Boulware at the Regents?

Lemuel Ricketts Boulware

Today is May Day - often viewed as a labor holiday.  That happenstance brings to mind the role the governor has been playing as an ex officio regent.

Governor Brown likes to show his scope of knowledge through quotations, Latin phrases, and historical references.  Earlier this year, when asked about his collective bargaining policy with state unions, he referred to "Boulwarism" as something that he wouldn't want to do.

So what is Boulwarism?  Lemuel Ricketts Boulware was General Electric's chief bargainer with its unions in the 1950s and early 1960s.  He developed a take-it-or-leave-it style of negotiating, basically putting forward the firm's position, indicating that the position was based on what the firm had determined was correct, and not moving.

Governor Brown has yet to eschew Boulwarism, however, when it comes to higher ed and more specifically the UC budget.  His January budget, for example, proposed $10 million earmarked for online education.  Although the May revise has yet to appear, the usual leaking process indicates that it will have various targets on which funds will be contingent.

The problem with this approach is that - even apart from the merits of the particular targets - it is piecemeal.  As we have pointed out frequently on this blog, in recent years, roughly one out of ten dollars in the UC budget comes from the state.  That tenth is more or less matched by tuition.  So eight of ten dollars represents activities other than core teaching and degree production. All of that "other" activity is left out of the equation even though it is linked in complicated ways to the core. 

As we have pointed out, the old Master Plan of 1960, ultimately proctored into law by the governor's dad, provides a better model for developing state higher ed policy and, more particularly, the fiscal relationship between the state and UC.  Both the governor and the legislature see only a small piece of the larger world of higher ed, especially at UC where so much activity is not state-funded.  A process such as that which produced the Master Plan is what is needed now.  If the governor follows his current practice, he is likely to attend the Regents meeting in mid-May.  Will any Regents point out the need for a larger and systematic review?  Or will we continue to focus on the fad of the moment at budget time?

Here is the governor on Boulwarism:

NASBO

Are you against efficiency?  Of course not!  Do you think goals should be achieved? Of course you do! Do you think higher ed could be improved if it became more efficient and achieved its goals? So far, you totally agree.

The National Assn. of State Budget Officers (NASBO) has issued a report on public higher ed, a system which nationally, as well as in California, is under budgetary strain. I don't know for sure how much circulation the report got pre-publication. I suspect, however, it reflects the general scuttlebutt among budgetary types that evolved in the aftermath of the Great Recession. You see similar ideas coming from the Legislative Analyst here in California, for example.

But there is a problem with the report once you get beyond the motherhood-and-apple-pie stuff. There is lots of Good Government lingo - performance metrics, etc. But when you take all of higher ed together - from community colleges to research universities everywhere in the U.S. - the one common element is that all institutions have students who (hopefully) get degrees. So the metrics end up focusing on dollars/student, degree completion rates, etc.

For high-quality research universities, however, more goes on than degree production.  At UC, roughly one dollar out of ten in the budget is coming from the state.  That dollar is roughly matched by tuition (some of which is paid by out-of-state students). So what happens to the activities that are reflected in the other eight dollars if you focus only on the state dollars/degree type "metric"?  At UCLA, we could run the place as Cal State Westwood or Westwood Community College and undoubtedly improve the dollars/student metric. Is that what the state wants?  Does the state know what it wants? 

The report also tends to have a silo approach, isolating "cost drivers" without looking at interrelationships. That tendency is notable when it comes to compensation.  Benefits are rising in cost relative to cash pay, the report notes. So cut benefits! But wait.  If you cut benefits wouldn't you have to raise other pay? Or can you just cut total compensation (cash pay + benefits) without any consequences?

Similarly, the report suggests that undergrads' tuition cross-subsidizes grad students. Let's assume that is true.  If you cut undergrad tuition to marginal cost, what happens to grad student education?  Can you have a research university without subsidized grad students?  That is the kind of question the silo approach can't address.

As this blog has noted many times, there are indeed issues about cost and efficiency at UC.  We have pointed out the problem with the limited ability of the regents to review and evaluate capital projects.  There are really big bucks involved there, but not the dollars that get directly into dollars/student metrics.

What needs to happen is not magical thinking about "delivery systems" (a.k.a. online higher ed) and metrics but for something like the old 1960 Master Plan review.  At that time, UC president Clark Kerr directed that review and presented the Plan to the then-governor, Jerry Brown's dad.  We are about to bring in a new UC president. Whoever is ultimately selected should be someone capable of doing what Kerr did including persuading the governor that a new Master Plan is what is needed. That's the metric the regents in making the selection should be using.

The NASBO report is at http://www.nasbo.org/sites/default/files/pdf/Improving%20Postsecondary%20Education%20Through%20the%20Budget%20Process-Challenges%20and%20Opportunities.pdf

Grading the LAO Report on Higher Ed

We summarized the Legislative Analyst's report on higher ed funding in a post yesterday and provided a link to the document.  One thing that faculty do is evaluate and give grades.  In this case, the grade for the report would have to be an "incomplete."

Pensions: The LAO continues its assertion that the state has no legal liability for the UC pension.  It wants the legislature to say so.  The legislature can say the Moon is made of green cheese if it wants.  But the Moon will be what it is.  The question of state liability is a legal matter and no legal analysis is provided.  It is a legal matter that extends beyond the state into the federal constitution.  If the LAO wants to be serious about this issue, it could start with the history of the UC pension written by the UCLA Faculty Association's Executive Director, Susan Gallick, and then get some outside legal advice from constitutional experts.  As the governor and the legislature continue to discover about the state prisons, it is the courts that ultimately decide issues of constitutionality, regardless of state pronouncements.

What is odd is that after its assertion of no liability, the LAO goes on to say that someone is going to have to fund the pension and says the legislature should do so.  It suggests that the UC pension should be compared to the recent state pension enactment for other public pensions and then the legislature should pay in some sense what the others get.  UC's pension was omitted from the pension bill because the legislature and governor were persuaded that the pension changes enacted by the Regents in 2010 approximated what was later proposed for other public pensions.  What the cost implications are will vary from plan to plan, even with the same provisions.

Costs.  In loose terms, UC and CSU get comparable amounts from the state.  But UC has fewer students so the dollars/student ratio is going to be higher - which is what you expect in a research university.  There is little analysis in the report of what California gains by having a research university.  There is no analysis of what other states such as Michigan and Virginia have done once they concluded that they couldn't afford, or didn't want to afford, a research university. 

Pay for Performance.  As personnel directors can tell you, this is a slogan - maybe even a concept - but specifics are needed as to how you do it.  Is this year's budget going to be based on a formula?  Transfers - dropouts + course loads + completion in Y years = X?  What?  Personnel directors can also tell you that you can get perverse results.  Quantity over quality is a prime example, but only one.

Capital Costs.  There is concern in the report about the handling of capital costs but the concern seems to be confined to state-paid capital costs.  At UC, as we have noted repeatedly on this blog, the Regents - members of a part-time unpaid board - are routinely asked to approve large and expensive capital projects which are said to be paid for from future revenues.  But the Regents have no independent capability to review such projects or to follow up on whether the promised revenues actually materialized.  If the revenues prove inadequate, like the pension, somehow the deficiency will be paid; the campuses don't default.  The issue of Regental oversight and governance needed to be discussed regarding all capital projects, not just state-paid.

==
The rule at UCLA is that if you get an incomplete, you have one quarter to finish the work or the grade goes from incomplete to F.  There is an out from that rule in this case, however.  LAO can join us in what we have recommended in prior posts.  It is clear that we have arrived at a point in California where a new Master Plan needs to be developed to deal with the issues above and others.  To get there, we need to set up a review of the three segments - a process in other words rather than off-the-cuff "solutions" from the governor, the LAO, or anyone else.  The annual budget cycle doesn't work when a fundamental review is needed.  It was done before under Pat Brown and it can be done again.
==
Of course, we'll have to wait.  A process takes awhile to complete.  But in the meantime, we have just the selection to go with an incomplete report:

The Moral: It's a Good Idea to Avoid the Rush

From Inside Higher Ed today...

Maybe it was inevitable that one of the new massive open online courses would crash. After all, MOOCs are being launched with considerable speed, not to mention hype. But MOOC advocates might have preferred the collapse of a course other than the one that was suspended this weekend, one week into instruction: "Fundamentals of Online Education: Planning and Application."

Technology and design problems are largely to blame for the course's problems. And many students are angry that a course about online education -- let alone one offered by the Georgia Institute of Technology -- wouldn't have figured out the tech issues in advance, or been able to respond quickly once they became evident... 

Full story at http://www.insidehighered.com/news/2013/02/04/coursera-forced-call-mooc-amid-complaints-about-course

The true moral of this tale is not that online education can't "work" but that seeing it as a magical device that will solve the squeeze between limited state funding and gubernatorial decrees about no tuition increases is just plain silly.  The governor needs to do what his dad did, i.e., set an orderly process in motion to develop a new Master Plan.  This process cannot simply consist of the governor sitting in at meetings of the Regents and the boards of the other two segments and making erudite statements.  Rather than doing research on why the governor is technically president of the Regents - which Gov. Brown said he is undertaking - why not do research on how the original Master Plan was created?

Here is an online start for such research:

Part 1:

Part 2:

Peter Schrag on Yudof Retirement

Peter Schrag, a former columnist for the Sacramento Bee, wrote an op ed about President Yudof's retirement.  Excerpt:

...All told, the UC is in far better shape now than when he came. But it's unlikely that it can ever again exercise the kind of influence, both in this country and abroad, that it did in its glory days under Clark Kerr in the 1950s and 1960s. It was an era when new UC campuses and new programs were created one after another, when students paid low "fees" and not tuition, and when California adopted a master plan that promised every Californian who could benefit from it a place somewhere in its three-tiered higher education system. UC was that rarest of rare institution, a tax-supported world-class research university that was elitist and democratic at the same time.

Ever since he came, Yudof promised to resist privatization, but privatization has come in any number of ways: in spiking tuition; in recruiting and admissions policies increasing the percentage of foreign and out-of-state students and the high tuition they pay; in the pursuit of industry contracts. UC is still the nation's premier public university. But in its attempt to keep pace with Harvard and Stanford, it's becoming more like Michigan and the University of Virginia, nominally public universities that started down the road to privatization even before UC did.

Yudof had been thinking about retirement well before he made his announcement last week. But it's hard to imagine that Gov. Jerry Brown's muscle flexing at recent meetings of the regents – even his pointed reminder that he is the legally designated board president – did anything to encourage Yudof to stay...

Full op ed at
http://www.sacbee.com/2013/01/25/5139675/uc-president-had-unheralded-victories.html

Bottom line: We'll miss him when he's gone:

Read more here: http://www.sacbee.com/2013/01/25/5139675/uc-president-had-unheralded-victories.html#storylink=cpy

Gov. Jerry Brown on Executive Pay at the University of California & Many Other Topics

At the University of California (UC) Regents meeting of Jan. 17, 2013, Regent Leslie Tang Schilling asked Gov. Brown not to protest about UC executive pay.  The state portion of executive pay can be capped, she seemed to agree, but the Regents should then be free to raise private donations for increments of pay above the state portion.  She argues that UC will need high-quality leadership and must be free to compete for talent.  She expresses skepticism about psychic income.

Brown responds at length with a learned discourse ranging from his one-time vow of Jesuit poverty to the history of higher education in California and more generally.  He resists the idea that he opposes high pay for “political” reasons.  He is uncertain about what terms such as “quality” mean in the context of research.  He questions rankings of educational institutions.  Brown also talks about his support for high-speed rail, the need for water infrastructure to avoid floods, and global warming.  Income inequality is a concern for the governor and California is big enough, he thinks, to resist that trend rather than endorse it.  Brown says we don’t really know where online higher education will lead but that we should go for it (anyway).  On the other hand, he is skeptical about the need for a new medical school at UC-Riverside.  He cites the two-decade holiday of contributions to the UC pension fund as showing that even smart people can make bad decisions.

As prior posts have noted, the problem with the governor's approach is that - while entertaining - it doesn't lead to more than regental seeming agreement.  No one wants to offend the governor.  The main challenger to the online education pushed by the governor is from a student regent.  But no process is being set in motion that would lead to something like a new Master Plan to deal with the challenges and issues about which the governor is concerned.  

You can hear Schilling and then Brown’s response below:

Why the Resignation?

They don't seem to be looking in the same direction.

President Yudof resigned shortly after last week's Regents meeting.  Undoubtedly, the resignation was planned earlier so nothing that specifically happened at the meeting could have been the triggering event.  The official press release mentioned health, family, etc., obliquely.

While the Regents meeting was not the trigger, I would guess that what happened at the meeting was no surprise and could have been anticipated by anyone who heard or attended prior meetings.  The governor wants to take a bigger role than have prior governors.  That's fine by itself, but the question is how should that role be played out.  There can't be two presidents of UC.  (We noted in an earlier blog that the governor at one point at an earlier meeting said he was the President of UC, although he is President of the Board of Regents.)  But there seemed to be little push-back from the Regents about the governor's intentions.  If I were Yudof in that circumstance, I would quit, too.

A key role of the Regents is providing a degree of insulation from state politics for UC.  Obviously, that insulation can never be total.  Indeed, the fact that the Regents include key political leaders as ex officio members suggests the ambiguity.  Nonetheless, issues such as online education, while sexy and of obvious interest to the governor, are ultimately getting close to crossing the fine line of micro-management.  There need to be improvements in UC management, to be sure, but micro-managing is not one of them.

If there is to be a new relationship between UC and the state, it cannot be developed by the governor, or the president of UC, or even the Regents in some unilateral fashion.  As we noted in a prior post, the only way it can be done is a process something like the one that produced the Master Plan originally.  It may be that we need a restructuring of the way in which UC is managed and the way the Regents are structured.  And let's keep in mind that the state is putting in only about $1 dollar in $10 of the UC budget.  Students are putting in a roughly similar amount.  So there is a big institution to be considered, much of which is outside the purview of state attention.

The Yudof resignation announcement says "UC remains the premier public university system in the world..."  Note that the qualifier - premier PUBLIC university - has crept into the description in recent years.  And yet the official comparison-8 universities on which UC is supposedly benchmarked are half public and half private.  The governor's statement that UC wants 11.6% as a state budget increase but will only get 5% - which he implies is a long-term indicator of budgetary reality - suggests the obvious.  The state can't afford the old UC/Master Plan model.  So a new model is needed and, at the moment, we can't get there from here.

The Yudof resignation announcement is at:
http://www.universityofcalifornia.edu/news/article/28955

An article about the resignation in Inside Higher Ed today can be found at:
http://www.insidehighered.com/news/2013/01/21/yudof-retire-president-u-california

UPDATE: The LA Times today carries a story about how the governor wants to reshape the community colleges.  Again, this is Master Plan stuff.  The original Master Plan was intended to coordinate the three segments of higher ed: UC, what is now CSU, and the community colleges.  The article is at:
http://www.latimes.com/news/local/la-me-adv-college-budget-20130121,0,904916.story

UPDATE: Columnist Joe Mathews wonders whether the governor should be running UC, CSU, and the community colleges and thinks it is a bit much:
http://www.foxandhoundsdaily.com/2013/01/chancellor-brown/