Alternative Funding Models for the UC System

Thursday, May 17, marked the latest installment in the “Speak Out!” series, a symposium reflecting on the current economic and educational climate at the University of California. The event, titled, “Alternative Funding Models for the UC System,” revolved around three prospective funding models for higher education. It was sponsored by the UCR Center for Ideas and Society and featured a panel composed of UCSF Professor of Medicine Stan Glantz, Chris LoCascio and Alex Abelson of FixUC, and political activist of ReFund CA Jono Shaffer. Amidst the $15.7 billion deficit currently facing California and the implications of Jerry Brown’s recent state budget proposal, panelists discussed the need for further investment towards higher education through different modes of funding.

“The core of the agreement between the governor and the UC system is that the UC will no longer be held accountable for its priorities,” stated UCSF Professor of Medicine Steve Glantz who referred to the unfulfilled goals of the 1960-1975 Master Plan for Higher Education.

In a proposal entitled “Financial Options for Restoring Quality and Access to Public Higher Education in California,” Glantz advocates pressing the “reset” button by rolling back fees to the 1990 timetable, which would result in the annual tuition of $3,299 per student. The funding for this initiative would cost the median taxpayer an annual surcharge of $49, which constitutes over half of the labor force in California and the overall cost of $6.67 billion dollars per year.

As chair of the systemwide Committee on Planning and Budget (2005-2006), Glantz had assisted in the development of the “Current Budget Trends and Future of the UC” report, which played out the political accords between the university and the governor as being “financially untenable.” At the time of the report, Glantz traced the crisis back to the period of Governor Arnold Schwarzenegger, whose governance had led to tremendous cuts to higher education and the failed promises of a 3 percent increase for the following years. “I think one of the other problems is that UC (system), Cal State and CC are always fighting with each other over the shrinking pie and it weakens them politically,” stated Glantz at the event. In an interview with the Highlander, Glantz expressed great frustration over compromised proposals by both the governor and university officials, which has led to a greater disinvestment in higher education, a “squeezed” student enrollment rate, and the depreciated value in the lack of funding

As one of the primary creators of the FixUC proposal and Editor-in-Chief of the Highlander newspaper, Chris LoCascio advocated the need for a more sustainable means of funding that was less reliant on the backings of a fluctuating and unpredictable form of state funding. LoCascio focused on “rethinking education” of the UC system through the proposal, which would eliminate upfront costs and therefore, eliminate the need for financial aid and interest-incurring loans. Funding would result from students contributing around 5 percent of their earnings for 20 years, thus creating a greater sense of personal investment for their alma mater. In retrospect, universities would encourage graduate employment and continuing alumni benefits as a source of ultimate revenue. LoCascio stated that the UC system remains one of the biggest sources of revenue returns to California where “UCR specifically invests $1.4 million dollars into the state.” In an updated model released back in March, the Capped Contribution Model creates an income threshold between for graduate contribution. Through the enforcement of the IRS, the collections aspect of the funding program will bring forth consistent funding.

In hopes of readdressing the core of the state financial crisis, organizer of the Service Employees International Union Jono Shaffer, wanted the audience to further address the source of taxation and the need for increased revenue throughout the state. In reference to the “Millionaire’s Tax,” Shaffer suggested that the few who had been responsible for the recession should be the ones responsible for fixing the economy. Shaffer declared the discussion a matter of a revenue crisis versus cuts and taxation. “The question of the CA budget within the contents of the broader economic situation if we want to fix the problem (is) that we can’t just sit and rearrange the deck chairs on the titanic if we want a real fix,” expressed Shaffer whose main message was to “make the 1 percent pay.” Shaffer considers plutocracy to be the problem with the actions of political actors and pushes for a united front through voter registration and stronger legislation.

The end of the discussion allowed for a short public forum period which addressed concerns among each model and their overall application. “I don’t think we can roll back the clock because we’re going to find ourselves in the exact same situation 10 years later” stated LoCascio in response to Professor’s Glantz proposal, while Shaffer felt that the FixUC proposal “accepts too much of the status quo and it allows the system to fall apart…so you’ve come up with a solution that fits within a paradigm that’s broken.” Glantz also expressed the “political motive” for the overall financial crisis. Questions addressing the student loan bubble had been identified by Shaffer who “identify the debt and get debt forgiveness on anything that’s profiteering,” which excluded bankruptcy, and ultimately can hurt one’s credit. Despite the disagreement in the accuracy of financials, the overall panel pushed for further investment in higher education through alternative sources of funding.

Full disclosure: Panel participant Chris LoCascio is a member of the Highlander staff.

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