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public
education
[A] tuition-free, publicly funded system that must
provide an education to each [person] within a publicly governed school system.
The academic standards, the teachers and administration, the values and methods
of operation employed are all subject to oversight and direction by public
policy-making bodies. Public education means that a wide range of decision making
resides at the community level through the operation of locally elected school
boards and through other avenues of direct [community] participation. Public
education also means a system in which the general public can obtain detailed
information about their schools.
from Center
for Public Education, “An American Imperative, Public Education”
privatization
The transfer of ownership of property or business from a government [or a public entity] to a
privately owned entity. One of the main arguments for the privatization of
publicly owned operations is the estimated increases in efficiency that can result from private ownership. The increased
efficiency is thought to come from the greater importance private owners tend
to place on profit maximization as
compared to government, which tends to be less concerned about profits.
from Investopedia,
“Privatization”
campus
real estate and capital projects
We continue to invest in our revenue generation and
expense reduction efforts… A primary motivation for utilizing PPPs [Public
Private Partnerships] is access to capital. UC, however, has robust financing
capability… As we continue to integrate capital needs into our operating
budget, we recognize that each dollar the campus devotes to capital is one less
dollar we have for student aid, faculty pay, campus maintenance, or a myriad
other needs… External funds, student fees, and auxiliary funds comprise the primary
sources of capital for new construction… An aggressive and entrepreneurial
approach to Real Estate operations and revenue can significantly improve our
bottom line.
from UC Berkeley Real Estate Department, “Public
Private Partnerships at the University of California”, “2013-14 UC Berkeley
Budget Plan”, and “The Evolving Real Estate Portfolio at Cal”
The
University of California has signaled an aggressive shift toward privatization,
taking many simultaneous forms: increased “revenue generation” in the form of selective
tuition hikes and Real Estate investments, decreased compensation for UC
workers and/or hiring temporary workers as an “efficiency” measure, and leasing
public land to private developers with “Public-Private Partnerships.” The
following analysis examines how Governor Brown’s recent budget proposal further
enables each of these processes.
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On
May 14, Governor Brown announced a revised budget proposal, which will be the
subject of discussion at the Regents’ meeting on Thursday, May 21. While the
budget proposes a two-year tuition freeze for in-state students, put in
context, the proposal as a whole presents a concerning advance toward
UC privatization.
Tuition
Hikes: One Source of New Revenue Generation
2014-15 UC tuition levels:
in-state
tuition and fees: $13, 878
out-of
state tuition and fees: $37, 902
2020-21 projected UC tuition levels:
in-state
tuition and fees: $16,869
(assuming
5% annual increase starting in 2017)
out-of-state
tuition and fees: $60,146
(assuming
8% annual increase starting in 2015)
In
reality, the tuition “freeze” for in-state students is only a
two-year deferral of hikes already built into the plan. Beginning in 2017, the
cost of attending UC for California residents will rise by at least the rate of inflation, a very
open-ended figure that will enable to Regents to vote on increases above this
rate in order to generate maximum profit. This subtle phrasing turns out to be
quite significant: as our economy continues to recover from the 2008 real
estate crash and subsequent global financial collapse, the U.S. inflation rate
this past year was actually negative, averaging -0.1%. If the cost of attending
the UC were actually pegged to inflation, there would be a tuition reduction this year—not likely in an era
of privatization.
While
we don’t yet have a clear picture of the actual rates of increase for in-state
students, we do know that beginning this fall, out-of-state and international
students would be subject to up to 8% annual increases indefinitely. This hike
will bring their cost for a UC education to up to $60,146 per year just five
years from now, a 59% increase in the current cost. The relative profit
generating potential of non-California students provides a structural incentive
for UC to accept more out-of-state and international undergraduate students who
can afford to pay this high price. UC President Janet Napolitano
confirmed
this preference when she proposed an increase of out-of-state enrollment as UC
“campuses have been instructed to keep their enrollment of California students
flat…If we wanted to, we could make Berkeley and UCLA 50/50 (resident and
nonresident), easily, just by snapping our fingers. The demand is that high.”
But
with a looming sticker price of $60,000+ before even factoring in the
ballooning cost of living in California, can the UC just “snap” non-resident
students into ponying up? What will they receive in return for this high
sticker price?
Rationing
Education
Equally
concerning is the Regents’ plans to reduce the time-to-degree to three years. This
reduction may seem appealing at first blush for middle and working class
students who often take multiple jobs while in school to reduce their education
debt. And with the Governor’s proposed $18 million cut to the Middle Class Scholarship Program, poorer students will
likely welcome spending less time at the UC.
According
to Reclaim UC, “The reduction of time-to-degree is presented as
a solution to a problem that would not exist absent university privatization.”
In other words, the shortening of time at UC Berkeley is appealing only in a
context in which students cannot afford to stay on campus for very long. In
addition to loading up on summer courses, some analysts speculate that this reduction in time-to-degree would be accomplished by eliminating core
undergraduate curricula, which would starve many departments that depend on significant student enrollments
in lower division courses of critical funding. It increasingly seems as if the
UC Regents and the Governor imagine a very narrow range of majors within an
overall college education that does not include foreign language courses; coursework
in ethnic studies, sociology, gender and women’s studies, and anthropology; or education
in art, literature, or music, to name only a few of the likely programs that would
succumb to such a restructuring plan.
We
instead call for increased funding to these departments, whose classes are
typically over enrolled and in high demand. Increased financial support would
enable them to hire additional full-time professors and offer more and smaller courses, moving
the UC away from the mega-class model it has instead forced on many students, faculty,
and GSIs. Can the UC continue to offer quality, affordable, and accessible
education, where students will be able—and will even want—to pursue their educations at a more reasonable pace?
Why
would the University pursue three-year degrees? What is in it for them? One analysis might connect the shorter
stay on campus with students’ diminished institutional memory and capacity to
form meaningful political associations that might challenge the process of
privatization. And students aren’t the only ones who will feel this squeeze.
How
the Budget Impacts UC Workers
Perhaps
the most egregious part of the budget contains a significant blow to
workers’ retirement benefits, which has recently taken the form of forcing new
employees into separate and less secure pension plans or “tiers.” That the
Governor has recommended the creation of yet another tier with significantly
reduced retirement benefits signals very deep structural concerns within the UC
system. In addition, we have seen a dramatic undermining of union contracts,
where the UC in increasingly hiring underpaid temporary workers and denying
them benefits that typically come with UC employment. The
UC is now cutting very basic mechanisms of support—this is what they mean when
they say “efficiency”—while increasing tuition in perpetuity—we are the
“revenue generation”—leaving us to ask if not on education or staffing, then where
is the increased profit going?
UC
Berkeley’s Real Estate Department: The New Face of Privatization
These
changes in tuition, education restructuring, and cuts to workers’ benefits are
happening alongside another very aggressive and relatively novel dimension of
privatization. This marks a radical shift in the UC’s role as an institution of
higher education to a large real estate development and investment firm.
Following the expansion of Berkeley’s Real Estate Department and the formation
of “The Berkeley Real Estate Management Company,” this unfortunate situation is
not hyperbole.
The
cost of renting a shared room in one of UC Berkeley’s large multi-story
dormitories is currently approximately $15,000 per year, the fifth costliest student
housing in the nation.
And what do students get for this exorbitant price? This description by an
undergraduate resident in Unit 2 is telling:
I am typing this in a boxy, stuffy, fluorescent-lit
room in Unit 2…[I]magine living in a hotel room for months—it gets depressing.
These walls, this furniture and these windows are all but personalized. You can
tell from their very essence that they are meant to last past you and past the
person who will pass you…I simply cannot adjust to a living residence monikered
“Unit 2.’” The very name makes me feel like I am living in a cookie-cut
cubicle. I realize that I am just a trivial life in one of the many windows
that fill the walls of Unit 1, Unit 2 and Unit 3…These dormitories make me feel
inauthentic, average and every other sad adjective you can imagine…I wonder
what feeling indistinguishable will do to my self-image when I step out into
the future.
We
should be appalled that students are paying such high prices to live in
anonymous concrete boxes. Who would build such things? The answer is that
UC has been contracting these types of construction projects to private firms
owned or managed by friends of a new class of UC administrators, such as Bob Lalanne, founder
of the SF architectural firm Lalanne Group and now Vice Chancellor of Real
Estate at UC Berkeley. These kinds of private business deals have seriously
indebted the University to the extent that it can no longer borrow money to
support core functions: we are now running an approximately $15 billion
deficit, up from about $1 billion just over a decade ago. At the same time, these
construction projects reap immense profits off of students and tenets, profits
for which there is no obligation to spend on education. This is the new face of
UC privatization.
Why
Is This Happening and What Do We Do about It?
This
shift towards UC Real Estate speculation has largely taken place under UC Regent Richard Blum, Chairman of the world’s largest Real
Estate development firm, CB Richard Ellis. Since his arrival on the UC Board of
Regents, the University of California has enabled him cheap access to public land for private development companies. Blum
is an expert in preying on indebted public
institutions
like the US Post office or the University of California, forcing the latter to construct buildings it cannot afford. In the process, Blum helps create real estate bubbles through rapid development and
gentrification, and after these bubbles burst, as they did in 2008, Blum and his allies reap
profits again buying up cheap land, leaving many in debt and displaced.
The
face of UC privatization is multi-faceted in 2015. We need not only to resist
tuition hikes across the board, but also address the corruption embedded in real
estate development and support campus workers who are fighting to reverse their
own impoverishment. As long as administrators continue to call the UC a “public”
school, we need to be here to hold these individuals accountable to the public.
