Council Issues Implementation Task Force Report and “Rebenching” Plan
New State Cuts and Audit Highlight Urgency of Effort
The Academic Council recently endorsed 23 recommendations proposed by Council’s Implementation Task Force (ITF), a special committee Council created in January 2011 to develop budget analyses and concrete proposals for dealing with the ongoing budget crisis suggested in the report of Council’s Special Committee on a Plan for UC.
The ITF report outlines short, medium, and long-term options for managing the budget gap and enrollment challenges, and proposes a framework for allocating State funds within the University in a more equitable and transparent way.
Council agreed with the Task Force’s approach and sent all 23 recommendations to the Administration to consider as part of the University’s effort to “rebench” the formulas that determine State fund allocations to the campuses. The rebenching process is the second phase of an internal budget reform, following adoption of the “Funding Streams” model by the Regents. Under Funding Streams, all of the revenues generated by a campus remain on the campus, and the Office of the President and any systemwide priorities are funded with assessments paid by the campuses. While Funding Streams deals with all revenue sources except for State funds, rebenching will address the allocation of State funds.
One of the ITF report’s central principles is that every UC resident undergraduate should receive the identical allocation of state funds for their education, regardless of their campus. Similarly, the report holds that all students of a given type (e.g., all academic doctoral students) should receive the same level of state subsidy for their category across the campuses. The report proposes a mechanism for defining and adjusting systemwide resident undergraduate enrollment targets, and an enrollment management framework that is intended to reduce the incentive for campuses to over-enroll unfunded resident undergraduates by limiting the state subsidy to targeted enrollments. The framework seeks to ensure that UC enrolls all undergraduate residents for whom the state has provided funding, and address the need for UC to reduce the number of over-enrolled students.
ITF Chair James Chalfant says the Task Force report is particularly timely in the context of a recent state audit of the University, which also calls for greater transparency in the allocation of state funds, and draws attention to the different amounts UC allocates per student to different campuses—ranging from $19,529 per student at UCLA to $12,309 per student at UC Santa Barbara. Although Chalfant criticizes the audit’s comparison of UCSF’s subsidy of $55,186 per student with subsidies at other UC campuses as misleading since UCSF has no undergraduate students, he agrees that such comparisons clearly demonstrate the need for transparency.
“Rebenching will help undo the effects of many years of budget allocations that do not reflect the University’s current configuration or the aspirations of its newer and growing campuses,” he said. “It will also provide greater transparency concerning ’off the top’ budget allocations for programs not directly tied to student enrollments. My hope is that it will also demonstrate the consequences of inadequate State funding by showing that current levels of state funds and tuition are not sufficient to maintain current levels of enrollment and still provide a UC-quality education. It is harder to make that case when the allocation of state funds is so poorly understood.”
Senate Chair Dan Simmons says the new funding models will require the University to clearly identify systemwide priorities for which funds are assigned before state money is sent to the campuses. He says the report is consistent with the Senate’s longstanding commitment to maintaining the systemwide sense of the University of California.
“Rebenching is urgently needed to preserve UC’s research excellence and the Senate’s core value that UC is one university with a single standard of excellence that applies to all ten campuses,” Simmons says.
Incoming Senate Chair Bob Anderson agrees. “Rebenching is the most important thing the University will, or will not, do this year,” he says.
The Academic Council has called for the rebenching project to begin immediately, and indeed, the Task Force report is now in the hands of President Yudof as well as the President’s Budget Rebenching Task Force, a joint Administration-Senate body charged with proposing a methodology for allocating state funds to the campuses. That group meets next on September 7.
Council Resolution Criticizes Budget Cut Allocation Methodology
The Implementation Task Force report takes on added significance in the context of a recent UCOP decision to modify some of the provisions endorsed by the Senate and adopted by UCOP in the December 2010 “Funding Streams” proposal, which recommended different formulas for allocating state funding augmentations and state funding reductions to the campuses, based on campuses’ differential abilities to make-up reductions with other revenue sources such as nonresident tuition and professional degree supplemental tuition.
However, UCOP has now decided to allocate the new $650 million reduction in state funding for 2011-12 according to the same formula as that for state funding augmentations. On July 27, Council adopted a resolution protesting the lack of consultation regarding this decision and advising the President that the full $650 million reduction in 2011-2012 state funding should be allocated among the campuses under the Funding Streams methodology for state fund reductions.
The resolution points to Council’s March 2011 commentary on Funding Streams, in which Council notes that the Funding Streams reform should be treated as an interim policy, subject to revision as rebenching proceeds. It calls on UCOP to implement budget reductions using the Funding Streams methodology, which adjusts for a campus ability to absorb cuts, rather than the methodology for augmentations, which does not.