California, with 31.5 million residents, is more than one-half
again the size of the next largest study states, Texas and New
York. It is also the most diverse state, with close to one-third
of its population from non-Caucasian groups. Hispanics are the
largest and fastest growing minority. The Asian-American population
is also growing rapidly. Four out of every five new Californians
in the 21st century will be either Hispanic or Asian-American.
Shortly after the turn of the century, a majority of all Californians
will be other than Caucasian.
The state is now recovering from one of its worst recessions since
1929. Between 1990 and 1994, California lost 868,000 jobs, equivalent
to firing the entire work forces of Nevada and Alaska. More than
43,000 businesses went under. California's recovery from the recession
has been slower than elsewhere in the United States, due primarily
to a relatively high unemployment rate, more low-paying and fewer
high-paying jobs, a slippage in educational levels of some segments
of the labor force and growth in the younger, non-working population.
California voters have not made it easier for policy makers to
cope with these challenges. Proposition 13 reduced local property
taxes overnight by 57 percent and effectively destroyed the power
of local government to raise ad valorem taxes. Hard on the heels
of Proposition 13 came other initiatives indexing the income tax
and abolishing the state inheritance tax. Next came Proposition
98, requiring at least 40 percent of general fund revenues to
go to public schools with part set aside for the California Community
Colleges (CCC). Six-year term limits for the Assembly and eight-year
limits for the Senate were passed in 1990. In 1994, voters passed
a "Three Strikes" initiative, which placed additional demands
on the state general fund. In addition, recent legislation has
allowed people whose taxes were frozen at 1975 values to pass
their homes on to their children without reassessment. In 1996,
voters passed a ballot initiative to end all use of race or ethnicity
in admissions support programs or related services. Many believe
this initiative will exacerbate existing disparities between high-
and low-income families, already the worst in the region.
Along with its problems, California has impressive strengths.
The size of the state economy is equal to those of Argentina,
Mexico, and Australia combined. The civilian labor force dwarfs
that of Canada. California has more new and fast-growing companies
than any other state, nearly double its closest competitors. Its
agricultural industry is over 50 percent larger than its nearest
U.S. competitor, Texas. California also has the nation's largest
manufacturing base with particular strength in aerospace and electronics.
In Table 1, which summarizes information about the "golden state,"
California's problems and promise are evident. The state has the
most highly educated population among the seven study states.
A somewhat higher percentage of New York residents hold graduate
and professional degrees, but even in this category, Californians
are a close second. At the same time, California has a young population,
less likely to speak English in the home. The per capita income
is only average and the potential tax revenue per student is less
than in other study states.
Contextual Variables for California Compared to Selected States (Numbers in Parentheses Represent Rank Among the Seven Study States) |
||||
(1-2) |
(3-5) |
(6-7) |
||
| Population (in Millions) (1995) | ||||
| Per Capita Income (in Thousands) (1995) | ||||
| Potential Tax Revenue (1995-96)*? | ||||
| New High School Graduates per 1,000 Population (1995-96)* | ||||
| Role of Private Higher Education§ | ||||
| Role of Governor* | ||||
| % of Population with Associate Degree (1990) | ||||
| % of Population with Baccalaureate Degree (1990) | ||||
| % of Population with Graduate or Professional Degree (1990) | ||||
| % of Population 24 Years Old or Younger (1995) | ||||
| % of Population that is Anglo (1990) | ||||
| % of Population Who Do Not Speak English in Home (1990) | ||||
| % of Population in Poverty (1994) | ||||
| High School Dropout Rate (1992 to 1994 Average) | ||||
| * This figure is expressed as an Index: National Average = 100.
Sources: Unless otherwise noted, data are drawn from Chronicle of Higher Education Almanac 43, no. 1 (September 1996), pp. 42-44. |
||||
By summer 1996, higher education was entering the second year
of a four-year compact with the Governor providing a four percent
general fund increase each year, along with a provision that student
fees could be increased by ten percent. Already the Governor had
"bought out" one year of student fee increases with an additional
$57 million of state appropriations. A senior CSU official told
us, "As the economy turns up in California, faculty are saying,
'See, we told you if we would just wait, things would turn around.
Higher education survived the depression without any changes;
no faculty were dismissed.'" A senior member of the legislative
staff told us that during the recession, there were some opportunities
to look at new ways of doing business, at new ways of working
together for higher education. He said he was worried that now
that the pressure was off because of two good budgets, people
will go back to business as usual. In higher education, he added,
there is also a feeling that "We've always done well." He said
that such complacency could be problematic for California in the
future.
For most of our respondents, the budget crisis was already a receding
memory. We were told by several sources that a constitutional
revision committee now at work in the state would make no important
changes to either the University of California (UC) or California
State University (CSU). Concerns that did surface focused more
on the degree to which the state had tied its hands through public
initiatives such as the "Three Strikes" legislation and the need
to enhance student aid to prevent California from becoming another
"Arkansas or Mississippi."
While no one we spoke with disputed the power of the Master Plan,
most see problems in its current application. A Democratic senator
described the plan as a classic "Great Society promise with its
assumption of an unending cornucopia of funds." He added, "That's
dead." A California Postsecondary Education Commission (CPEC)
official described the difficulties of planning when all of the
issues that might be addressed are enshrined in the Master Plan:
"It is difficult to have policy discussions with the Legislature
and the Governor. Everything is dominated by the annual budget.
Considerations are short-term. There are no long-term issues raised."
In the past many legislators have been supportive of higher education
because they were present at the Master Plan's inception and bought
into its assumptions. As term limits separate these legislators
from political life, there will be more questions about the investments
the state is making in higher education. The new slate of legislators
may be more willing to raise difficult question. A senior UC administrator
who sees problems with the interface between higher education
and state government argued that the amount of executive and legislative
attention to education has been minimal. "There is a strange and
small collection of entry points to the Governor's office," he
said. "What would be more useful would be more direct attention
to higher education from the executive arena of state government."
California has a constitutionally strong Governor whose influence
on higher education is pivotal. We were told by a legislative
staff member, "The Governor really runs the show. Between the
power of budget and the power of appointment, there is no one
else who has his influence over higher education."
The actual influence of recent governors has not equaled their
potential influence. The last Governor to have changed higher
education in significant ways was Pat Brown (Governor from 1959
to 1967). Most of those we interviewed from the higher education
community told us that the current Governor, Republican Pete Wilson,
is not interested in higher education.
Some disagreed, however. A senior CSU staff member told us, "While
Governor Wilson is not visionary or passionate, he is firmly committed
to certain goals and is a very pragmatic person. Where there is
an intersection between what CSU is attempting to do and his goals,
the Governor will provide leadership and support." A Senate staff
member said, "Each Governor has had an issue that he has been
somewhat exercised about. For Wilson, it has been affirmative
action." And while staff members in the Community College Board
of Governors' office described the Governor as "remote and unreachable,"
our interview with a member of the UC Board of Regents was delayed
for two hours because he was in the Governor's office. Later,
while we were conducting the interview, the regent received a
telephone call from the Governor.
Some of the differences in assessing the Governor's interest in
higher education relate to a changing political environment. Until
1994-95, both the Senate and the Assembly have been Democratic.
Governors have been Republican. Despite differences in political
parties, a Governor's veto has not been overridden in the funding
process for higher education during the last 13 years. A legislative
staff member described the way the process has worked: "If you
have the Governor, the Regents and the heads of the systems agreeing,
the Legislature is left as a minor player. The Governor makes
agreements and deals about UC funding levels and seems to be on
the same path for CSU." The use of budgeting as a process for
striking agreements between the Governor and system leaders represents
a different and more market-oriented approach to system management
from the program-oriented interventions of the 1960s and 1970s.
Heavier reliance on market forces seems attuned to a political
environment of term limits in which state legislators do not have
an extended opportunity to learn about California's highly complex
and extremely change-resistant system of higher education.
A state senator told us that the Legislature looks at higher education
as three public systems and develops stereotypes to make them
easier to deal with. He thinks term limits would exacerbate the
use of stereotypes as legislators would be placed in decision-making
roles without the basic understanding that comes with serving
as a member of a committee. A colleague in the Senate, leaving
because of term limits, described his departure as "not a problem"
because California has a self-contained system that really runs
itself. He predicted the Legislature would deal with only the
"hot-button ideological issues," adding, "The real policy issues
are complex and require deliberation. The Legislature will be
unable to deal with them."
A former CPEC official told us that term limits had already had
a massive effect on higher education, since "old timers" with
experience have gone or will go, leaving no legislators with the
long-term knowledge of higher education. He added, "New members
have only a limited time to make a name for themselves and higher
education is not a legislative career ladder." A Senate staff
member told us it may take eight to ten years to get pieces of
legislation passed. Because term limits will eliminate the necessary
persistence by individual legislators, the role of the Governor
will be strengthened. A key member of the Assembly who has been
associated with significant higher education reform initiatives
was even more emphatic: "The California system is complex. It
is a tough system to master. The texture of the influence structure
has been shattered by term limits. Bureaucrats and lobbyists have
been profoundly empowered."
As concern about the impact of term limits rises, there is heightened
interest in appointments to governing boards. A former UC executive
told us the Governor had two appointments to the UC Board of Regents
within a month and that it was highly unlikely the Democratically
controlled Senate would approve either. In the previous history
of the system there have been only two instances in which the
appointment by a Governor was not confirmed. Current resistance
to gubernatorial appointments is also seen as a protest against
such controversial actions as the Regents' vote ending affirmative
action within the UC system. (The Regents voted to end the use
of race and ethnicity as a criteria for admissions and hiring
decisions in the summer of 1995.)
Shifting political philosophies, uncertainties about term limits,
and a highly autonomous system contribute to a political environment
that sends few clear messages to higher education. When asked
about what political leaders want, a legislative staff member
said, "There are the classic answers of quality and access. Access
tends to be important primarily because of anecdotes they hear
from constituents who are unable to get into one of the colleges
or universities. Quality may be less important." An influential
assemblyman told us, "The system is going through profound change.
To whose view should higher education respond, mine or my fundamentalist
right-wing colleague?" He described the clash as national in scope
and a defining moment for society. Under such circumstances, it
is not surprising that many describe the higher education community
as "fractionalized and lacking clear vision with everything highly
politicized."
When expectations or priorities do surface, they tend to cluster
around promises built into the Master Plan even though many agree
that the fundamental assumptions built into the plan no longer
apply. A Democratic senator described access as the key priority
and included in that definition student progress through the system.
His second priority was economic development, particularly through
research functions, and his third, quality of instruction. He
also emphasized the need for a closer relationship between higher
education and the K-12 system.
In the minds of many, the Master Plan deliberately isolated higher
education from politics. Based on more than 30 years of experience,
few in the policy community believe that change will occur without
executive and legislative leadership that defines the changes
that are needed and the outcomes for which systems will be held
accountable. As we were told by a legislative staff member, you
can't have it both ways, so the Legislature has reacted by "letting
higher education run as long-as it doesn't cost too much money
and stays out of the way of the Governor and the Legislature."
State political, business and civic leaders are in agreement that the problems higher education faced in the early 1990s were not simply a matter of funding. At the same time, neither California leaders nor the general public are confident that the issues facing higher education will be addressed with real "purposefulness." Higher education is low on the political agenda, and seems an unlikely topic for discussion in public forums on a statewide basis.
The issues are wide-ranging. Perhaps the most visible challenge
is a projected enrollment surge that has been called "Tidal Wave
II." The California Postsecondary Education Commission has estimated
455,000 Californians beyond those already enrolled in the state's
colleges and universities will seek access to higher education
in the state in the next decade. Access for these students is
threatened by limited space in existing institutions as well as
by disagreements among the three public segments about how many
each should serve and how. Access is also threatened by growing
student indebtedness. Demand for student assistance has surpassed
program capabilities, so that the past consensus about the purpose
of state student aid grants-called Cal Grants-has broken down.
(Cal Grants were initially established to ensure that California
residents who chose to attend private colleges or universities
would have some financial assistance in making that choice.) As
institutional costs increased, however, there were no significant
increases in the number of Cal Grant awards or in the dollars
appropriated to the program. Lack of consensus about purposes
and amounts of aid threaten the viability of the independent sector
at the same time that the state is counting on its capacity as
one response to Tidal Wave II.
According to a public opinion poll conducted in California in
1993, the general public was concerned about declining opportunity,
even before Tidal Wave II. Over one-half of those polled thought
that many qualified people were unable to get a college education
in the state; 67 percent felt that opportunity for higher education
had declined in the last ten years; and 73 percent believed that
getting a college education will be even more difficult in the
future. Californians were particularly concerned about declining
opportunity for those least able to afford a college education.
Many are concerned as well about the degree to which more affluent
students are required to fund the less affluent. Currently, public
institutions are expected to dedicate approximately one-third
of all new student fees to financial aid. While this arrangement
works reasonably well in the University of California and the
private sector, it may not work as well in either Cal State or
the community colleges. A CSU president described the costs now
borne by students as a threat to quality as well as access.
Concerns about quality are by no means limited to CSU, for the
quality of undergraduate education has been a chronic concern
for UC as well. Many of our respondents wondered whether California
will be able to afford eight or more "world class" research universities
with common expectations. Several respondents predicted a scenario
in which UCLA and Berkeley maintain what they have and other campuses
get by with substantially less. Concurrently, program duplication
at the graduate level adds to the costs of doing business for
the UC system, and few are optimistic about the system's capacity
to use technology to reduce costs in the face of faculty resistance.
Concerns about quality intersect with concerns about access. This
is particularly true at CSU, where the response to past state
budget cuts has been to reduce the number of course offerings.
Few believe that the community colleges, under current funding
constraints, can continue to achieve their mission in providing
widespread access to quality higher education. All of California's
institutions of higher education must find ways of responding
to changing student demographics and changing work-force requirements
in an environment that has become hostile to services that target
ethnic groups.
Most system representatives we interviewed were confident that
these issues could be addressed with sufficient resources. The
"Catch-22" is that no one really believes that the necessary resources
will be forthcoming, especially in the changed political climate.
Describing the state's shift toward block grants and its reduction
in state funding to higher education during the early 1990s, a
former CPEC official said, "It is not possible to exaggerate the
changes in state funding of higher education." A current CPEC
official described Proposition 13, Proposition 98 and similar
actions as creating "structural flaws in the budget." He estimated
the need for anywhere from $350 to $450 million of new funds for
higher education per year if systems were to keep pace with demand,
investigate technological solutions, shorten time-to-degree, and
expand facilities.
While some take heart from the 1995-96 increase of $266 million
to higher education (for all purposes except capital outlay),
most believe that higher education will not be capable of carrying
out its responsibilities under the Master Plan without some reexamination
of where revenues are generated and resources allocated. Many
of those interviewed expressed particular concern about the extreme
disparities in per student allocations to the three public segments,
especially since changes in affirmative action may result in an
even greater proportion of the least affluent and least well-prepared
students attending community colleges.
The disparity in per student allocations is illustrated by a Rand study that estimates real operating costs per full-time-equivalent (FTE) student for 1993-94 as $17,398 for UC, $8,439 for CSU, and $2,738 for the community colleges. Knowledgeable insiders scoff at these figures, arguing that the way they were derived (dividing total revenues by total FTE students) invalidates their usefulness. While the Rand figures undoubtedly distort actual expenditures for educating students, they nonetheless underscore two realities that California must confront. The first is that the segments are very unequally funded, exacerbating the perceived differences in the prestige of each one. The second is that California does not do very well on measures of equity in intra-system allocations, ranking 5th among the seven study states and 37th in the United States.
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