Raiding the Bank

California's University of ATM

Joe Mathews, PropZero (KNBC), 7-19-11

California's public university systems aren't cash machines. But the state is treating them as such. Consider what's happened just this year to the University of California and the California State University systems. In March, the legislature and governor took $500 million from each system to balance the budget. Then in June's budget agreement, the state took another $150 million each.

But the withdrawals from this strange ATM doesn't stop there.

The budget includes provisions that could trigger another $100 million each in cuts in the likely event that tax revenues don't keep up with the fantasy-based projections in the budget agreement.

To add injury to greater injury, budget-related legislation authorizes borrowing $1.7 billion from the universities.

That's sort of like stealing from your neighbor, then asking for a loan from the same guy.

Of course, it's hard to blame the legislature and governor for this.

The universities are an easy target in the California budget system -- because voters have erected budget protection for so many other budget pieces. The voters have chosen to turn their universities into a giant cash machine.

Here's what is beyond the pale: politicians who blast tuition increases at the universities.

When you keep taking money out of your account, you can hardly blame the bank for trying to raise more capital.

From http://www.nbclosangeles.com/blogs/prop-zero/Is-the-University-of-California-a-Bank-125761593.html