Outrage over devastating UC budget cuts
August 6, 2009
It is ironic that University of California President Mark Yudof will be the keynote speaker at the “Spirit of Small Business” luncheon on Thursday at the Doubletree Resort. Yudof is the architect of the massive cuts recently authorized by the Regents of the UC system. Since UCSB is the largest employer in Santa Barbara County, the case could be made that he has done more to devastate the economy of our region than anyone in recent memory.
The public usually does not pay much attention to what goes on within the ivory tower of academia, but it needs to understand what is happening to the UC system. The current “crisis,” widely thought to be the inevitable result of the cutbacks in funding provided to the University by the State, is in fact the work of the Regents. Evidence suggests that even with the State cutbacks, the UC system is in far better financial condition than its official spokespeople are claiming. The UC’s bond rating was recently affirmed as “stable” owing in part to a “sizeable balance sheet that remains highly liquid, with $5.4 billion of unrestricted financial resources ($6.5 billion excluding post-retirement health liabilities) and active treasury management monitoring a short-term investment pool exceeding $6 billion.”
How can the University have such resources at its disposal when, for years, the amount of the State budget allocated to it has been shrinking? Because since the 1980’s, the Regents have been pushing the University toward privatization, aggressively soliciting investments from industry and business, as well as donations of the kind that all colleges and universities solicit from people like their alumni. They have deliberately sought to reduce the University’s dependence on the State, so it is hardly surprising that the State should have reduced its allocations to the University. All during the ‘90’s and well into the new millennium, the Regents were boasting about how successful their efforts had been and how much money they had taken in, yet now they cry poor, and are prepared to slash the salaries of their employees or to lay many of them off, to cut programs of vital necessity to students, and, at the same time, to raise student fees.
The public needs to understand that the Regents, the eighteen people who ultimately control the UC system, are not professional educators, they are political appointees. They are mostly very wealthy business people, strong supporters of Governor Schwarzenegger, and believers in a rather primitive idea of the providential mechanics of “free” markets. In their efforts to privatize the University, they have sought to run it, not as a public resource, dedicated to the education of the people of California and the pursuit of knowledge, but as a business venture, an institutional platform on which to establish profit-making enterprises that will benefit primarily the interests of big-business, and only secondarily – in “trickle-down” fashion – the State and its citizens.
In refusing to draw upon the funds they have accumulated or to redirect money from revenue-generating operations such as hospitals and sports activities, the Regents have shown themselves for what they are. They claim that such money cannot be touched because it has been committed to specific projects, but they are the ones who determine the conditions upon which external funds are accepted and allocated. Yudof has repeatedly claimed that the money is committed, and some of it is, but a huge amount is not: as the bond rating says, the University holds “$5.4 billion of unrestricted financial resources.” The Regents are simply unwilling to touch the assets they have amassed for their profit-making ventures or to risk giving pause to future investors; they are simply stonewalling to protect their private interests. They are using the current economic downturn as a plausible excuse to make cuts they have long wanted to make as part of the privatization process. Their policies and conduct represent a monumental betrayal of the public trust, comparable to what we have seen happen at Enron and at Wall Street banks and investment firms.
These cuts do not just impair the way the University works, they fundamentally redefine what it is: they mean the end of the promise that the UC had always offered, of access to an excellent education for all qualified students no matter what their economic background. Delivering on that promise for decades, the UC created a large and well-educated workforce that powered California’s extraordinary prosperity and animated its vibrant culture. Make no mistake: these cuts will have profound and long-term consequences for the quality of life; they will affect everyone who lives here. There are plans to close some of California’s parks temporarily in response to the budget crisis: well, imagine if Yosemite was not just closed for awhile, but sold off to developers and turned into a cluster of gated communities. The selling off of the UC system is just as destructive a treatment of just as precious a resource.