Buyer's Remorse

As the University of California grapples with massive budget reductions, the youngest institution in the 10-campus system is once again being forced to defend its very right to exist.

Furloughs, program cuts and layoffs now plague the system, and those draconian measures have many asking whether the university can afford to nurse along the Merced campus, which was born into controversy and still struggles to attract students.

August 10, 2009

As the University of California grapples with massive budget reductions, the youngest institution in the 10-campus system is once again being forced to defend its very right to exist.

Furloughs, program cuts and layoffs now plague the system, and those draconian measures have many asking whether the university can afford to nurse along the Merced campus, which was born into controversy and still struggles to attract students.

The idea of building another major research institution in California -- much less in the relatively isolated region of the Northern Central Valley where Merced stands -- was long resisted by many, including the leadership of the University of California. But as the political clout of the valley grew in the 1990s, the concept took hold in the Legislature and university officials got on board. That was a mistake that still haunts a now-beleaguered system, according to Andrew Scull, professor and chair of sociology at California’s San Diego campus.

“I think the university caved on the politics of [creating Merced], and thought if they didn’t agree to this their budget would be punished,” Scull says. “I think many people, even at the time that Merced was just a figment in some planner’s eye, were very, very concerned.”

By any objective measure, Merced has failed to meet initial enrollment targets and fallen short of the faculty recruitment goals it set in the years before opening. A 2002 planning document projected 4,414 students would be enrolled by 2008-9; when the year arrived, there were 1,700 fewer than that. By the same year, the university anticipated 285 faculty would have been hired; as it turned out there were just 202. Staff numbers were projected to be 1,112, and the university ended up employing a little more than half that number.

Those figures, however, presumed Merced would be open to students in 2004, not delayed until 2005 as it was amid an environmental lawsuit and other logistical problems. But even if the figures are adjusted to reflect a later opening, Merced’s 2008-9 enrollment still fell nearly 900 students below the target for the prior year.

Administrators argue that a lack of dormitory space scared off some students at first, depriving the campus of per-student dollars provided by the state and tuition money that was needed to deliver on promises made in the planning phase. Kevin Browne, assistant vice chancellor for enrollment management, says Merced has done well recruiting students with one early exception.

“For the last three years, we’ve been really dead on target,” he says. “It was that second year that keeps being resurrected in people’s minds.”

While the campus did open in 2005 with several hundred fewer students than projected, it's true that the low numbers in the second year contributed to Merced's ongoing difficulties in meeting enrollment going forward. Despite the campus's efforts, Merced has thus far been able to make up for what it lost in 2006. While Merced has revised its enrollment targets, the campus still consistently falls below its 2002 goals.

The UC president’s office has tried to shield Merced from the harsh cuts doled out across the rest of the system, but the deteriorating university budget doesn’t bode well for an institution where viability is so directly tied to major growth. Keith Alley, Merced’s executive vice chancellor and provost, acknowledges there’s a hard road ahead.

“I think we’re at a point now where a significant increase in the number of students would be difficult for us,” Alley says.

At a time of unprecedented budget cuts, the patience of those waiting for Merced to blossom is starting to wear thin. In a now-public letter, Scull and 22 other department chairs at San Diego suggested this summer that it might be time to close or significantly redefine the roles of the Merced, Santa Cruz and Riverside campuses.

While all three campuses were called out, the shot at Merced was tantamount to suggesting a bad idea should be killed in its crib. Merced, which opened to students in 2005, has graduated only one class. Riverside and Santa Cruz opened in 1954 and 1965, respectively, and while they are not regarded as the research workhorses of the system, they have more solidified positions within it.

The chairs' letter may have generated some discussion about the three campuses, but it appears to have done little else at this point. Mark Yudof, the system's president, was quick to say he opposed any changes.

"I am 100 percent behind Merced, Riverside and Santa Cruz, and do not see the call to reduce expenditures on those campuses, beyond their proportionate share of the systemwide deficit, as a solution to our budgetary ills," Yudof said in a statement to the Merced Sun-Star.

Powerful Politicians Pushed Campus

Merced was developed with nobly stated intentions. Political figures like Cruz Bustamante, who clutched the powerful assembly speaker position in 1996, readily adopted the populist notion that the children of poor immigrant farmers deserved a premier research institution in their own backyards. There was much debate about where to place the campus, but the regents decided on the San Joaquin Valley, a stretch of land where 40 percent of children are Latino, many of whom had historically not attended college.

Bustamante, who had pushed to have the campus located in his home district of Fresno, readily concedes the debate over campus location was “absolutely parochial.” University leaders were also slow to embrace the idea, until Bustamante and Dennis Cardoza, now a member of Congress, “cajoled, pushed [and] arm twisted the university president into making it a priority.”

“Between Dennis and I, we forced the issue as a major issue with UC,” says Bustamante, who went on to be the state’s lieutenant governor. “It was not a priority of theirs. They believed there were other resources they needed for existing campuses.”

That view is still held by many, who look at Merced and wonder if expanding capacity and access on existing campuses would have been less expensive and more effective than building a 10th research university in the San Joaquin Valley. Patrick Callan, president of the National Center for Public Policy and Higher Education, and a longtime observer of California higher education, says that building the campus is another example of politicians and university leaders being seduced by the idea of another research institution without thinking through the particulars.

“There’s a kind of hubris,” Callan says. “They believe they are the best public university in the world and all you had to do was hang out a sign that said ‘University of California’ and students and faculty would come running. Now they’re under-enrolled and it’s hugely expensive.”

“The university would like to have you think they were innocent bystanders, but for decades they stoked all this,” he adds. “Nobody is clean on this one. This is a bad decision for the state."

Location Presents Challenges

There’s a certain irony in the fact that Merced’s challenges are directly tied to its raison d'etre. Supporters theorized that bringing the University of California into an area where educational attainment was low would improve the lives of its people. What they’ve found in the early going, however, is that many of the people who live in Merced lack the qualifications to work at or attend the university.

“You’re just not going to get a whole lot of top highly qualified students coming from the valley,” says Peter Schrag, former editorial page editor of The Sacramento Bee and author of multiple books on California politics.

As for the qualified high schoolers who might want to go to college, there’s certainly no guarantee they’ll go to Merced. California State University’s Fresno campus is a little more than 50 miles away, and the other nine campuses in the system -- some of them located on sunny coastlines -- are a clear draw as well. Clark Gibson, who was among the San Diego department chairs to sign the letter suggesting that Merced might need to be closed, says it’s a mistake to assume students that live around Merced will enroll there.

“It doesn’t mean anybody living in the Central Valley would choose to go to UC Merced,” says Gibson, chair and professor of political science at San Diego “It’s kind of built on the false assumption that if you live there you would go there.”

Asked if placing the campus in Merced was a wise idea, even the campus provost says “It’s such a difficult question.”

“If you look at what this area needs, I would say absolutely it is imperative [to have a university],” Alley said “But I think putting it in Merced in many ways made it more difficult. I think it’s made our job tougher, to be honest.”

Most of the students who attend Merced actually don’t come from the San Joaquin Valley at all. While about a third hail from the region, the largest feeder areas for Merced are the San Francisco Bay area and Los Angeles. Merced officials actually say they’re happy with the geographic mix, and boast that the student body is diverse. Thirty percent of the students are Hispanic and 7 percent are black. Systemwide, Latino/Latina and Chicano/Chicana students make up about 13 percent of enrollment, and black students comprise 3 percent of enrollment. [This data has been corrected from an earlier version].

“We’re the University of California,” says Browne, Merced’s enrollment chief. “We’re not the University of San Joaquin Valley.”

All in-state students who meet minimum academic eligibility requirements are guaranteed admission to at least one University of California campus, but that doesn't mean they'll get into the campus of their choosing. Campuses like Berkeley have admissions standards much higher than the minimum, and they often turn away academically qualified students.

Eligible students who apply to a competitive campus and are denied admission are subsequently placed in a "referral pool" from which campuses with capacity, like Merced and Riverside, can draw. As such, Merced often admits students who have never even applied directly to the campus. Few such students actually accept the offer, however.

Merced’s yield rate, which represents the proportion of accepted students who actually enroll, is a meager 5 percent when referral pool candidates are included in the calculation. The rate increases to 14 percent when the referral pool is taken out of the equation.

Browne says he views the 14 percent yield rate as a more accurate depiction of student interest and demand, since the 5 percent includes a host of students who had never expressed interest in Merced. But even with referral pool candidates included, Riverside still manages to post a yield rate of 17 percent – 12 percentage points higher than Merced.

In 2008, Merced had the highest fall admissions rate in the system, with 90.7 percent of its applicants being accepted. There is still little information to measure how the students are performing academically, but 64 percent of the students who entered in 2005 were retained, according to internal data.

Hundreds of Millions Spent Already

Not surprisingly, Merced officials argue that any trouble they’re having getting the campus off the ground is tied to resources. While there’s little doubt the campus could use more money for recruitment and expansion, the notion that Merced has been deprived of what it was promised warrants further examination. Indeed, a review of state expenditures on Merced shows that planning and development dollars for the campus have – with the notable exception of some funding for buildings -- been largely in keeping with what officials said they would need to get started.

In the years leading up to Merced’s 2005 opening, the Legislature appropriated about $269 million to the campus for capital projects -- nearly $20 million more than Merced had projected it would need in the planning phase, according to the Legislative Analyst’s Office, California’s nonpartisan fiscal and policy adviser. The Legislature, however, has indeed fallen short of meeting the campuses’ projected capital needs, since Merced opened its doors in 2005. But while Merced is $85.6 million shy of the capital funds that planners said it would need by now, the campus is also accommodating about 2,000 fewer students, 600 fewer staff and 85 fewer faculty than it was projected to have at this time, according to internal data.

As for funding activities other than capital projects, the Legislature has delivered what it said it would in the form of supplemental funds used for operational expenditures. Merced has received $206.6 million in money for startup costs, faculty recruitment and other planning activities. The trouble for Merced, however, is that the campus agreed years ago that those supplemental dollars would be phased out by 2010-11, when it was presumed the campus would be generating sufficient enrollment-driven dollars from the state and tuition to make up for the difference.

Given the funding Merced has received, it’s difficult to make the case that the Legislature is to blame for the campus’ troubles, according to Steve Boilard, director of higher education for the Legislative Analyst’s Office.

“[It’s] hard to see how the Legislature is to blame for Merced's performance,” Boilard wrote in an e-mail to Inside Higher Ed. “Merced has been funded as called for in early budget plans, with tens of millions of dollars in special state funding provided in these initial years as the campus tries to establish a student base. Moreover, the UC system office has redirected money from UC's general state allocation to Merced to help them out while enrollment lags. Plus … the system redirect[ed] many thousands of students to Merced. It's not the Legislature's fault that those redirected students by and large turn down the offer.”

It’s clear, however, that the Legislature’s inability to fund capital projects at Merced has contributed to its stunted growth. Last year, the chair of California’s academic council lamented that Merced “essentially has two buildings for teaching, research and faculty offices.” In his letter to President Yudof, Michael T. Brown noted that the lack of laboratory space would force new science and engineering faculty to work in an old Air Force base 10 miles from campus.

“It is difficult to overstate the dire nature of Merced’s budgetary situation going forward, which will have an increasingly negative impact on Merced’s ability to attract the best and brightest faculty and graduate students, conduct UC-quality research and grow its academic programs in a sustainable way,” wrote Brown, a professor of counseling at the Santa Barbara campus.

Bustamante, who now works as a political adviser near Sacramento, places the fault squarely at the feet of the Legislature he once served.

“You know what I say? Shame on us,” he says. “Shame on us that we haven’t continued to make education a priority. Shame on us for not meeting or exceeding the original goals.”

Despite the challenges, there are bright spots for Merced. Perhaps due to its pioneering spirit, the campus’s first graduating class managed to lure the first lady, Michelle Obama, to speak at commencement. While it may have been a mostly symbolic moment, Obama’s speech also brought needed attention to a campus that is still creating a public profile.

The campus has also attracted faculty from distinguished institutions. Roland Winston, who spent seven years as chair of the physics department at the University of Chicago, arrived at Merced in 2003. He says “the idea of starting a new campus was irresistible,” but concedes that “people in Chicago couldn’t believe it” when he said he was leaving.

“The students are magnificent,” he says. “They are very often first generation, first in their families [to attend college]. They are motivated, very eager to learn, they have none of the sense of entitlement that I often saw at elite schools. And let’s face it, the University of Chicago is an elite school.”

Asked about the enrollment problems and funding issues at Merced, Winston maintains a sunny disposition that is more Malibu than Midwestern.

“Fortunately for me, I’m not the provost,” he said. “I only see opportunity.”

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