Wednesday, June 15, 2011

A Brief Primer on the Austerity Budget

We generally rely on other folks to analyze the budget at the state level, especially as it relates to public education but more generally in the current context of austerity. Instead we usually prefer to focus our attention on the UC administration and the UC regents. But so far we haven't found anything that lays out the process and timeline for the austerity measures that are going to be imposed on the UC in the near future. That's what we want to do here.

First of all, there are a couple of upcoming dates that are important. Today, June 15, marks the deadline by which the state legislature has to pass a budget. If they don't pass one by midnight, their salaries will be permanently docked, as stipulated by a new ballot measure that was approved here last November. Without getting into the boring and mostly irrelevant details of the party politics involved in these decisions, the bottom line is that the Democrats have finally produced a budget proposal, one that they can pass without any Republican votes. Included in the proposal are another series of cuts -- surprise surprise! -- including a additional $300 million of cuts to the UC and CSU systems ($150 million to each), on top of the $500 million already cut, as well as the deferment of $540 million already owed to the UC and $750 million from canceling "old school debts" (money owed to public schools?). As thosewhouseit noted this morning, these cuts will devastate K-12 and higher education in California -- both of which, as we well know, have already been decimated by massive cuts.

So, as expected, this is a shitty deal. It's austerity, plain and simple. It's not necessarily going to pass, since Governor Brown could theoretically veto it [Update Thursday 11:13 am: Brown has officially vetoed the budget plan], but what's important is the generalized agreement by pretty much all of the political elites involved in the decision-making process, regardless of their party of affiliation. In broad strokes, they are all in agreement as to what the problems are and as a consequence the solutions as well. Take a look, for example, at Brown's recent video statement on the budget.

What Brown presents in the video -- and remember, of course, the Brown is a Democrat -- is a series of austerity measures. He calls explicitly for "deep and permanent cuts to ongoing state programs" and what he labels "reforms," which refers above all to the reformulation of public sector pensions and, as he puts it, "a cap on ongoing state spending." Furthermore, the taxes that Brown is calling for are temporary.

Which brings us to the next set of important dates. July 1 is the beginning of the new fiscal year, which means (for our purposes here) that the state sales tax will decline by 1 percent and the vehicle registration tax by 1/2 percent. Governor Brown's tax proposal, then, has two parts: first, it postpones the expiration date of these taxes until mid-September; at which point, second, a special election will take place in which California voters will vote on whether or not to extend these same taxes for another five years. At worst, then, the vote will fail, and the taxes will not be extended -- this seems like the most likely outcome at this point. But what's most depressing about the whole thing is the fact that the taxes are at best temporary. In other words, the entire premise of Brown's proposal is that services provided by the state must be eliminated -- the only question is how fast the transition will be. It's not that we didn't know this already, of course. From the beginning, Brown's politics have been characterized by a commitment to austerity.

In some sense, the special election in September will have large consequences for California public education. If it fails, UC spokespeople have stated, tuition will be jacked up by another 32 percent at the beginning of the winter 2012 semester. (And remember, that's on top of the 8 percent hike that's already been programmed for fall 2011.) This would bring in-state tuition in the UC system to $15,000 a year. But at the same time, the UC administration has already made the choices that have condemned the entire UC system to privatization. The regents are incapable of making a case for public education not because they're bad speakers or because they've misunderstood the subtle details of the university system but because they don't give a shit about public education. As in the case of the $500 million already cut from the UC in the first round of budgeting, every defeat becomes the point of departure for the next one. More than just a losing strategy, we could easily read this as purposeful -- it allows the administration to continually deflect blame while moving the university toward a privatized model.

Right on cue, the UC once again trots out the same old arguments. Here's what UC spokesperson Steve Montiel told the Sacramento Bee about the Democrats' new budget, which includes the $150 million cuts mentioned above:
"We are assessing the latest proposal from the state Senate, and it's too soon to say with certainty what the impact would be. But there's no question that additional cuts would not be good news for UC and the Californians it serves. The university already has taken steps to absorb a $500 million cut, and we have been preparing contingencies in the event of an all-cuts budget. Any further cuts would threaten our ability to provide access, affordability and academic excellence."
And now, UC president Mark Yudof and UC regent chairman Russell Gould have released the following statement:
UC, like the California State University, already has taken steps to absorb a $500 million cut with substantial impacts to programs on the campuses. An additional $150 million in cuts will impair our ability to provide access at an affordable price while preserving academic excellence and allowing students to complete their degrees in a timely way. If this budget plan stands, the likely result will be a double-digit tuition increase on top of the 8 percent hike already approved for next year.
It's the usual trope -- both formulations turn on words like further and additional. What's especially revealing here is the way that Montiel, Yudof, and Gould frame the consequences of these further/additional cuts. Because the talking point of the managerial trinity of "access, affordability, and academic excellence" on the proverbial chopping block has been active since early January at the very latest, when Yudof laid out the changing relationship toward what he called the UC's three "compass points":
Yudof said the university has long operated on three "compass points" -- access, affordability and excellence.

"We are moving dangerously close to having to say: pick two of the three. That’s my view, and the excellence is nonnegotiable," he said. "We are going to have to look at access and affordability."
To return to the statement by Yudof and Gould for a second, take a look at the sentences that come right after the above quote:
And to require UC to carry a $500 million "loan" balance into fiscal year 2012-13 because the state can't provide UC with the fully budgeted allocation will only force the university to incur extra costs that are passed on to students and their parents. In addition, this budget plan poses a threat to UC and higher education in future years as it fails to achieve a sustainable, balanced budget. Without a stable, predictable funding base, our long-term quality is seriously threatened.
It's worth noting that the regents haven't had any problem with passing on "extra costs" to students and parents in the past. That's why tuition has increased 40 percent in the past two years, and 300 percent over the past decade. But what's especially interesting here is the tension between the seemingly out of place call for a balanced budget and a "stable, predictable funding base." After all, the requirement of a balanced budget is precisely the reason that these new cuts have been proposed -- according to the new ballot proposal, the Democrats in the legislature must pass a balanced budget or face a pay cut. So what they've done is cut us instead.

In the end, the "stable, predictable funding base" called for by our corporate overseers gives us the key to unraveling their odd statement. They know, as we do, that the state will never provide the kind of financial stability or predictability they seek. Yudof has long called the state an "unreliable partner" and he has been given no reason to think differently. What this statement does is begin to lay the groundwork for a full shift toward the corporate university -- the "stable, predictable funding base" that the state cannot supply will be sought elsewhere. And we all know where that elsewhere is.

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