LAO on higher ed funding

The Legislative Analyst's Office (LAO) has issued a new report on higher ed funding (UC, CSU, community colleges). As in previous reports, the LAO continues to fret about whether UC is admitting more than the top 12.5% of high school students, as per the old Master Plan of 1960. It also doesn't like the tendency for funding to be detached from actual enrollment.

LAO notes that faculty pay is below the comparison-8 because it is below the private universities in that grouping. But pay is above the public universities. After pointing to this (now longstanding) situation, LAO seems to draw no conclusion.

Below is an executive summary of its findings on UC:

UC’s budget is affected by certain key cost drivers—most notably employee compensation, enrollment growth, its academic quality initiatives, and facility projects. The Legislature likely will want to consider supporting certain faculty and staff compensation increases in 2018‑19. We note, however, that UC faculty salaries remain very competitive relative to other public universities that conduct intensive research. Regarding enrollment growth, we believe UC’s funding redirection plan to support 1,500 additional students in 2018‑19 generally is consistent with legislative intent. We recommend enrollment decisions for 2019‑20 be made within the context of any broader discussion on UC eligibility. We recommend the Legislature consider additional funding for UC’s academic quality initiatives as lower priority. Though UC’s student‑to‑faculty ratio has increased the past several years, its student outcomes have continued to improve. Finally, several of UC’s proposed capital outlay projects lack sufficient justification. For example, four projects entail relatively large, expensive expansions despite UC providing no systemwide analysis of existing unused capacity. Whatever cost increases it ultimately supports for UC, we encourage the Legislature to think about how to share those costs between the state and nonfinancially needy students. (The state covers tuition for financially needy students.)

And below are LAO's recommendations:

University of California

• Determine which University of California (UC) cost increases to support in 2018‑19 and consider sharing these cost increases between the state, nonfinancially needy California students, nonresident students, and other savings and fund sources.
• Use UC’s planned programmatic reductions and redirections as a starting point to fund enrollment growth in 2018‑19.
• Make enrollment growth decisions for 2019‑20 consistent with any broader decision regarding UC eligibility pools.
• If UC is unable to attain a 2‑to‑1 transfer ratio at each campus, consider establishing a systemwide ratio to give UC more flexibility to meet the target while still ensuring transfer access. Also encourage UC to pursue efforts to simplify the transfer process and accelerate time to degree for entering transfer students.
• Signal to UC that funding for its academic quality initiatives is a lower priority for 2018‑19. Were the Legislature interested in providing additional funds for more targeted purposes, specify the use of the funding in the budget act.
• After making decisions regarding eligibility, direct UC to develop a systemwide enrollment plan that includes (1) enrollment projections based on anticipated demographic changes and eligibility criteria, (2) strategies to maximize the use of existing facilities across the system before adding new space, and (3) clear justification for the need to add space within the system.
• Direct UC to report on construction costs per square foot and explain any variation in these costs for the same type of space across campuses. To the extent UC is unable to provide sufficient justification for the differences contained in its four 2018‑19 proposals for new academic buildings, we recommend the state withhold authorization of those projects.
• Require UC to develop a long‑term plan to (1) retire its maintenance backlog and (2) improve its ongoing maintenance practices moving forward to prevent a backlog from reemerging.
• Direct UC to report in spring hearings on its current efforts to reduce pressure for new physical library storage space and expand its digital collections.

The full publication is at:
http://www.lao.ca.gov/Publications/Report/3748

Much of what is to be found in the recommendations is micro-management. Now you can argue that the Regents, or UCOP, or someone, needs to do it. I think, however, that you would have a hard time arguing that the legislature (120 members) attempting to do it is feasible. An interesting question (not asked) is whether other top universities do it better.