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Real UC scandal is disinvestment by state, not compensation

BY MICHAEL H. SCHILL

The current controversy over compensation at the University of California involves two issues: the amount of compensation paid to senior management and faculty, and how compensation is determined and disclosed. While most of the attention focuses on disclosure, the more critical issue is whether the state of California is willing to invest in retaining and recruiting the finest faculty and administrative talent in the country.

Frankly, the compensation storm is covering up the real UC scandal: The system is at risk because of disinvestment by the state. In 2001, the state provided more than 60% of the university’s core funds. That has fallen to 46% this year. Disinvestment — not competitive compensation — is clearly why the rising costs of education have to be borne by students.

Universities — private as well as public — operate in a market. To recruit the best faculty and administrators to a city with a high cost of living, we must offer them competitive financial packages. When UCLA recruited me from New York University two years ago, I was offered housing assistance.

Although this assistance was reported in various public audits and drew the attention of the media, it was no more valuable than what my former employer had offered. If UCLA had not been able to allow me to at least maintain my standard of living, I would have found it very difficult to accept the law school deanship.

Most university faculty members and administrators are not primarily motivated by money. We love teaching and pursuing scholarship in an intellectually stimulating environment.

Nevertheless, no matter how wonderful the milieus at any of the 10 UC campuses may be, if compensation lags the market, top scholars and administrators will go elsewhere, and UC will lose the people who make it one of the world’s greatest institutions.

Since the adoption of the 1960 Master Plan for Higher Education, the state’s financial commitment to the growth of the UC system has paved the way for California to become the greatest state in the nation. UC faculty and students have made trailblazing scientific and medical discoveries, pioneering the Internet, devising new treatments for AIDS and cancer, and much more. UC is the largest academic generator of new patents in the nation, and its 10 campuses, three national laboratories and five medical centers are major economic drivers in their respective locales. At UCLA, for example, for each $1 of taxpayer investment, the university estimates that it generates nearly $9 in economic activity, resulting in a $6-billion effect on the Southern California region.

The state needs to be clear about the costs of maintaining a great university. It must create a transparent pay system. But it also must maintain enough flexibility to hire the people who do the most to keep the university competitive. If we value the state’s future, the creeping disinvestment in the UC system must stop.

Schill is dean of the School of Law.