We're not sorry, Charlie

The head of America's largest higher education system, Charlie Reed, announced his retirement Thursday. Privately and publicly, employee groups are celebrating.

Nobody has heard of Reed, the head of the 23-campus California State University, with about 425,000 students and 40,000 faculty. (Enrollment peaked at 437,000 in 2008). Although by headcount the CSU is twice the size of the 10-campus University of California system, the UC has an international reputation based on the faculty and selective admissions policies of its leading campuses.

The CSU was created in the 1960s by consolidating the state’s teachers colleges of the 19th and early 20th century. Its most elite campus, Cal Poly San Luis Obispo, has tougher admissions standards than several of the UC campuses and attracts some very bright students, but the general CSU orientation is towards teaching rather than research. At SJSU (where I worked for 9 years) and other campuses, we often served students who were the first in their family to attend college.

The San Francisco Chronicle did the best job of presenting a balanced assessment of Reed, who earned $450k a year. Several papers glossed over his contentious relations with faculty, while Merc had a sketchy story that gave disgruntled faculty a disproportionate voice.

The California Faculty Association and some of my former SJSU coworkers are glad to see Charlie go, but — like many academics and other public employee union members — I think they’re in a serious state of denial. Yes, Reed was imperious and autocratic, with a degree of powerful central control not seen among UC presidents since Clark Kerr.

The union members (I was not one) were denying two fundamental realities facing Reed or any other CSU head.

First, any president is constrained by this simple inequality
state subsidy + (tuition * # of students) - scholarships + other income ≥
# employees * average salary + other expenses
Paying more to employees requires either increased revenues or a reduction in head count.

Instead, during the past decade, the California legislators (like their counterparts elsewhere) have been reducing the state subsidy, faster than the CSU can realistically increase prices (particularly since half of every price increase is rebated through scholarships to needy students).

In the fall of 2010, I met a longtime CSU faculty member who questioned why the CFA and other faculty unions were backing Jerry Brown for governor, because he'd been “terrible” for higher ed during his previous 8 years as governor. Meg Whitman promised to strengthen education — something her industry buddies care about — and I think she would have cut other aspects of the state budget to keep that promise.

Instead, it appears that Gov. Brown is protecting spending where there are votes and campaign contributions: the California Teachers Association (the state’s largest union), CalSEA and SEIU (who unsuccessfully tried to save Gray Davis from recall). Plus — like every other politician in the state — kowtowing to the state’s richest and most powerful union, the prison guards.

Brown cut $1.4 billion from higher-education for this academic year. best case budget for next year is flat, and if his $7-9 billion annual tax increase fails, more cuts will happen.

Starving the CSU will not be good for the state, as it supplies not only the K-12 teachers and other public employees, but employees for most of the private sector. I know that at SJSU, our College of Business provides the bulk of the college-educated managers for local businesses. It’s also a major supplier of engineering talent to Silicon Valley. Our average student would not have gotten into Stanford or Berkeley, but they form the backbone of the state economy.

Unfortunately, I don’t have an answer, precisely because the scale of the enterprise is enormous. You can’t raise $4.6 billion through bake sales, corporate grants or private donors. Stanford’s $16 billion endowment can make life easier for its 7,000 undergraduates, but the CSU neither has a trillion-dollar endowment nor any prospect of ever achieving that level of support.