Get It While You can

The state controller's cash report is out for the first seven months of fiscal 2025-26 and - guess what? - revenues are running ahead of the forecast made at the time the current state budget was passed to the tune of $15 billion. Indeed, revenues are running ahead of the updated forecast made last month when the governor made his budget proposal for next year to the tune of $6.9 billion.

Now, we all know that much of this overage seems to be fueled by AI spending, which filters into tax revenues by way of the stock market and capital gains. And we all know that it could be a bubble and that - if it is - revenues will slump when it bursts, i.e., we could have a repeat of the dot-com boom/dot-com bust. If that happens, revenues will drop and a crisis will occur. 

We know, in addition, that the Legislative Analyst's Office keeps warning of a "structural" budget problem in the years to come. And blog readers will know that even with the governor's optimistic forecast for the economy, we are currently running a deficit (total reserves of the general fund are being drawn down).* We know from the dot-com boom/bust episode that if the state is not socking away a lot of cash at the peak of the cycle, a downturn will be especially painful.

With all of that knowledge, however, it is unlikely that the legislature is going to accept austerity now when it sees extra revenue coming in. And the governor, who is running for president and is termed out, seems unlikely to want to play Dr. No. If he can just make it to next January without a fiscal mess developing, he can say it didn't happen on his watch, and leave whatever problems that follow to his successor. 

So, the best advice yours truly can give to UC lobbyists is "Get It While You Can" - because every other interest group will be seeing what I see.

Or direct to https://www.youtube.com/watch?v=mtj9w2gYzV4.

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*https://uclafacultyassociation.blogspot.com/2026/01/the-no-hassles-while-im-in-office-state.html.

Straws in the Wind - Part 255

From the Daily Pennsylvanian: Last October, the notorious cybercrime group ShinyHunters infiltrated Penn’s internal data system and demanded a $1 million ransom from the University to prevent the release of the files on the dark web. After the ransom went unpaid, the hackers surfaced online to take credit for the attack and set the record straight. Since 2019, ShinyHunters has gained notoriety in the hacking community for orchestrating large-scale attacks on major corporations such as Google, AT&T Wireless, Ticketmaster, and SoundCloud. This fall, the group set its sights on Penn. “We decided to hit Penn same-day,” a spokesperson for the group said via Signal, an encrypted messaging app. “Some planning and preparation goes into attacking a new organisation, but we can move pretty quickly.” 

Requests for comment were left with a University spokesperson... ShinyHunters released the cache of confidential University files — including dated records and donor contact information — on its website on Feb. 4...

Full story at https://www.thedp.com/article/2026/02/penn-hack-donor-data-ransom-one-million-shinyhunters-gse-emai.

Will Harvard Continue to Lead the Charge? - Part 122

From the Harvard Crimson: More than half of Harvard’s varsity teams saw their average grade point averages drop in fall 2025, marking a sharp semester-to-semester downturn across sports programs amid the College’s push to rein in grade inflation. Among the 26 men’s and women’s teams reviewed by The Crimson — representing over half of Harvard’s 42 varsity programs — nearly all recorded GPA declines from spring 2025.

The downturn comes as Harvard tightens grading standards. In an October report, Dean of Undergraduate Education Amanda Claybaugh described grade inflation as a threat to the College’s academic mission. Faculty reduced the share of As awarded from 60.2 percent in the spring to 53.4 percent in the fall — a shift that came alongside declines in team GPAs across the athletics department.

...The ongoing debate at the College and FAS over how to curb grade inflation could further shape team GPAs in the semesters ahead. A faculty committee proposal released last week would limit A-range grades to 20 percent in each course, with room for four additional As per class, starting next academic year. The proposal will be reviewed by the Faculty Council and is expected to come before the full faculty later this semester. Students have signalled widespread resistance to the proposal. In a Harvard Undergraduate Association survey this week that drew responses from almost 800 students, nearly 85 percent said they opposed the proposed cap on A grades.

Full story at https://www.thecrimson.com/article/2026/2/12/team-gpa-trends/.

(Tuition) Strike News

From the Daily Cal: Graduate student organizers in the UC Berkeley School of Social Welfare began a tuition strike Jan. 19 in response to “grave concerns” about recent layoffs of two union-protected lecturers in the program. The lecturers... were named in a letter that students sent to leadership at Berkeley Social Welfare. Campus spokesperson Janet Gilmore said campus could not comment on confidential personnel matters.

In the letter, students said their tuition strike is also in protest of further grievances regarding department budget cuts and tuition increases. Students expressed that they felt there were “troubling patterns that have severely degraded the quality and integrity of our program”and announced that a collective tuition strike would “begin immediately.” The letter also details a list of demands, including the reversal of [the two] layoffs, restoration of practicum support, financial transparency and tuition freezes, reduction of required practicum hours and student representation in administrative decision-making...

Gilmore said campus would not speculate about the impacts of a tuition strike, but that campus policies around nonpayment would apply. According to the campus Student Billing website, if a student has unpaid fees of $100 or more over 60 days past due, Billing and Payment Services is authorized “to place a hold on a student’s registration and diploma until the financial obligation is satisfied.” ...

Full story at https://www.dailycal.org/news/campus/uc-berkeley-school-of-social-welfare-students-begin-tuition-strike-over-staff-layoffs/article_64dd6826-bc01-44d0-a9a0-cfdde90928c2.html.

Really?

As blog readers will know, former Chancellor Block left under a cloud thanks to the events of 2023-24. And now he is under an additional cloud of budgetary mismanagement, according to the CFO that he hired towards the end of his chancellorship. But it's not only Block. There remain members of his entourage still in charge.

There has been some walking back of the accusation as well.

From the Bruin: University administrators’ financial mismanagement contributed to UCLA’s $425 million annual deficit,* UCLA’s chief financial officer alleged. Stephen Agostini, who has been UCLA’s CFO since May 2024, alleged that the unaudited annual financial reports the university has posted on its website since 2002 are erroneous. UCLA has not posted the annual reports since the 2022-2023 fiscal year, coinciding with when Agostini became CFO. Agostini said the UC Office of the President asked him to stop posting the misleading reports... “I would prefer not to advertise how badly the place has been managed financially,” he said. 

Agostini did not respond to a request for comment on when he learned that the posted reports had incorrect information or which data points were incorrect. He also did not respond to a request for comment about which administrators were involved in the data’s posting.

“I want to clarify that my predecessors have been a welcome resource and providing background and suggestions and I have benefited substantially from their perspectives,” Agostini said in the emailed statement...

Full story at https://dailybruin.com/2026/02/13/financial-mismanagement-contributed-to-425-million-annual-deficit-ucla-cfo-says or https://dn720904.ca.archive.org/0/items/ucla-budget-book-v-final-feb-2026/UCLA%20Daily%20Bruin%20interview%20with%20CFO%20on%20budget%202-13-2026.pdf.

*Exactly what this figure of $425 million means is unclear. CFO Agostini has just released some new financial information on which we will comment later.

It's tiresome to repeat...

From LA Times, 2-10-2026

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It's tiresome to have to repeat that California needs a new Master Plan for Higher Education, or headlines such as the one above will keep repeating.

According to the LA Times article:

UC President Clark Kerr
hands Master Plan to Gov. Pat Brown in 1960

...In the latest stress point, CSU has objected to 16 community college degree proposals, contending that they run counter to state law provisions designed to protect its own university degree offerings. Community college officials disagree and say their programs are uniquely designed to serve the needs of their district, as intended by the law. The tensions have brought into focus the changing role of community colleges since the adoption of California’s 1960 Master Plan for Higher Education. The vaunted plan laid out three distinct public systems, with local community colleges primarily offering two-year associate’s degrees and serving as transfer launching pads to CSU and the University of California...

In an effort to bring accessible and lower-cost bachelor’s degree programs to more students, a 2021 Assembly bill allowed all 116 community colleges to offer bachelor’s degrees to address “unmet workforce needs” in the districts they serve. The law expanded a 2014-approved pilot program, that allowed the California Community College Chancellor’s Office to develop bachelor’s degrees on 15 campuses. But... UC and CSU officials can object to any proposed degree that is “duplicative” of their offerings. Once an objection is raised, the program must be modified or dropped by the California Community Colleges chancellor’s office until the sides reach an agreement...

Full story at https://www.latimes.com/california/story/2026-02-10/community-colleges-cost-bachelors-degrees-csu-says-no-to-some.

Straws in the Wind - Part 254

From the Daily Princetonian: Princeton’s music department announced a series of program reductions following the annual State of the University letter, which anticipated across-the-board fiscal tightening. Starting in August, the department will eliminate the position of Trenton Arts at Princeton Program Coordinator, international touring of ensembles, and Richardson Chamber Players under Princeton University Concerts. 

These cuts are part of a “multi-year process of ongoing and evolving reductions to our programmatic and operational expenses,” according to an email sent to department members on behalf of Daniel Trueman, chair of the music department. The University plans to tighten its belt due to changing expectations for its endowment returns, which fund about two-thirds of the total operating budget...

Full story at https://www.dailyprincetonian.com/article/2026/02/princeton-news-stlife-music-programs-cut-new-university-budget-reductions.