The Budget and How it Affects You - Q &A

Possible Salary Reductions

Q: Is it true that we are going to have our salaries reduced?

A: It is very possible that the UC may decide to cut all salaries 5% or use a furlough system to accomplish the same thing. However, in the case of lecturers and librarians, the university has to negotiate any salary reduction.

Q: If the UC is broke, why would the union resist a 5% salary reduction?

A: We do not think the university is broke, and we want them to prove to us that they need to make these cuts.

Q: Why do you think they are not broke?

A: The university brings in billions of dollars every year in profits from medical services, extension programs, parking, housing, research, patents, and fund raising.  They are just trying to maintain a high level of disposable income, while they claim they are poor. (see http://universityprobe.org/2009/04/budget-lies-a-letter-to-the-president...)

Q: Why do they want to claim they are poor?

A: They want to justify raising fees and getting more money from the state. They also want to make sure that they have enough money to pay star faculty and administrators high salaries.

Q: Why do you think the UC has more money than it claims it has?

A: This year, the UC will be losing a lot of money due to state budget cuts, but much of this money will be covered by federal stimulus money ($510 million). They have also raised student fees 9.3% and have reduced enrollments(a target of 2,300) system-wide.  All of these actions should help to balance the budget, but UC administrators never give an honest accounting of the actual budget.

Q: What is dishonest about how they present their budget?

A: When they discuss how the state cuts will affect the UC budget, they usually do not take into account the federal stimulus money, and they rarely include the extra income that will come in from student fee increases or the university’s access to unrestricted funds (15 billion dollars). If they included all of their sources of revenue, the budget might still be out of balance, but it would not be as dire as they have been claiming.

Why UC Lies about the Budget

Q: Why would the university hide the facts about their own budget?

A: There are many answers to this question.  One possible response is that they are trying to get as much money from the state as possible.  Another possibility is that the want to claim a state of fiscal emergency so they can impose their agendas.

Q: What agendas do they want to impose?

A: Some regents and chancellors want UC to become a private institution that is funded out of high tuition.  By moving to this type of system, they could charge more and not be dependent on the unstable state budget.  Another agenda is that some people want the university to concentrate on research and graduate education, and so they are using the fiscal crisis to enact their agenda.

Cutting Lecturers and Undergraduate Education

Q: What proof do you have that people are using the budget crisis to impose their own agendas?

A: Throughout the UC system, we are seeing cuts to programs that serve mostly undergraduates.  For example, many language and writing programs have been reduced, and at UCSC, they are trying to get rid of the very popular Community Studies Program. What all of these programs share in common is that they serve primarily undergraduate students, and they are staffed primarily by lecturers.

Q: Why are they laying off mostly lecturers?

A: Since lecturers are paid out of “temporary” funds, they are the easiest to cut.  Also, since continuing appointments now have a year’s notice for a complete lay-off, some administrators have decided to give them lay-off notices, while the university figures out what to do next.

Q: What is the university trying to figure out?

A: No one knows how bad the state budget cuts will be, and so everything is still up in the air. Also, departments are trying to see if they can get senate faculty to cover the courses that lecturers usually teach.

Yudof’s Power Grab

Q: What other agendas are being served by the budget crisis?

A: President Yudof has asked for additional executive powers in order to deal with the fiscal crisis.  This move is something like declaring martial law or acting like George W. Bush after 9/11 (After all, Yudof does come to us from U. of Texas).

Q: What does Yudof want to do with his new powers?

A: He wants more flexibility in dealing with financial problems, and he wants to protect the salaries of the highest compensated individuals.

(See http://www.universityofcalifornia.edu/news/article/21271)

Protecting the Wealthy

Q: If he wants to protect the wealthiest in the system, why would he cut the top people 5%?

A: There has been tremendous political pressure put on the UC to reign in executive pay, and so they are cutting 30 highly compensated people 5%. These cuts may make it easier to cut everyone else. Also, by cutting the top 30 people, they can hide the truth about the top one thousand people. (For last year’s salaries of all UC employees, see: http://www.ocregister.com/articles/salary-uc-irvine-2238213-employees-pay)

Q: What is the truth about the top one thousand?

A: There are close to 1,000 people in the UC system that make over $300,000.  This is a fact that the university wants to hide by concentrating on the salary of the top 30 managers.

Q: Why do many people make so much money in the UC system?

A: The UC has an out-of-control compensation system for star faculty and administrators, and these stars eat up much of the money that could go to other people like lecturers and librarians.

More Stars, Less Classes

Q: What is so special about these stars?

A: The university has decided that certain positions are “market worthy,” and therefore, the UC must pay the same salaries that these people could get at Harvard and Stanford.

The ironic thing is that virtually none of these highly compensated individuals do any undergraduate teaching.

Q: How do you know that these stars are not teaching undergraduate courses?

A: Almost all of the people making over $300,000 are administrators or faculty from the medical centers and professional schools. Also, if we look at the faculty making between $300,000 and $2000,000, we find that most of them are research professors who teach mostly graduate courses.

Q: How can the UC still hold enough undergraduate courses if it puts so much of its money into people who do no undergraduate teaching?

A: This is the real crisis in the UC system, and it is a crisis of priorities. The UC pretends that it is centered on undergraduate education, while in fact, it is really focused on research and graduate education.

Q: Why does it pretend to concentrate on undergraduate education?

A: By pretending to perform a public good, the university can get money from the state and maintain a tax-exempt status, while it functions as a corporation that compensates the people at the top in a disproportionate manner.

The Privatized Free Agent Senate Faculty

Q: Why haven’t the senate faculty complained about this system?

A: Some senate faculty are upset, but many profit from a system that allows them to renegotiate their salaries every year in a private deal with a dean that circumvents the peer review process.

Q: Why are they making private deals?

A: In the UC system, over 85% of the senate faculty are “off-scale,” which usually means that their salaries are higher than the official pay scale.  Moreover, these salary increases and retention offers are paid out of the same pool that supports lecturers’ and graduate student salaries.

Q: Isn’t the UC freezing salaries and new hires?

A: There is no proof that salary increases are not happening.  In fact, we know that people are still getting merit increases, and new faculty are still being hired at “off-scale” rates.

UC’s Autonomous Status and the UC Investment Losses

Q: Should we support the recent move by the legislators to take away the UC’s autonomous status?

A: If we can guarantee that the state will not raid the UC’s funds, it would be good to give the state some power of the university.

Q: What should the state do with the UC system?

A: It should first see if the money earmarked for instruction is actually going to undergraduate education.  It should also look into the handling of the UC pension plan and endowments.

Q: What is going on with the pension plan and endowments?

A:  Since the start of 2008, the university has lost over twenty-two billion dollars in investments.( See http://www.ucop.edu/treasurer/invinfo/investment_info.html)

Q: Didn’t everyone lose money last year?

A: The UC endowment and pension funds have been underperforming since 2000 when the management of the investments was privatized and outsourced. (see http://www.eastbayexpress.com/news/parsky_s_party/Content?oid=426427)

Q: How was it privatized?

A: Until 2000, the UC investments were one of the highest performers in the country, and they were handled in-house by the treasurer, but after 2000, they were farmed out to external money managers, and now the investments have underperformed almost all comparable institutions.

Q: What should the state do about this?

A: The state needs to force the regents to be more transparent and open about how they make important financial decisions.  The regents should also be forced to put more employees on the pension board.

Q: How will the losses in the UC investments affect lecturers and librarians?

A: First off, employees will have to pay a higher percentage of their salary into the pension plan, and the structure of the plan may be changed for new employees.  They could also change the retirement age or the credit you get for years of service. Another problem is that these investment losses can allow the university to declare a permanent state of fiscal emergency.

Q: I am confused now. You said above that the university has tons of money and is only faking a fiscal emergency, and now, you are saying that there really is an emergency.

A:  For the operating budget, there is still plenty of money, especially if the UC deals with its compensation issues.  However, the pension plan does have a long-term problem that can be fixed by better management and a more conservative investment strategy.

What You Can Do

Q: What can the average lecturer do?

A: The first thing is to keep yourself informed and don’t be scared by misinformation. Whenever the university announces anything about the budget, you should look at it with a skeptical eye. Another thing is to get active in your local union.

Q: What can the local union do for me?

A: The local union can circulate real information and make sure that our contract is being followed. Also, the union can help organize resistances to some of these changes?

Q: What should I do if I get a lay-off notice?

A: Contact your union field representative and make sure that the lay-off was handled in the correct way.

Q: Can the union help me resist a lay-off?

A: The union can prevent a lay-off if someone less senior than you will be replacing you or if the department does not have a real plan concerning how they will staff your classes.

Already, mistakes are being made, and we have been able to stop some of the lay-off notices; however, we need lecturers to tell us what is going on in their particular departments.

Q: Is the union planning to protest the cutting of undergraduate courses?

A: We are currently organizing a campaign to get students and parents involved in resisting these changes.  One potential activity is to hand out leaflets at the guided tours that prospective parents and students take around the campuses.

Q: How can I get involved?

A: Make sure you are a union member (it costs nothing to join) and go to a local union meaning.  After all, you are the union.

These questions and answers were provided by Bob Samuels, President, UC-AFT