Submission: Reform on state level can increase funding for UC

The 2012 election did result in a Democratic supermajority in the state legislature, but lawmakers, students and officials at the University of California and California State University systems must consider the business and employment climate in California when considering solutions to the funding situation for the university systems.

To increase funding to its public university systems, the state has three options. It can increase taxes, cut spending in other areas or obtain more revenue from economic growth.

Before demanding more funding for the university systems, lawmakers and student advocates should first identify waste, inefficiency and unnecessary costs within our university system.

For example, the campuses can avoid hiring more high-paid executives, like the vice chancellor for equity, diversity and inclusion at UC San Diego, who will earn a $250,000 salary.

Hiring new administrators in general is also a cost problem that is not exclusive to this instance.

From 1991 to 2012, the number of UC management positions had increased by 252 percent compared to a 51 percent increase in total employees.

Construction of new buildings can also be limited. As a result of construction, California public higher education currently pays $1.1 billion a year in construction bond interest.

New building projects should be examined and postponed if the state is facing an economic downturn.

If more funding is needed beyond this, the only wise way to increase funding is by growing the economy and re-evaluating the state’s spending choices as a whole. The option of increasing taxes remains an unwise choice because it harms California’s businesses and economic growth.

California has an unhealthy business climate, but the state insists on increasing taxes to raise greater revenue.

Raising taxes, however, drives out businesses and thus drives out taxable income. Between 2000 and 2010, our state has lost 380,000 net tax returns to other states, which amounts to approximately $30 billion in revenue.

In the realm of unemployment, California’s rate is the second-highest, at 9.8 percent.

There are reasons that businesses and individuals are leaving California.

With the passage of Proposition 30, California has further secured its position as the state with the highest sales tax, with a statewide rate of 7.5 percent.

Additionally, California in 2013 has the highest marginal effective tax rate on wage income.

Finally, the state taxes gasoline at the second-highest rate in the nation and corporations at the highest rate in the western half of the United States.

Given these statistics, it is no wonder that transferring a business to another state can save up to 40 percent in costs.

If businesses return to California, additional revenue from tax returns could supplement the state budget – and in turn the university systems.

Should more revenue for higher education be needed, officials could consider cutting costs elsewhere in the state government.

Steps toward streamlining government have occurred, but these steps are just a start and must continue.

Modest reforms to the pension systems, worker compensation and other programs under Gov. Jerry Brown are to be commended, but they should be seen as beginnings, not ends.

One large cost is the current development of high-speed rail.

Projected costs on the project have skyrocketed to up to $100 billion, despite previous estimates of $69 billion. This underestimation of costs, and likely overestimation of riders, makes the case against the rail project strong.

Funding our university is important, and education is necessary to build a workforce prepared to create real progress and wealth for our state and our nation. But legislators and student advocates need to remember the balance.

We attend college for many reasons, one of which is to prepare ourselves for our working lives.

As more businesses leave, it will be harder to obtain a job within the private sector in the state of California.

There are many other ways to reduce or stabilize the costs on students and on the university, and these include but are not limited to reducing unnecessary programs, refraining from hiring new executives and relocating state funds to higher education.

As a state, we can reduce costs and also raise revenue by reforming our tax laws to make California a more attractive place for innovation. Perhaps, with a mix of these options, we can rebuild California together.

Kohlhepp is a first-year political science and economics student.