Monday, May 20

State analyst office recommends stricter funding regulation for UC

The state’s analyst office said the state needs to be more strict when regulating how the University of California spends its funds, according to two reports released this week.

In recent years, the state has been giving blanket funds to the UC without detailing how the money should be spent.
The Legislative Analyst’s Office, a nonpartisan state agency that provides policy analysis to the state legislature, said in two reports this week that this practice lacks transparency and diminishes legislative oversight over the University’s policies.

The state legislature requested that the office conduct this study because the state has significantly deviated from its traditional approach in funding the UC and California State University system over the past five years.

Instead of doling out funding through a traditional approach based on inflation or enrollment, the state has instead been giving the UC each year a “seemingly arbitrary amount,” according to the report.

“(Gov. Jerry Brown) doesn’t explain how he came up with the (budget) number,” said Paul Golaszewski, an analyst for the office. “(The) legislature should have (a) more rational way of funding state agencies than what the governor has proposed.”

The office recommended the legislature reject Brown’s budget proposal for the next fiscal year, in which the UC would receive a $142 million increase. Instead, it said the UC should receive a $186 million increase in its budget to compensate for inflation and support its growing mandatory costs, such as pension. It also said the UC should raise $78 million of the $186 million increase by raising tuition.

The office also said the UC should increase tuition by 2.5 percent for the 2014-2015 school year because it believes tuition freezes are financially unsustainable. The suggestion is contrary to the UC’s and the state’s stances on tuition reform.

The report said tuition hikes and tying tuition to a share of educational costs are necessary to reduce the volatility of tuition. If the UC bypasses a tuition hike this year, tuition will have to rise even higher in the future, the report said.

“Part of our approach is having students share responsibility for cost increases,” Golaszewski said.

Brooke Converse, UC spokeswoman, said UC President Janet Napolitano is already working with a committee to look at a new long-term tuition policy. However, the UC is against raising tuition for next year, she said.

“We need to come up with some plan moving forward that is predictable for students and families,” Converse said. “We want students to know, moving ahead, what their tuition is like in advance.”

Additionally, the report called for the state to tie funding to enrollment and performance measures, such as graduation rates, to keep the University accountable.

The report said tying enrollment to state funding would incentivize the UC to enroll more in-state students who are eligible under the California’s Master Plan for Higher Education, created in 1960 to ensure all students can attend some form of higher education. The state should periodically examine in a formal study whether the UC is providing access to enough students with its funding, the report suggested.

Patrick Lenz, UC’s vice president for budget and capital resources, said an enrollment target for the UC is often unnecessary because the UC already meets the guideline set by the Master Plan, although he welcomes the office’s call for the updated eligibility study.

The report also said the universities should have different enrollment targets for different groups of students, categorized by their major or their demographics, to ensure access for different groups of students and to meet the state’s workforce needs.

Lenz said addressing workforce needs may require more funding from the state, saying some programs require a high amount of funding for accreditation.

“States can’t complain that the UC is not being aggressive if they are not ponying up sustainable funding in hiring more faculty, offering more sections and providing more student support,” Lenz said.

The state legislature is already requiring the universities to report on the cost of education by student level and discipline starting this October.

The Legislative Analyst’s Office said the state should give the UC more spending requirements to follow.
The state gave just a few mandates to the UC in its last budget, including that the UC must spend $10 million to create cross-campus online courses. Furthermore, the report said the universities should present their performance at the state’s budget hearing each spring to inform the legislature.

While the state has already began to examine measures such as graduation rates since last year, the office said it’s not clear how those measures are actually affecting the state’s budget decisions.

Brown will release a revised version of his budget in May, and legislators have until June 15 to pass a state budget.

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