity the most.
Allowing that to happen at UC would undoubtedly lead to a degrading of this world-class institution, something Californians won’t stand for. A poll of California voters that the Bay Area Council conducted in the fall found that 71 percent think UC is doing a great job of providing high-quality education. The poll also found Californians understand the connection between stable funding for UC and student enrollment, with 63 percent of voters saying they would support a ballot measure providing a Constitutional guarantee for stabilizing state funding for UC, along with assurances on enrollment, course availability and limits on tuition increases.

The challenge to the state’s higher education system is not admissions of highly qualified out-of-state students. The challenge is unstable and declining public funding that is not aligned to encourage access and degree completion. At a time when jobs in California require a college degree, the Legislature should be debating the right way to fund the 1 million-degree shortage of graduates necessary over the next decade, not having to digest a poorly researched diatribe blaming UC leadership for working to keep UC the crown jewel of California higher education.

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