Bill calls for UC financial reform

A new state Senate bill, which takes aim at the University of
California’s compensation practices, calls for limits on the
UC’s fiscal independence if the university fails to undertake
certain reforms.

In response to allegations that the UC doled out millions of
dollars in unreported compensation, Sen. Jeff Denham, R-Merced,
introduced SB 1117 last week to potentially compel the university
to reform some of its compensation policies.

The bill’s two proposals would require the UC Board of
Regents to discuss salaries and benefits in open rather than closed
sessions, and would make the regents report to the Legislature any
compensation given to UC management executives.

If the UC does not adopt these two proposals, the bill calls for
the Legislature to amend the California Constitution, requiring
legislative approval of the UC’s operating budget. Any
changes to the state constitution must be approved by voters.

Currently, the UC’s budget does not need approval from the
state. Denham’s bill can be acted on by the Legislature after
Feb. 4.

“I have a fundamental belief that the UC system should
retain its autonomy, that politics should not play into
academia,” Denham said. “But if they are not willing to
have a transparent system, then I think this is the only road we
can take.”

Denham is putting the bill on hold until the board responds to
his proposals. He has contacted Board of Regents chairman Gerald
Parsky and notified him that if the two changes are made, the bill
will not be pursued.

But if the UC fails to adopt these two steps, the bill may be
assigned to the Senate Education Committee.

If it moves forward, the bill would ask the voters to mandate
that the UC reveal its budget to the Budget Committee on Higher
Education. The committee would then review the budget and ask the
UC to justify spending on compensations for executives if students
fees continued to increase, Denham said.

“I appreciate the reason the UC system currently has an
autonomous situation unlike other state agencies,” Denham
said in a statement. “However, when abuses such as those that
have come to light in the last few months appear to be systemic
rather than isolated, then we must act to protect the
taxpayers.”

Some UC leaders responded critically to Denham’s
proposal.

UCLA Academic Senate chairwoman Adrienne Lavine said the outcry
over the UC’s compensation policies has been carried too
far.

“I do believe that the UC has to make a very clear and
comprehensive examination of its own practices, but the alleged
abuses have been blown out of proportion,” she said.

Student Regent Adam Rosenthal said he disapproves of
Denham’s proposal to limit UC independence.

“It is absolutely ridiculous threatening a constitutional
amendment to take away autonomy of (the) UC,” he said.

The compensation issue was brought to the forefront last
November, when a San Francisco Chronicle article alleged that the
university paid UC employees millions more than had been included
in a consulting firm’s report of UC salaries last September.
The article said the UC gave an unreported $871 million in various
bonuses last year, approximately $599 million of which went to
about 8,500 employees.

The Chronicle story was followed by concerns from some state
leaders and interest groups over the compensation in light of
continual student fee increases over the past several years.

UC President Robert Dynes announced last December the formation
of a regental task force to look into making the UC’s
compensation practices more transparent. That group will present a
preliminary report at this month’s regents meeting at UC San
Diego.

Lavine said Denham’s proposal was premature.

“Senator Denham is assuming UC practices are
“˜abuses’ within the UC system,” she said.
“There is no reason for the senator to have this bill
approved before investigations are over.”

But UC Students Association Organizing Director Ruth
Obel-Jorgensen supports the bill because she said it would create a
needed checks-and-balances system of UC practices, helping to keep
student interests a top priority.