In our prior review of the governor's January budget proposal, we noted that UC is slated for a nominal cut when so-called "ongoing" and "one-time" funding allocations are combined. As it happens, the Legislative Analyst's Office (LAO) provides an illustration of the misleading nature of this division. LAO has prepared a review of the condition of the capital stock at UC and CSU.* It notes that both systems have a considerable backlog of deferred maintenance, which shows up in the physical condition of the various structures on campuses.
The table below from the report shows the "one-time" allocations that the governor and legislature have made available to UC and CSU for dealing with the backlog of deferred maintenance. The amount from year to year varies considerably. Yet buildings depreciate at a regular rate. Maintenance is thus an ongoing expense. It is being characterized as one-time only because maintenance is treated erratically in the budget. Calling random payments for deferred maintenance one-time is an accounting fiction. The actual cost is ongoing. Buildings deteriorate and the true cost of operating the university increases to reflect that deterioration whether or not the legislature chooses to allocate funds. In fact, deferring maintenance can in some cases accelerate the pace of deterioration and ultimately make repair more expensive than it would be if it was done on a regular basis. UC can choose to undertake maintenance even if the legislature doesn't explicitly fund it. But when UC does so, it uses ongoing funds that would otherwise be used for something else.
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| Click on table to clarify. |
Of course, there are some expenses of the university that are truly one-time if they are for projects undertaken once and then completed. But in practice, the supposedly sharp line drawn between one-time and ongoing is actually fuzzy. Ultimately, a dollar is a dollar, whatever it is called.
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