“The sign-up sheets didn’t have a column for students”: Mark Yudof and the UC Regents = Sacramento

by zunguzungu

One of the myths about the UC system crisis is the idea that “Sacramento” is the real villain, and that protesting the UC administration is a waste of time. The legislature is the actual problem, people say, because they‘re the ones who have allocated less money to the University system. Instead of occupying the Office of the President of the UC system, such people argue, students should really be protesting politicians in Sacramento.

This seems to me to be both wrongheaded and misinformed. The president (and the regents who appoint him) are Sacramento, while the university community itself has not only had very little role in the massive top-down restructuring of the university that got under way in July, but they have been quite actively shut out of it, by the Regents and by President Mark Yudof, who are doing the job Arnold Schwarzenegger appointed them to do. Which is to say, when students from the university protest against the regents and the President, they are protesting Sacramento. The legislature in Sacramento may have created the problem by cutting funding for higher education, but it’s the representatives and appointees of our Sacramento-based governor who have turned the problem into an opportunity to privatize higher education in California.

This is an important point, because — and this needs to be emphasized — the scandal of the administration’s conduct is not the fact that they’re cutting services while raising fees, at least not in and of itself. In bad economic times, some kind of response is necessary. The scandal is that Mark Yudof and the regents are using the crisis of the moment to push forward a plan to privatize the UC system that has long been in the works and is geared to be permanent. And they are doing it by assuming “emergency powers” which allow them to arbitrarily overturn the precedents and policy that would otherwise explicitly prevent them from doing so, everything from caps on the amount that student fees can be raised to the contracts they’ve signed with university employees to the “Master Plan” for higher education that the state of California established fifty years ago. So if we want to talk about “Sacramento,” then let’s do so. But we need, then, to talk about two things: first, how the Republicans that run California through the governor’s mansion have been trying to privatize the state’s public education for a very long time, and, second, how the regents and Mark Yudof have been using the rhetoric of “crisis” to push that agenda through, bit by bit and step by step, replacing the UC’s traditional system of shared governance with a system of top-down corporate management.

“There is a saying, ‘A crisis is a terrible thing to waste,’ and that is my view”…some things we probably should have done 10 years, five years, 20 years ago may get done when you have a crisis.” (Mark Yudof, May 8, 2008)

But who is Mark Yudof? And who are the Regents of the University of California who appointed him? You can check out their bios here, but I’ll give you the rundown as I‘ve pieced it together. There are 26 official regents who can vote, one of which is a student. But while they always list the student regent first to emphasize campus representation, don’t kid yourself: that student (Jesse Bernal) may have voted against the fee increase on Nov 19th, but he was the only one who did so. That’s how well represented the students are. And in any case, it’s the regents themselves who select and appoint that student for his or her one year symbolic position. At the same time, it seems less symbolic that the chair of the committee who selected next year’s voting student is Regent Paul Wachter, “the founder and Chief Executive Officer of Main Street Advisors [a financial advisory firm which] provides a wide range of financial, strategic and asset management advisory services to a select group of high net worth individuals and companies.” While not a representative of the campus community, he is however completely characteristic of the regents as a whole: instead of the university system itself, they overwhelmingly represent the private sector.

It is therefore important to notice that Wachter is only one of the eleven out of eighteen regents that Schwarzenegger appointed to twelve year terms (plus two more who will be replaced by Schwarzenegger before the gubernator’s term of office is over). Of the remaining seven voting regents, one of them is Schwarzenegger, one of them is Mark Yudof, and the others are the state’s Lieutenant Governor, the Speaker of the Assembly, the Superintendent of Public Instruction, and president and vice president of the Alumni Associations of UC. Since a voting majority of the Regents were directly or indirectly appointed by Schwarzenegger, all the lines of authority here lead you back to the governor’s office in Sacramento, a place where — and this may shock you — the idea of a public institution of higher learning is not held in great regard.

And that’s what at stake here. As Keep California’s Promise nicely put it, “the debate over higher education should not be framed as a debate over how to allocate scarce state resources during difficult times, but as what it actually is: an ideological debate over the nature of higher education.” I agree.

While higher education policy in California has traditionally been guided by the Master Plan for Higher Education, the assumption guiding that document — that the state had a responsibility to educate the state’s citizens — is being steadily replaced with the idea that the university systems are on their own, that the necessary money will be provided if it is available and if it is not, then tough luck. As Keep California’s Promise notes, this shift was first explicitly codified in 2004, when the UC signed an agreement (Higher Education Compact) with the governor to shift its revenue structure away from the state general fund and onto private sources (such as, for example, student fees). In short, compromise a little on the principle that the state was responsible for all the university’s core functions, and get, in return, the promise that state funding cuts would be, if substantial, at least predictable. This was a compromise that happened under a certain amount of duress: Schwarzenegger was threatening massive cuts, and since budget minded officials saw the present crisis coming, they thought that the Compact would protect the UC and CSU systems from larger cuts in the long run if they compromised in the short term. Had this held true, it might have been a wise decision. But it hasn’t; as KCP puts it, “when the budget crisis came in 2008, Governor Schwarzenegger simply walked away from the deal.”

But the larger issue is simply whether or not the state has a responsibility to provide for the core functions of the university. The 2004 compact committed the university systems to “maintain quality” by “seek[ing] additional private resources and maximize other fund sources available to the University to support basic programs,” the first time the general principle was accepted that the state’s public university system would have to look elsewhere than public coffers for its “basic” needs. Private sources of income and student fees used to be peripheral to the system’s revenue structure, which were to rely on state funding to do the job the state gave it to do. Such sources of income are now, according to the compact, to become increasingly central, which means the university system will be less and less beholden to a public mission (educate students) and more and more beholden to the bottom line.

This is also what is known as “privatization.” The real question is whether California higher education is a public good, a public trust, and a public responsibility, or whether it’s simply a private good to be paid for by its customers. We’ve learned what Schwarzenegger’s answer to that question is. And Mark Yudof has pretty consistently indicated that he has the same answer. Here, for example, in one of his many “no, I really am pretty much as bad as my critics say I am” moments, Yudof admits that educating students is not the “business” of the university:

“Many of our, if I can put it this way, businesses are in good shape. We’re doing very well there. Our hospitals are full, our medical business, our medical research, the patient care—so we have this core problem, who’s gonna pay the salary of the English Department? We have to have it, who’s gonna pay it and Sociology, and the humanities, and that’s where we’re running into trouble.” (Mark Yudof, November 20, 2009, via EotAW)

If you wanted to give Yudof the benefit of the doubt, you could say that he’s simply the man in the middle; Sacramento is cutting funds, and as the UC president, he has to deal with that somehow. There is a small bit of truth to this: while the public university system has a few profit earning sectors (medicine, to hear him tell it), it is also true that teachers have salaries which have to be paid somehow. But since when were public universities in “business”? Since when do you start with the portions of the university which hire themselves out to private corporations and then complain that the English department hasn’t done the same effectively enough? If your basis for comparing what works and what doesn’t about the university is profitability, then you’ve basically conceded the argument over privatization from the start.

It now becomes appropriate, then, to note that Yudof has done exactly this. His vision of the university can be found in an article he wrote for Change magazine in 2002 (Higher tuitions: Harbinger of a Hybrid University?”), in which he made predictions that he himself would eventually be empowered to fulfill:

“for the foreseeable future, public research universities will look to students to pay more of their educational costs. These students will be part of what has been dubbed the hybrid university, an institution with many traditions and functions still within the public realm, but with other characteristics that are more in line with those of private colleges and universities.”

This is, of course, a self-fulfilling prophecy. Every time the UC system finds new sources of funding for state cuts, it encourages the state budget makers to believe that those cuts were acceptable, and suggests to them that more cuts are possible. And while Yudof and the chancellors talk a good game about how “we” need to stand up to “Sacramento,” they fundamentally undercut their own argument when they start with the presumption that Sacramento will do whatever it pleases, that it has no responsibility to fully fund higher education. When Schwarzenegger  broke the compact he made with the UC system in 2004, he paid no political cost for it, partly because people like Yudof had conceded years ago that the state would and could cut funding whenever it pleased. It’s hard to ask for more money, after all, when you’re already on record talking about the inevitability of less money.

This is why it’s important to remember that Yudof was appointed by Schwarzenegger, the man who wrote the budget. Yudof is Sacramento. He was hired precisely so that he would never actually stand up to Schwarzenegger in any meaningful way. And why should he? He likes to talk about how he’s a lawyer from Philadelphia who got into education by accident (here and here), so why would anyone expect him to put the good of California students above the wishes of the people who appointed him to his position? I certainly don’t. 

But this just underscores why the rhetoric of “crisis” is so pernicious. For although it’s true that the state’s finances are bad right now (and if you want to understand why that is, a good place to start is Louis Warren’s account of how a minority of republican legislators have held the state’s finances hostage), the current recession is only making an already very bad situation much worse. The UC system is not beset by a sudden, unexpected crisis; what is happening now has been going on for years, long before the current recession hit, and the system has become insolvent because its fiscal stability has been basically undermined from within. Yet while the current recession can be expected to subside eventually — the crisis of the moment will pass — the actions being taken by the regents are not temporary responses to a temporary crisis but are fundamental, permanent restructurings of the university system as a whole. In other words, if this were simply an “emergency” our economy would eventually return to normal, but our university system will not.

Which is why we need to very carefully distinguish between “emergency” and “insolvency,” and as the CUCFA argues here, the situation is the latter:

“The proper analogy is to enterprise insolvency. Indeed the Regents are a corporation with a special relationship to the State to administer the public trust that is the University of California. A corporation that can’t pay its bills can reasonably ask employees (and then other creditors) to accept payment at a discount rather than shutting down. The next step is bankruptcy, which takes place under court—and public—supervision. When this happens, stakeholders are entitled to know what other resources the enterprise has, and to demand that all these resources be made available to resolve the situation. A bankrupt enterprise cannot say, as President Yudof has recently done, that “It’s important not to take money from enterprises that are really entrepreneurial.” A bankrupt enterprise loses the autonomy to protect its profitable parts.

“It thus makes no sense to talk about prolonging a crisis of solvency such as UC faces. To the extent that financial “emergencies” are prolonged, they open the way for huge windfalls (salaries and bonuses) in the still-profitable parts of an enterprise, and create an incentive to drain resources from the money-losing parts, which in UC’s case is public higher education. UC has all-but-said that this situation will be its new normality by proposing a renewable financial emergency. This would be like slow-motion bankruptcy – without supervision to protect the rights of stakeholders, and without the need for eventual restructuring and liquidation of activities that remain profitable.”

However, declaring a fictitious “emergency” gives Mark Yudof a free hand to do what he and the people who appointed him have wanted to do for years, while simultaneously avoiding the accountability and oversight that something like declaring bankruptcy would necessitate. When a business has been so mismanaged as to have become basically insolvent, after all, bankruptcy is the process by which you remove authority from the managers who have driven it into the ground. What is happening instead is the reverse: after Sacramento has dismantled the public university’s finances, the people they’ve appointed to run the ship they’re sinking declare a fiscal emergency to grab the authority necessary to finish the job. They’re using the problem they’ve created as cover for finishing the job. As the Cog noted, here’s something distinctly Norquistian about the sight of a state government shrinking the university’s public function until it’s small enough for the regents they appoint to drown it in the bathtub.

As the UC Santa Barbara faculty senate argued (before calling Mark Yudof a “cynical opportunist”), emergency powers are not only unnecessary, but they also can have only exactly this purpose: “to free UCOP’s hand to undermine longstanding institutional structures, like faculty governance, and to circumvent financial obligations to faculty, staff, and students.” Faculty governance is a particular point of pride in the UC system; as the UC’s own website crows, “For more than a century, shared governance between the Board of Regents, the systemwide president and the faculty has ensured the highest standards of excellence.” But the vote to endow Yudof with emergency powers undoes that, meaning that the power to set priorities for a public institution is being vested in the 26 appointed regents and the President of the University, who they appoint.

When the Regents of the University of California declared a fiscal emergency and endowed UC president Mark Yudof with emergency powers (the minutes of that meeting here), for example, the specific issue was faculty and staff furloughs — which are unilateral salary cuts by another name — but what was really at stake was the authority of the Regents to essentially conduct a massive restructuring of the university’s functioning and finances, and to do so without oversight from anyone but the regents itself. The idea that a requirement to “consult with faculty, campus leaders and other UC officials” somehow limits Yudof’s powers should fool no one (though it apparently fooled Yudof), since the action to amend standing order J1: “clarifies the President’s authority to implement furloughs and/or salary reductions, consistent with applicable legal requirements, on terms that the President deems necessary, for some or all categories of University employees, upon a Declaration by the Regents of Extreme Financial Emergency.”

The Council of UC Faculty Associations challenged the legality of the declaration on procedural grounds (you can read their challenge here), and at that meeting, CUCFA President Robert Meister argued that:

“You can’t declare a financial emergency today without violating your own rules. Adopting J1 [the power to declare a financial emergency] violates the 30 day notice requirement for amending By-laws (By-law 130). And you can’t adopt J2 [the declaration of emergency itself] without following the stepwise procedure required by J1, which can’t begin until J1 is adopted. Procedural objections were first raised by the Academic Council’s letter (of July 8); we hired a lawyer to find out how bad they are, and now you know.”

But the motions passed anyway, as Meister reported: having not provided the required thirty days notice of their intention to amend the by-laws, the regents instead amended the motion for declaration of emergency to also waive that pesky rule. In short, they changed the rules and then, when challenged on the legality of how they were doing so, they also changed the rule that was getting in the way of changing the rules. As Robert Meister put it at the time, “today’s action comes down to saying that Regents have the “inherent power” to impose furloughs if they run out of money, and that they have chosen to do so.” But when the regents were appointed by the people who wrote the budget, why are we surprised?