Op Ed: On Exec Pay, GOP Blows a Chance to Matter


By John Hrabe
Special to Calbuzz

This morning, the California Senate Education Committee will defeat a good government bill designed to rein in the outrageous executive compensation at the state’s public colleges. SB 967 by Democratic State Sen. Leland Yee of San Francisco, would prohibit raises for Cal State University’s top administrators during bad budget years or within two years of a student fee hike.

Here’s how the committee vote will go down: Republicans will support the bill. Democrats will oppose it. Then  Democrats will pass SB 952, a weak and ineffectual cap proposed by Democrat Elaine Alquist of Santa Clara. Her bill guarantees 10 percent pay hikes for top executives in perpetuity while allowing Senate Democrats to send out self-congratulatory press releases about fighting for students and teachers.
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Senate Republican Leader Bob Huff, a member of the committee, promises that Republicans will support Yee’s bill. “This will make trustees think twice about raising student fees or tuition because it would limit executive compensation,” he said. “It would also stop the practice of building up the value for college presidents and chancellors by capping the amount they can pay.”

Sure, Democrats will defeat Yee’s bill and pass Alquist’s hollow PR gambit. But, Republicans also deserve some of the blame for the bill’s defeat. GOP Senators should have championed Yee’s bill earlier in the process, signed up the entire caucus as co-authors and made it a central component of their March message. They didn’t because that idea never crossed their minds. Republican legislators don’t know how to win.

Republicans are fighting for relevancy in California. Prop. 14, unfavorable redistricting and bad fundraising make it likely that the GOP will drop below one third in the State Senate after the November election. If Republicans have any chance of pulling off upsets in November, or remaining relevant after that, they need to drop the culture of losing, form some odd political coalitions and wholeheartedly endorse Democratic mavericks when they propose good ideas in line with their ideology.

Opportunity to Split the Left

What are two of the most common complaints of the Occupy Wall Street Movement? Executive compensation and student loan debt. Cal State executive compensation, or high salaries for public employees, is a rare issue in which Republican ideology actually aligns with the Occupy Wall Street movement. Over the last few weeks, student Occupy groups at San Francisco State and Cal State LA have targeted campus administrations for raising tuition while simultaneously awarding pay raises for administrators. It would have been easy for Republicans to encourage student frustration. If nothing else, it would have kept some Occupiers away from protesting Republican private enterprises for a few days.

And it wasn’t just the Occupy crowd and a few fringe student groups protesting against college presidents’ pay. The California Faculty Association has been one of the most vocal critics of the administration’s high salaries.

“The Chancellor needs to get his priorities straight. Our nation is in a time of crisis, our youth face a doubtful future. Educators, especially those at the top of our public university, need to focus on our mission to advance the people of California. It’s time for those at the top to act like educators in the service of the public,” said CFA President Lillian Taiz in an August 2011 press release. “Furthermore, it is simply repugnant to hear the Chancellor cry poor about well-to-do executives having to sell a home at a loss and seeing their pensions capped at a mere $240,000 per year while tens of thousands of students are losing their opportunity to climb into the middle class.”

Why didn’t the Senate Republican Caucus host a press conference with the California Faculty Association? Maybe Republicans just couldn’t get over their ideological disagreements or personal contempt for unions and Occupiers. Maybe.

The more likely explanation: Republican legislators are so wrapped up in their minority status that they don’t know how to win. When I asked one GOP Assembly office to respond to a recent report that the Chancellor’s Office had hidden $200,000 in compensation for Cal State LA President James Rosser, the press flak fired back, “I’m not totally sure what you want a comment on.” Meanwhile, another GOP press aide expressed the helpless attitude of “What do you want us to do, we’re in the minority.”

Think about the irony, the party of personal responsibility, agency and pulling yourself up by your own bootstraps complains that they are helpless to do anything in Sacramento?  What Republican legislators should do is follow the lead of Sen. Yee and Assemblyman Anthony Portantino, who have proven how to be effective critics of government spending.

Both Yee and Portantino sent a letter on March 13 demanding the CSU Chancellor to disclose the total compensation of all 23 campus presidents. Yee’s office aggressively courted every Senator on the committee for support of SB 967, both Republican and Democrat. This bill is headed for defeat, but Yee’s legislative track record is impressive. Last year, he was successful with SB 8, a bill that requires college foundations to comply with the Public Records Act. If you search Yee’s website, you’ll get a few hundred hits on the phrase executive compensation.

Then, there’s Portantino, who took on his own party leadership to force the public disclosure of the Assembly’s spending records. Portantino was “in the minority” when it came to that fight, but he didn’t play the “I’m helpless card.” It’s much easier for Republicans to wait to see the winning side and then issue a press release.

Here’s another frustrating piece of news for the Republican base: GOP legislators’ lackluster approach on this issue has weakened their position in the looming tax fight. Cal State’s top administrators have no problem taking more money from taxpayers to pay for their excessive salaries. They’re ready to turn the student groups, Occupiers and faculty into effective activists for the tax increase measure. “The California State University system plans to close spring admissions at most campuses next year, and deep enrollment cuts are planned if voters reject Gov. Jerry Brown’s measure to raise taxes, a top school official said Monday,” reads the opening line in of a March 19 Associated Press report. Bureaucrats play the game better than legislative Republicans.

Democrats Defend Higher Ed’s 1%

Republican legislators failed to lead, but Democrats’ opposition to Yee’s compensation cap is inexplicable. I thought the Democratic Party supported public education, stood for teachers and hated income inequality. Cal State’s top brass are the 1% in higher education, earning upwards of $600,000 per year in total compensation. Cal State presidents receive $72,000 in annual housing and car allowances, more than the annual salaries of 3,888 professors. It takes the combined tuition of 106 SFSU students to pay the annual compensation of President Robert Corrigan.

And the Cal State Board of Trustees wants to pay college presidents even more. “I’m just sorry we can’t pay them more because of the policy we adopted,” CSU Trustee Roberta Achtenberg said at yesterday’s meeting, the LA Times reported. At that meeting, the Trustees approved pay increases for the two new college presidents at Fullerton and East Bay. The pay raises come the same week that the Cal State Chancellor’s Office announced plans to close spring admissions at most campuses and reduce enrollment by 25,000 students because of budget cuts.

Politically, it’s also a head-scratcher why Democrats are defending higher education’s administrative elite. Cal State officials have blamed the Democratic legislature and Gov. Jerry Brown for their ongoing tuition hikes. Last month, when asked to justify why any government employee should make more than the governor or the Assembly Speaker, Claudia Keith, CSU’s Assistant Vice Chancellor of Public Affairs, replied “I doubt any legislator has to have a Ph.D. or Ed.D., 20-plus years of experience, and are required to raise a million dollars a week toward a fundraising campaign for an institution.” You can decide for yourself if that was a thinly veiled attack on the high-ranking legislator who never finished his bachelor’s degree at Cal.

Gov. Brown hasn’t been spared CSU’s wrath either. Back in August, outgoing San Francisco State University president Corrigan told the Bay Citizen that Brown “doesn’t seem to appreciate high-quality education in California.” Cal State’s press office didn’t mince words last summer with its press release announcing the 12 percent fee hike. It blamed Brown by the release’s second word. “Following Governor Brown’s signing of a final budget that cuts state funding for the California State University by $650 million for 2011-12, the CSU Board of Trustees took action today to increase tuition by an additional 12 percent — or $294 per semester for full-time undergraduates — effective in the fall,” according to the July 12 press release.

Go back and check the archives. Cal State fawned over Gov. Arnold Schwarzenegger as he took an axe to Cal State’s budget. In its first press release of 2009, as the system braced for more budget cuts, it was all about austerity. “The magnitude of the state’s budget crisis continues to grow, along with the uncertainty of the future fiscal picture,” said CSU Chancellor Charles B. Reed.  “We are instituting these cost saving measures knowing that the state’s fiscal situation worsens each day.” It’s “the state’s” budget crisis during the Arnold era, but Gov. Brown’s fault for the current round of tuition hikes.

John Hrabe regularly contributes to CalWatchdog.com and the OC Register editorial pages. You can read more about his ongoing investigation into Cal State’s executive compensation scandal at his website, johnhrabe.com.

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There are 5 comments for this post

  1. avatar calif.commentator says:

    Oh come on — Jerry Brown cut CSU by $750 million — more than 25 percent of their budget — Arnold never proposed cuts anywhere near that magnitude. That press release you cite from 2009 says “the Governor’s Budget would make permanent $66.3 million in budget reductions proposed for 2008-09.” Jerry Brown’s cuts are more than 11 times that.

  2. avatar GeoHagop says:

    Excellent analysis.

    The Dems in CA have sold out higher ed, and lower ed too, and puffed up the myth of the super exec, presumably unavailable at any lower price. Horse patty. These guys have squeezed out spots for young Californians, forcing them to look at Phoenix, etc, which are very generous with the Dems campaign contributions. It’s sickening.

  3. avatar chrisfinnie says:

    As bad as this is for students and families–and it’s plenty bad–excessive pay at the top hurts more than just them. I know university employees who are just scraping by and haven’t had raises in years and years. I know part-time instructors who lost their jobs because of budget cuts. They didn’t earn much and never got benefits, but they lost what little they had while top administrators kept their excessive pay and perks. Some years back, one UC hired not only a chancellor, but her partner–both at very high pay. They provided a home, and remodeled it for them, and a couple of high-priced cars. There was probably more I didn’t hear about, but my friends who worked low-level administrative jobs that barely allowed them to feed their families were plenty steamed about that.

    Finally, the real loser is the state. One of the ways we attracted new businesses and new jobs was with a highly educated workforce. There’s a reason Silicon Valley and so much of the biotech industry is in California–and the reason is our system of universities. As we cripple the universities that did so much to spur growth, we will lose those high-paying jobs and the tax revenues from companies that create them. We will lose the ancillary businesses and the jobs they create. And we lose the creative ferment that has been a hallmark of California for most of my life.

    It is a huge loss to the whole state–all so we can maintain at least three layers of top administration (starting at the colleges and moving through state-level administrators to regents) at levels we simply can no longer afford. If they can find other educational institutions that will pay them these inflated salaries, they should go there. But it shouldn’t cost students more to go to a UC than to Harvard. We need to change that. And, if we lose some overpriced administrators in the process, I say good riddance!

  4. avatar GeoHagop says:

    College administrators, in my lengthy experience, are bloated egos in search of a purpose. They are generally inept teachers without much of anything they can teach anyway – and if there is something they can teach, they hide it well for fear that someone will actually ask them to interact with students that way. This makes them the perfect sycophants for legislators.

  5. avatar Moravecglobal says:

    University of California campus chancellors are the problem not the politicians and California tax payers. I love University of California having been a student & lecturer. Like so many I am disappointed by Chancellor Birgeneau’s failure to arrest escalating costs/ tuition. Birgeneau doubled instate tuition. On an all-in cost UC Berkeley is the most expensive public university; more expensive than Harvard, Yale. Tuition consumes 14% of a median family income.
    UC Berkeley ranked # 2 in faculty earning potential. Paying more is not a better university. Birgeneau dismissed: increasing the number of classes per faculty; eliminating courses with too few students; refraining from exorbitant salaries, bonuses; doubling the time between sabbaticals; freezing all vacant positions; freezing pay, benefits & reforming pensions, health costs. Birgeneau believes fiscal efficiency wouldn’t be healthy for Cal. Exodus of faculty, chancellors, and administrators: who can afford them?
    An American Enterprise Institute study found that UC Berkeley can operate well on much leaner budgets. Californians agree it is far from the ideal situation.
    Recently, Chancellor Birgeneau’s campus police rammed baton jabs on Cal. students protesting Birgeneau’s doubling of tuition/fees. The sky above Cal. will not fall when Robert J. Birgeneau ($450,000 salary) honorably resigns. Email opinions to the UC Board of Regents marsha.kelman@ucop.edu

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