University of California System Spending Big Money on Salary Boosts

Nothing new here: Officials spend extra taxes on themselves.

A number of years ago, I wrote about a California pest-control agency that had lobbied taxpayers to raise their property taxes to help fight a scary stinging insect called the red-imported fire ant. The extra dollars, officials said, were needed to halt an emerging threat to public safety. Shortly after voters complied, the agency significantly boosted compensation for its employees.s

After that episode, I was hoping more Californians would embrace the words of that old song by The Who: "Won't get fooled again." Yet, the same dynamic goes on endlessly, as agencies insist they lack the funds to provide needed services. But their spending often is far less than public-spirited.

The latest rendition involves the University of California system. One of the nation's premier universities, it has nearly 20,000 faculty members and 195,000 employees at its campuses and medical centers. It's funded in part through tuition and taxpayer dollars.

In November, the UC's governing board (regents) gave tentative approval to a 27.6-percent tuition increase over five years, arguing that the boost was necessary to assure a top-quality education. Gov. Jerry Brown opposed the hike, arguing the system could improve efficiencies. The university's demand was a ploy to convince political leaders to give the system more money.

Ultimately, the governor negotiated a deal with UC President Janet Napolitano. As part of the budget, the university gets a 4-percent general-fund spending increase and a large contribution toward its underfunded pension system and some other things. UC agreed to freeze tuition for two years for in-state students while hiking tuition for out-of-state students.

But the university quickly made its priorities clear. Last Thursday, regents hiked salaries by 3 percent for its top-paid executives. The new salaries range from $231,000 to $991,000. In solidarity with a labor-union campaign to boost the minimum wage across the country, regents approved a $15 minimum for all UC employees – including part-time workers and contractors.

The net cost: $14 million a year. "The University of California's mission statement proclaims that one of its fundamental missions is teaching and creating 'an educated workforce that keeps the California economy competitive,'" noted Assembly Republican Leader Kristin Olsen of Modesto, in a July 22 letter to Napolitano. "How does your decision today help California students achieve this mission?"

That's the key question whenever government-supported entities use new funds to boost salaries rather than invest in services for their"customers." I'm sure the new salaries will help students as much as the pest agency's compensation boosts helped stamp out the fire ant.

Olsen spokesperson Amanda Fulkerson said UC officials sat in legislative offices during a year of negotiations and never mentioned the planned salary increases: "Shouldn't this have been mentioned? It's indicative of how this new UC president has done business and it hasn't sat well, frankly."

While Fulkerson is on point, it wasn't hard to guess what would happen with a cash infusion. Last September, the San Francisco Chronicle reported the UC regents "gave 20 percent raises … to their lowest-paid chancellors – with some regents expressing regret that they could give so little." These employees receive more than $380,000 a year.

A 2009 article in the People's Vanguard of Davis (home to UC-Davis) was titled: "Inexplicable UC Executive Pay Bonuses Draw Fire Once Again." In 2008, a Democratic assemblyman introduced a bill to freeze UC executive pay after he became "fed up with large pay raises,"according to a Union-Tribune article. It was a similar refrain in 2006, with newspapers reporting UC regents retroactively increased pay and perks for executives.

One of my favorite, albeit dull-sounding, economic ideas is called "Public Choice Theory." Basically, it argues that people who work in bureaucracies share the same goals of self interest as anyone else. So when a bug-killing agency or a university begs for more money to help you, you should have little doubt its officials will first help themselves.