Former chancellor offers solution to UC's funding woes

Charles E. Young retired as UCLA’s chancellor in 1997, but it is clear he has never lost interest in — or passion for — UCLA and the University of California.

 

This was evident on April 21, when Young, the guest speaker at the 25th annual Bollens-Ries-Hoffenberg Lecture, chose to focus his talk on California’s dire economic situation and a solution to the funding crisis that now threatens to topple UC as the most respected public university system in the nation. Attended by about 175 people at the Faculty Center, the lecture was presented by the Department of Political Science and the UCLA Luskin School of Public Affairs.

 

A professor emeritus of political science and public policy, Young recalled that after World War II had ended, California ranked as a national leader in a number of important categories. The economy, which had grown to become the sixth- or seventh-largest in the world, benefited from a population boom and tremendous growth in the entertainment, agricultural, aerospace and high-tech industries. And, of course, in scholarship.

 

"The University of California played a major role in [California’s] growth and development," Young said. "It needed to be supported because it educated the youth of this state and the nation. It educated not only the undergraduate students, but also the graduate and professional students who were going to go out and continue moving California and the United States — and the world, in a way — forward, in the right direction."

 

All along, UC had experienced normal ups and downs in terms of support, but the general trend had been upward, Young said. "I think by the late ’80s, though, it became clear that we were no longer going up and down. The private universities were growing and prospering, and the public universities were on a downward curve."

 

Chancellor Robert J. Birgeneau of UC Berkeley, Young recalled, used to say that the state of California was the campus’ primary funder, providing $450 million. Federal funding came in at $350 million, student fees at $150 million and philanthropy at $200 million.

 

"Now, however, Birgeneau says that federal funding comes first at $500 million, making UC a federal university. I take a little exception," Young said, prompting laughter. "Next come student fees at $315 million, philanthropy at $315 million and then the state of California. Now that’s a dramatic change."

 

Young offered two possible reasons for California’s financial troubles: Proposition 13 and Proposition 98, passed by voters in 1978 and 1988, respectively. Proposition 13 was meant to reduce property taxes, which it did, Young said. "But it did a lot of other things. ... To look at one of the things it did, it created a requirement that the state budget needed to be passed by a two-thirds majority of both houses in the Legislature. And not only the budget, but any action by the Legislature or the governor that would increase taxes. It created rule by minority."

 

Second, Proposition 13 also took away funds that in the past would have been provided to local governments through property taxes, Young explained. For example, the state picked up the financial responsibility for K-12, which reduced the amount of money that was available to spend on other state activities.

 

Proposition 98 brought further difficulty to UC, Young said, in that it decreed that approximately 42% of the state’s general fund had to be spent on the K-12 public school system. If the state could not meet that obligation, it incurred a debt that had to be paid off in the future.

 

To help remedy the state’s ongoing financial situation, Young proposed moving toward something he calls "modified privatization." The idea involves putting together a system in which UC is funded not by an appropriation, but by a "subvention" from the state that is based upon a contractual relationship.

 

"So representatives from the university and the state would meet and decide," Young said. "We could tell the state, ‘You want us to do X, Y and Z, and to educate [a certain number of] students from the state of California in these areas at this level.’ And we will do that in exchange for [an] amount of money.

 

"And hopefully, we’ll have it worked out in such a way that we could have a rolling, five-year contract, which would give us some degree of stability. And we’d come back every year and say, ‘Well, we think we did what we were asked to do, didn’t we? Yes? No? Partially?’ Based on that decision, we’ll continue with our contractual arrangement."

 

Not all of the 10 UC campuses would have to be privatized, Young added. There could be a tiered system in which the campuses are divided into groups, based on their ability to replace state with non-state funding. Smaller campuses like Merced — still in its infancy — could continue to receive more state support.

 

This means that UC will have to find more funding sources, Young said. Most likely, it will have to raise more money from tuition and move toward substantially increasing the number of out-of-state and international students. He also suggested raising money through research that receives income through patents and royalties. And, of course, tapping UCLA’s friends and supporters in the private sector.

 

"I think this is a reasonable proposal. It’s not anything that’s going to be easy to accomplish, and there are a lot of reasons for this," Young said. "They have to do with the state being unwilling to give up control, with the conservative nature of the educational process and with the unwillingness to look at something that is as substantial a departure from the current situation as what I’m proposing. And there are some concerns that are going to have to be overcome. ...

 

"But I think, for a variety of reasons, this is something that ought to be given serious consideration," he concluded. "I urge people to do so."

 

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