Widgets Magazine

Stanford faces challenges of UC budget cuts

Though the budget woes of the state of California seem remote underneath the umbrella of Stanford’s multibillion-dollar endowment, the latest round of state budget cuts have hit closer to home.

In a budget proposal announced Jan. 10, Gov. Jerry Brown slashed the state’s higher education funding by $1.4 billion, $500 million of which will come from the University of California (UC) system.

(SERENITY NGUYEN/The Stanford Daily)

The move will mark the first time in the UC system’s 143-year history that revenue from student fees comprise a higher proportion of the university operating budget than funding from the state government, according to UC President Mark Yudof. The $500 million represents a sixth of last year’s state funding to the UCs. In addition to last year’s 32 percent tuition increase, UC students will face an 8 percent hike for fall 2011, bringing annual in-state tuition to $11,124.

While the UC system copes with these changes, Stanford is facing the idea that the cuts will inevitably change the numerous connections it shares with California’s institutions of public higher education.

“Our primary concern is that the long-term impact of ongoing budget cuts will weaken the great public universities in California, and this will be bad for the state, for the country and for higher education in general,” Stanford President John Hennessy wrote in an e-mail to The Daily.

For research at Stanford, the short-term concerns are limited. The collaborative research done between Stanford and the UC system is conducted in national labs operated and funded by the federal government, such as SLAC National Accelerator Laboratory and Lawrence Berkeley National Laboratory.

“Fortunately, for the area of research that I’m working in, there’s actually quite a bit of funding going to the universities now because the Department of Energy has been really successful in persuading Congress that we need to put more research funds into clean energy technology,” said Sally Benson, professor of energy resources engineering.

“It’s kind of balanced things out,” Benson continued. “Actually, in a lot of ways for graduate student research in these areas, it’s probably better now than it’s been in a long time…even though you see us struggling financially, I think that probably has a bigger impact on the undergraduate program.”

In fact, Stanford may even see short-term benefits as qualified Bay Area faculty and students could become wary of the potential decline of the UC system and therefore choose Stanford over public institutions.

“The budget difficulties at UC will probably decrease the competition for faculty somewhat, and so in the short run benefit Stanford and other top research universities,” Provost John Etchemendy Ph.D. ’82 wrote in an e-mail to The Daily. “But it would be very shortsighted to think that that is a good thing. One of the things that has made U.S. higher education so strong is the constant competition between universities for the very best faculty and students.”

Accordingly, the cuts could have more serious long-term ramifications on the future of higher education in the Bay Area. Some at Stanford have worried that cuts to the UC system could affect the general intellectual vitality of the area.

“The Bay Area is such a wonderful place, and one reason is of course that two of the best institutions are here, Stanford and Berkeley, and together they make the Bay Area the best place to study, and really the best place to innovate and also the best place to form industry,” said Yi Cui, associate professor of materials science and engineering. “If the UCs are really declining due to the budget cuts, I think that will also reduce the competitiveness of the Bay Area, which will eventually also affect Stanford University in a negative way.”

Bay Area universities, including Stanford and UC-Berkeley, are prime feeders into California’s information-based economy, home to such international players as Google in Mountain View, Apple in Cupertino and Facebook in Palo Alto. California is home to 14 percent of companies on Standard & Poor’s 500 index.

Furthermore, UC-Berkeley — the top-ranked public university in the United States — is a principal feeder into graduate programs around the country. The UCs currently guarantee admission to the top 12.5 percent of the state’s graduating high school class. However, budget cuts could jeopardize the viability of this practice, thereby excluding extremely qualified candidates from undergraduate and possibly graduate education.

“The UC undergraduate programs in the sciences are excellent, and so you see a lot of good graduate students who come to Stanford from Berkeley,” Benson said. “And so to the extent that there are less students, or those students don’t have access to labs or resources to do the laboratory experiments, that’s a bad thing.”

“Tomorrow or next month or next year it’s not such a big issue,” Benson added, “but we do want a strong UC system as a feeder into graduate schools.”

The cuts may also impact the Bay Area’s ability to remain competitive on an increasingly global research scene. As emerging nations such as China and India pour funds into their science and technology-based research and higher education, budget cuts are driving the United States in the opposite direction.

“The United States is actually in a critical time, facing international competition,” Cui said. “Our energy technology and even our information technology, it’s a really critical time for our collaboration to move forward.”

Moreover, the cuts’ effects at Stanford will reach well outside the confines of academia. For example, UC-Berkeley eliminated four varsity sports teams for the 2011-2012 season — baseball, men’s and women’s gymnastics and women’s lacrosse — in an effort to slash the intercollegiate athletics budget from its current annual $12 million to $5 million by 2014. Those teams, comprised of varsity-level athletes, could compete in club leagues, providing stiff competition for Stanford and other local schools.

However, there has been concern over the widely used term “decline of the UCs” to describe the effects of the budget cuts. Some worry that, despite the immediate difficulties, the phrase embellishes the actual consequences.

“The predicted decline of the UCs is much overstated,” Hennessy said. “Universities are resilient institutions, and the UCs have an extraordinary history of quality faculty and students. They have gone through difficult budget situations before and have not lost their ability to compete.”

  • Milan Moravec

    The leadership of University of California Berkeley has put Cal. in peril. Examples are not hard to find.
    University of California Chancellor Robert J Birgeneau’s eight-year fiscal track record is dismal indeed. He would like to blame the politicians, since they stopped giving him every dollar he has asked for, and the state legislators do share some responsibility for the financial crisis. But not in the sense he means.

    A competent chancellor would have been on top of identifying inefficiencies in the system and then crafting a plan to fix them. Competent oversight by the Board of Regents and the legislature would have required him to provide data on problems and on what steps he was taking to solve them. Instead, every year Birgeneau would request a budget increase, the regents would agree to it, and the legislature would provide. The hard questions were avoided by all concerned, and the problems just piled up to $150 million of inefficiencies….until there was no money left.

    It’s not that Birgeneau was unaware that there were, in fact, waste and inefficiencies in the system. Faculty and staff have raised issues with senior management, but when they failed to see relevant action taken, they stopped. Finally, Birgeneau engaged some expensive ($3 million) consultants, Bain & Company, to tell him what he should have been able to find out from the bright, engaged people in his own organization.

    In short, there is plenty of blame to go around. Merely cutting out inefficiencies will not have the effect desired. But you never want a serious crisis to go to waste. An opportunity now exists for the UC President, Board of Regents, and California Legislators to jolt UC Berkeley back to life, applying some simple oversight check-and-balance management principles. Increasing the budget is not enough; transforming senior management is necessary. The faculty, Academic Senate, Cal. Alumni, financial donors, benefactors await the transformation of senior management.
    The author, who has 35 years’ consulting experience, has taught at University of California Berkeley, where he was able to observe the culture and the way senior management work.

    (Cal (UC Berkeley) ranking tumbles from 2nd best. The reality of University of California Berkeley’s (UC Berkeley) relative decline are clear. In 2004, for example, the London-based Times Higher Education ranked UC Berkeley the second leading research university in the world, just behind Harvard; in 2009 that ranking had tumbled to 39th place.)

    University of California,Berkeley.

  • Milan Moravec

    The leadership of University of California Berkeley has put Cal. in peril. Examples are not hard to find.
    University of California Chancellor Robert J Birgeneau’s eight-year fiscal track record is dismal indeed. He would like to blame the politicians, since they stopped giving him every dollar he has asked for, and the state legislators do share some responsibility for the financial crisis. But not in the sense he means.

    A competent chancellor would have been on top of identifying inefficiencies in the system and then crafting a plan to fix them. Competent oversight by the Board of Regents and the legislature would have required him to provide data on problems and on what steps he was taking to solve them. Instead, every year Birgeneau would request a budget increase, the regents would agree to it, and the legislature would provide. The hard questions were avoided by all concerned, and the problems just piled up to $150 million of inefficiencies….until there was no money left.

    It’s not that Birgeneau was unaware that there were, in fact, waste and inefficiencies in the system. Faculty and staff have raised issues with senior management, but when they failed to see relevant action taken, they stopped. Finally, Birgeneau engaged some expensive ($3 million) consultants, Bain & Company, to tell him what he should have been able to find out from the bright, engaged people in his own organization.

    In short, there is plenty of blame to go around. Merely cutting out inefficiencies will not have the effect desired. But you never want a serious crisis to go to waste. An opportunity now exists for the UC President, Board of Regents, and California Legislators to jolt UC Berkeley back to life, applying some simple oversight check-and-balance management principles. Increasing the budget is not enough; transforming senior management is necessary. The faculty, Academic Senate, Cal. Alumni, financial donors, benefactors await the transformation of senior management.
    The author, who has 35 years’ consulting experience, has taught at University of California Berkeley, where he was able to observe the culture and the way senior management work.

    (Cal (UC Berkeley) ranking tumbles from 2nd best. The reality of University of California Berkeley’s (UC Berkeley) relative decline are clear. In 2004, for example, the London-based Times Higher Education ranked UC Berkeley the second leading research university in the world, just behind Harvard; in 2009 that ranking had tumbled to 39th place.)

    University of California,Berkeley.

  • alum00

    “faculty and students could become wary of the potential decline of the UC system and therefore choose Stanford over public institutions.”

    While I’m really glad Stanford isn’t turning a blind eye to the problem with the UCs, let’s be real here: Stanford is looking at Berkeley with greedy eyes, because now it will more easily poach top faculty and researchers from Berkeley, whose academic staff is easily as strong as Stanford’s. Because people who are leaving Berkeley are more likely to choose Stanford than another school (given its proximity), Stanford also realizes this is its chance to “one-up” its big competitors like Harvard and MIT. And of course, newcomers in the game are more likely to choose Stanford (not something new, but the article pointed it out).

    I don’t think that Stanford will be harmed by a lowering of overall ‘competitiveness in the Bay Area,’ because Stanford is competitive on its own (i.e. is able to attract plenty of faculty and students regardless). But it could be that Stanford students will find even better opportunities in Silicon Valley because they aren’t competing with as many top students at Berkeley.

    This is an extremely sad reality, but there’s much more good in this for Stanford than it wants to admit.

  • alum00

    While all this sucks, this might be the opportunity that Berkeley has been waiting for. Previously, the state has put tons of mandates on Berkeley (# students they must accept, faculty salaries, etc.), because the state provides so much of Berkeley’s funding. The University of Virginia, on the other hand, operates much more closely to a private school than any public school I know of in the US, and that’s because it gets less than 5% of its funding from the state. While Berkeley isn’t as rich as schools like Stanford, it is one of the richest public schools (in terms of endowment), so it is poised to make this transition more easily than most.

  • john

    The UC system can count on less and less from the state. The budget crisis will explode under Jerry Brown and the Democrat legislature. State public union employees’ obscene pensions are exploding at an unsustainable rate. Brown refuses to touch the union contracts because he is in bed with the union thugs. California is going to become a disaster over the next four years. The UC system will suffer immensely.

  • Guest

    UC Davis has been in decline ever since Katehi became Chancellor…and it keeps getting worse…now her Administration is filing criminal charges against its own students…since they can no longer physically attack their own students, they are using the criminal justice system to attack their own students….this is pathological.