Potential Boon for California Higher Ed

January 7, 2010

California's public colleges have had a brutal couple of years. It'd be ridiculously premature to say that things are turning around -- but Wednesday brought them at the very least a symbolic boost, in the form of a proposal that could lead to more of what they really want: a greater share of state funds.

In a State of the State speech that elevated education, and higher education in particular, above some competing state priorities, Gov. Arnold Schwarzenegger proposed amending the state's Constitution to ensure that the state's two major public university systems receive no less than 10 percent of the state's operating funds each year. The additional funds would come by cutting spiraling state spending on prisons, the governor said.

Although higher education budget experts were scrambling Wednesday to reconcile the figures the governor used with their own figures, most agreed that the University of California and California State University systems now receive roughly 7 percent of the state budget, and that such an increase would bring them upwards of $2 billion a year more if it came to pass.

The plan faces enormous hurdles, though, in that it would require at least two-thirds of state voters to back a ballot measure and because Schwarzenegger proposes deriving the funds by privatizing the state's prison system, an idea that California's powerful union of prison guards, among others, will vigorously oppose. And the governor is a lame duck, so hardly at the peak of his political powers.

Those roadblocks notwithstanding, California's higher education leaders were almost exultant about the governor's proposals, even as they acknowledged its long-shot odds. That's because, after absorbing disproportionately large losses of state funds the last two years that have forced faculty and staff furloughs and other painful cuts on campuses (the California Community Colleges took an 8 percent cut, too), the universities heard Schwarzenegger use powerful language promising both to protect higher education in the short term and elevate it in the future.

Yes, more state budget cuts will be necessary to fill another nearly $20 billion gap, Schwarzenegger said Wednesday, "[b]ut I am drawing this line. Because our future economic well-being is so dependent upon education, I will protect education funding in this budget. And we can no longer afford to cut higher education either."

California's priorities have grown "out of whack," the governor said. Three decades ago, "10 percent of the general fund went to higher education and three percent went to prisons. Today, almost 11 percent goes to prisons and only 7.5 percent goes to higher education.... What does it say about any state that focuses more on prison uniforms than on caps and gowns? It simply is not healthy."

He added: "If you have two states and one spends more on educating and the other one spends more on incarcerating, in which state's economy would you invest?"

What's needed, Schwarzenegger said, is a "historic and transforming realignment of California's priorities," best accomplished, he argued, by "a constitutional amendment so that never again do we spend a greater percentage of our money on prisons than on higher education."

In a news release and draft legislative language that the governor's office released Wednesday afternoon, state leaders fleshed out the proposal.

Beginning in the 2014-5 fiscal year (five years from now, in other words), "no less than 10 percent of the General Fund expenditures" (which the proposal defines as excluding billions of dollars in debt payments and some other costs) would have to go toward "the support of public institutions of higher education," which the language defines as UC and Cal State, excluding state student aid programs and the California Community Colleges. (The legislative language specifically notes that any shift in funds could not take money away from Proposition 98, the state law under which community colleges and K-12 receive funds.)

Under the plan, the state prison system, meanwhile, would receive no more than 7 percent of state funds beginning in 2014-5.

Schwarzenegger's proposed change envisions funds to start shifting from prisons to universities as early as 2011-12, with higher education gaining any savings derived from privatizing the the prison system.

Leaders in higher education, who have issued increasingly dire warnings in recent months about the potential damage being done to both student access and institutional quality by the downward spiral in state support, cheered the governor's announcement.

"We appreciate the Governor’s intention to begin to reinvest in California’s public universities because there is a critical need in the state for a well educated workforce that can help us to remain competitive in the global economy," Charles B. Reed, chancellor of the Cal State system, said in a prepared statement. "The administration deserves credit for proposing this idea."

"This is a bold and visionary plan that represents a fundamental restoration of the values and priorities that have made California great," Mark G. Yudof, president of the University of California, said in a statement. "I am delighted that Governor Schwarzenegger recognizes the need for our state to invest again in education and innovation. I look forward to working with the governor and with the Legislature to see that this proposal reaches the ballot so that the people of California may have a voice in their own future."

"Wisdom and common sense remind us that tipping the scales back in favor of fully funding education means that fewer Californians will land in a prison cell and we will reduce costs associated with larger prison populations,” said Jack Scott, chancellor of the California Community Colleges. In an interview, Scott said that while the governor's proposal would not promise any increase directly for community colleges, he hoped that as the initiative took shape, some of the additional funds for Cal State and UC might be set aside to ensure additional enrollment slots at those institutions for students transferring from two-year institutions.

"That would certainly be fair, and would certainly increase community college support for the proposal. I would expect a receptive ear from both of those leaders," he said of Yudof and Reed.

While they focused their public rhetoric on the potential long term benefits of the highly uncertain fate of the proposed funding shift, higher education leaders were perhaps most pleased about the governor's promise to shield them in the near term, given that state lawmakers will soon convene needing to cut about $6 billion from the remaining six months of the 2009-10 fiscal year and $13 billion more from the 2010-11 budget that Schwarzenegger will soon propose.

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