NASBO

Are you against efficiency?  Of course not!  Do you think goals should be achieved? Of course you do! Do you think higher ed could be improved if it became more efficient and achieved its goals? So far, you totally agree.

The National Assn. of State Budget Officers (NASBO) has issued a report on public higher ed, a system which nationally, as well as in California, is under budgetary strain. I don’t know for sure how much circulation the report got pre-publication. I suspect, however, it reflects the general scuttlebutt among budgetary types that evolved in the aftermath of the Great Recession. You see similar ideas coming from the Legislative Analyst here in California, for example.

But there is a problem with the report once you get beyond the motherhood-and-apple-pie stuff. There is lots of Good Government lingo – performance metrics, etc. But when you take all of higher ed together – from community colleges to research universities everywhere in the U.S. – the one common element is that all institutions have students who (hopefully) get degrees. So the metrics end up focusing on dollars/student, degree completion rates, etc.

For high-quality research universities, however, more goes on than degree production.  At UC, roughly one dollar out of ten in the budget is coming from the state.  That dollar is roughly matched by tuition (some of which is paid by out-of-state students). So what happens to the activities that are reflected in the other eight dollars if you focus only on the state dollars/degree type “metric”?  At UCLA, we could run the place as Cal State Westwood or Westwood Community College and undoubtedly improve the dollars/student metric. Is that what the state wants?  Does the state know what it wants? 

The report also tends to have a silo approach, isolating “cost drivers” without looking at interrelationships. That tendency is notable when it comes to compensation.  Benefits are rising in cost relative to cash pay, the report notes. So cut benefits! But wait.  If you cut benefits wouldn’t you have to raise other pay? Or can you just cut total compensation (cash pay + benefits) without any consequences?

Similarly, the report suggests that undergrads’ tuition cross-subsidizes grad students. Let’s assume that is true.  If you cut undergrad tuition to marginal cost, what happens to grad student education?  Can you have a research university without subsidized grad students?  That is the kind of question the silo approach can’t address.

As this blog has noted many times, there are indeed issues about cost and efficiency at UC.  We have pointed out the problem with the limited ability of the regents to review and evaluate capital projects.  There are really big bucks involved there, but not the dollars that get directly into dollars/student metrics.

What needs to happen is not magical thinking about “delivery systems” (a.k.a. online higher ed) and metrics but for something like the old 1960 Master Plan review.  At that time, UC president Clark Kerr directed that review and presented the Plan to the then-governor, Jerry Brown’s dad.  We are about to bring in a new UC president. Whoever is ultimately selected should be someone capable of doing what Kerr did including persuading the governor that a new Master Plan is what is needed. That’s the metric the regents in making the selection should be using.

The NASBO report is at http://www.nasbo.org/sites/default/files/pdf/Improving%20Postsecondary%20Education%20Through%20the%20Budget%20Process-Challenges%20and%20Opportunities.pdf

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