University of California President Janet Napolitano and other top UC officials have proposed a new plan to manage tuition increases. But their plan runs the risk of backfiring because it depends heavily on consistent future support from the state Legislature and Gov. Gavin Newsom.

Under what’s known as cohort-based tuition, incoming students would be guaranteed that their tuition wouldn’t change for their first six years at a UC campus. This would help students and their families avoid the big tuition hikes that led to protests a decade ago during the recession. But it would also offer UC leaders the flexibility to increase tuition for incoming classes.

A staff report argued that this policy “could provide greater financial predictability for students, families and UC campuses while also improving UC affordability.” At the regents’ recent meeting in San Francisco, Nathan Brostrom, the UC system’s chief financial officer, called the concept “very, very promising,” according to the Los Angeles Times.

Can Legislature’s support be counted on?

But as some regents pointed out, “cohort tuition” only works if state funding is stable or increasing. And while overall state revenue has increased eight straight years, that is a historical anomaly. Over a normal decade, revenue typically either declines or is flat for at least three years, due largely to the state’s reliance on volatile capital gains.

Unless UC can rely on Newsom and the Legislature to not lower funding under any circumstances, “this all falls apart,” said Cecilia Estolano, the Los Angeles lawyer and urban planner who is vice chair of the Board of Regents, according to the Times. 

While the University of Illinois’ Urbana-Champaign campus has had cohort-based tuition since 2004, public universities in Georgia, Kansas and Oregon decided to end their programs in recent years after state funding cuts.

But regents have more to be nervous over than the chance a recession would cause budget headaches. While the Napolitano-Newsom relationship has no known tension, the UC president has many critics in the Legislature because of harsh audits since she took over in 2013. One issued in 2016 faulted UC for dealing with tight budgets by choosing to sharply increase higher tuition-paying foreign and out-of-students by lowering admission standards – instead of undertaking any belt-tightening. Another published in 2017 detailed how Napolitano’s office had hidden $175 million from the Legislature while requesting tuition hikes and showed that Napolitano’s top aides had interfered with UC campuses’ evaluations of the performance of her office.

State law was rebuke aimed at Napolitano

That audit led to one of the Legislature’s harshest rebukes of a top state official in decades: the unanimous passage in late 2017 of a law that makes it a crime punishable with a fine up to $5,000 for a state agency to interfere with, impede or obstruct an audit formally requested by state lawmakers. The audit also led the Bay Area News Group to call for Napolitano’s firing.

For the coming school year, UC will continue to charge in-state undergraduates $11,502 in annual tuition. Since Napolitano became UC president, undergraduate tuition has only gone up once. In 2017, regents approved a $282 increase, or 2.5 percent.

Regents are expected to have further discussions about cohort tuition at their Sept. 18-19 meeting at UCLA.

Will progressive lawmakers challenge Gov. Jerry Brown over his decision to dash their big dreams for the 2017-18 fiscal year? Or will they acquiesce as they mostly have in recent months of May after Brown released revised budgets without money for new or expanded government programs?

Despite the pleas of Assembly Speaker Anthony Rendon, D-Paramount, and Senate President Kevin de Leon, D-Los Angeles, that he take a break from his usual frugality, the governor’s revised 2017-18 $124 billion general fund budget released last week is far more concerned about helping public schools and beefing up the state’s rainy-day fund than any new liberal cause.

With a month until the June 15 deadline to adopt a state budget, that means Democratic lawmakers – especially those from liberal districts in the Bay Area and Los Angeles County – have a big decision to make: Do they accept a wipeout? Or do they put pressure on Brown by sending him bills popular with Trump-agitated grass-roots Democrats and making him veto them?

This is the dynamic created by the fact that Democratic legislative leaders entered the current session in January with ambitious hopes for bold new programs making college much cheaper, expanding state affordable housing efforts and providing health care for all.

Ambitious legislation not taken seriously

The governor doesn’t even think the ideas are worth discussing.

Brown’s budget rejects the basics of Assembly Bill 1356, by Assemblywoman Susan Talamantes Eggman, D-Stockton, which would have added a 1 percent surtax on California families earning $1 million or more to cover the cost of fees and tuition for in-state students at the University of California, California State University and the California Community College system. The governor also dismissed without comment Assembly Democrats’ push to help cover basic living expenses for 350,000-plus UC and CSU students from families which make less than $150,000 a year.

Brown’s budget makes no mention of SB562, a bill by Sens. Ricardo Lara, D-Bell Gardens, and Toni Atkins, D-San Diego, that would create a government-run single-payer health care system. It’s won some early committee victories, despite not having a fiscal analysis that explains how or who will pay for the program.

And a push supported by dozens of Democratic lawmakers to impose a fee on real-estate transactions to provide a steady stream of hundreds of millions of dollars in annual funding for subsidized affordable housing projects was flatly rejected by Brown as inadequate to addressing California’s housing crisis.

At a Thursday press conference, the governor said, “I don’t think we should throw money at the housing problem if we don’t adopt real changes that make housing production more efficient and less costly. We’ve got to do that first.”

For nearly two years, the governor has pushed for laws reforming the California Environmental Quality Act to give builders fewer obstacles to constructing new housing units. But legislative Democrats have heeded their union, trial lawyer and environmental allies who say CEQA shouldn’t be weakened.

Brown and top Democratic lawmakers pulled off a big win last month on an issue they agreed on: the urgent need to improve California’s decaying infrastructure, both for quality-of-life reasons and to help the economy by reducing the drag on the economy caused by bad, clogged roads. They pushed through gas tax hikes to pay for a 10-year, $52 billion infrastructure improvement and repair initiative.

But Brown’s pragmatism about government spending has been the calling card of his second stint as governor. Given his high approval ratings, the governor seems unlikely to believe he needs to make concessions if Democratic lawmakers send him spending bills he doesn’t like.

Gov. Jerry Brown and state legislators have rejected the tuition hikes advanced by UC President Janet Napolitano. In response she insisted, according to the Los Angeles Times, the system “will not expand enrollment of California freshmen and transfer students in the fall unless more state revenues are appropriated and will cap enrollment of out-of-state students at UCLA and UC Berkeley.”

The threat of tuition hikes led to student protests, including the six from UC Santa Cruz in the above picture who were arrested for blocking Highway 17. The activist group Change.org is insisting, “We demand that the DA’s office drop the two misdemeanor charges, and that the Student Judicial Affairs lift the suspension so that these students can return to their homes and their lives.”

Brown’s opposition

The unprecedented conflict has become a thorn in the side of Gov. Brown, who has not faced such staunch opposition from fellow Democrats during his latest stint as the state’s chief executive.

Napolitano, the former secretary of the U.S. Department of Homeland Security, continues to weather Brown’s intense pressure to steady tuition rates. As CalWatchdog.com previously reported, Brown has berated the board for the hikes, reminding them the UC system is “not Wall Street” and “has as its mission public service.”

Although the UC system is independent according to the California Constitution, the money it receives from the state general fund must be approved by the Legislature and the governor. That sets up tension on budget matters.

Following his words with actions, Brown, also a board member, managed in January to engineer a new “select advisory committee” for the board, composed only of himself and Napolitano. Its stated aim, to “generate recommendations that will help determine appropriate state funding levels for UC in the short and long term,” telegraphed growing influence by Brown’s camp over the final tuition numbers.

Yet the controversy has not abated. Instead, it has spread, transforming from an insider’s game of wills to a statewide hot-button issue that has Democrats divided and students up in arms.

Delicate politics

The upset has taken shape as part of the educational wedge issue splitting California Democrats in recent years.

Last November’s election featured an intense battle for superintendent of public instruction between two Democrats, incumbent Tom Torlakson, who was backed by state teachers’ unions, and the challenger, reformer Marshall Tuck.

They split over the Vergara court decision that held teacher-tenure protections discriminated against poor and minority students, but which is being appealed by state Attorney General Kamala Harris, now a candidate for U.S. Senate. Torlakson took the side of the unions and supported the appeal; Tuck made sustaining the decision a keystone of his campaign.

After Torlakson beat Tuck in a close election, 52 percent to 48 percent, Democrats hoped to unite on education and put their divisiveness behind them.

But UC’s tuition hikes reopened the wound, putting officeholders in an awkward political position and pushing instinctively liberal students to oppose policies set by Democrats.

Casting Napolitano’s intransigence as part of “a delicate, carefully staged negotiating process in Sacramento,” the Times reported several lawmakers dinged the UC chief for her stance:

“Assembly Speaker Toni G. Atkins (D-San Diego) said she was ‘frustrated over UC’s latest attempt to use students as bargaining chips.’ She said that a cap at UCLA and UC Berkeley, ‘while increasing out-of-state enrollment overall, does not solve the problem. UC’s job is to educate California students, not wait list them.’ […] Senate President pro Tempore Kevin de León (D-Los Angeles) said in a statement that California students are being offered ‘a back seat’ compared to those from outside the state.”

Both Atkins and de León, noted the Times, have pushed for a big hike in costs for out-of-state enrollees and a freeze in in-state tuition. What Democrats in the Legislature have gotten for now is quite different — a cap on out-of-staters, and a freeze and a hike in costs for those in state.

Public disapproval

Voters also are balking. In a new USC Dornsife poll conducted with the Times, 57 percent of voters sided with Brown’s stance, while only 32 percent of gave the nod to Napolitano’s.

As the Times reported elsewhere, Brown “would increase UC funding by $120 million — but only if tuition remains frozen for a fourth consecutive year. Napolitano said UC needs $100 million beyond that to help pay for pensions, health benefits, salaries and other escalating costs.”

Meanwhile, students put their own dismay into action. In addition to the Santa Cruz protest, other activism broke out.

At a joint protest by students at Berkeley and Oakland Technical High School, activists used the hikes as a symbolic pretext for assailing the educational establishment in California along a whole line of grievances, ranging from student loan relief to quotas for applicants from public schools.

The proposal was immediately criticized by Brown and key lawmakers. In his 2015-16 budget released earlier this month, the governor not only didn’t give UC the funding it wanted, he signaled a readiness to micromanage UC decision-making on admissions. I wrote about Brown’s hardball here.

Now Napolitano appears to be suing for peace by giving the governor a central and starring role in shaping UC’s finances. This press release was issued by her office Wednesday afternoon.

Thee Long-Range Planning Committee of the University of California Board of Regents today (Jan. 21) voted to recommend the formation of a select advisory committee that will examine the university’s cost structure and the role of a public research university. The full board will vote on the matter Thursday (Jan. 22).

As the sole committee members, UC President Janet Napolitano and Gov. Jerry Brown plan to exchange ideas that will be informed by reports and testimony from external and internal experts and stakeholders, including UC faculty and students.

The committee, which will be staffed by representatives from the governor’s office and UC’s Office of the President, aims to generate recommendations that will help determine appropriate state funding levels for UC in the short and long term. Its first meeting is scheduled for next week. An update from the committee is expected to be presented to the Board of Regents in March.

During the course of the committee’s tenure, both Napolitano and Brown will continue to engage with state legislators about funding for the university.

Bringing a sense of frugality to UC budget, operations

Napolitano may hope she can win concessions from the governor. What’s more likely, however, is Brown forcing her to bring a sense of frugality to a university system that’s likely to resist the effort. Here’s some of my past analysis for Cal Watchdog.

By contrast, I’ve yet to read of a UC or CSU student fee hike that had such waivers. And even though they’ve been common for several years now, I’ve seen few lawmakers complain about them even though they are just as punitive as a tuition hike.

That’s finally changing. This is from a recent Sac Bee story about the fee-happy CSU system:

“They’re called ‘student success fees.’

“Running several hundred dollars per semester, these new charges have cropped up at more than half of the campuses in the California State University system in recent years to generate revenue for initiatives that improve student success and completion rates. The millions in additional funds have paid for hiring faculty, adding course sections and technology upgrades.

“They have also inspired a wave of controversy.

“Critics of the fees say they are a workaround to the tuition freeze implemented in 2012 in exchange for increased state support. … Student success fees have now been introduced at 12 of the 23 CSU campuses since 2011, as the university has turned to raising tuition and other sources of funding to offset budget cuts. Ranging from $162 per year at CSU San Bernardino State to $630 at San Jose State and Cal Poly San Luis Obispo, many of the success fees were implemented through a vote because students wanted to finish their degrees faster.”

Lawmakers object — finally — to CSU fee mania

Lawmakers have at last deduced that a fee hike is no less painful than a tuition hike.

“Last week, Senate and Assembly committees proposed giving another $95 million to $100 million to CSU next year, directly challenging Brown’s budget priorities. CSU has been asking for the additional funding boost since January, when Brown suggested an increase of $142 million, or 5 percent, for the system in 2014-15.

“But the Legislature’s proposed added funding would come on condition of a moratorium that would prohibit CSU campuses from raising or implementing new success fees for at least a year. The Senate proposal would extend the ban for 18 months, while the Assembly recommends requiring a student vote, sunset review process and an annual report on how the money is used.

“’We don’t want to saddle our CSU students with further debt,’ said Assemblyman Al Muratsuchi, D-Torrance, chairman of the Assembly Budget Subcommittee on Education.”

On principle, I don’t mind tuition hikes in a tightly run university system. Bills have to be paid. But CSU and UC are not such systems. As such, fee hikes imposed at the campus level amount to an obnoxious surcharge.