It’s not just California’s public universities that are stressed out, economically and otherwise, in the current national political environment.
The giant fundraising machines that are USC and Stanford suddenly find themselves with massive budget deficits as well during a time of cutbacks in research funding.
But the University of California and the California State University systems rely on funding from Sacramento as well as on tuition and fees income from their students. And the state is in a budget crunch and can’t be relied on to meet all of its expected obligations.
The CSU system finds itself caught up in that crunch. As has happened several times in recent years, the problem is agreements with employee unions for large promised pay hikes. But this time, it’s not the professors in the 22-campus system who have such expectations — it’s support staff and student assistants, as well as workers like plumbers and carpenters.
Amy Dipierro of the online news site Edsource explains: “The unions’ contracts promise members salary step increases, some of which depend on the state allocating a certain amount of money to CSU. University leaders say their ongoing state funding in 2025 is down $144 million, allowing them to reopen talks on the salary and benefit terms of those contracts. But union members argue that CSU is reneging unnecessarily and are urging CSU to accept the state’s offer of a one-time, interest-free $144 million loan.”
Free money, right? It’s nice that the offer is interest-free. But here’s the problem with the university system accepting such a loan in order to meet union pay raise expectations: Loans, no matter what the interest rate on them, still have to be paid back. This would mean taking on a large debt that is not in the current budget.
The cumulative negotiated raises of up to 10% are naturally welcomed by the union membership. But you can’t pay out what you don’t have, and the contracts with the California State University Employees Union, the Teamsters and the Statewide University Police Association make certain kinds of raises contingent on state funding.
That state funding is no longer there. The unions argue that the offer of the loan makes up for that fact. University administrators disagree. The Teamsters say they will consider all options “up to and including potential strike action” if CSU does not implement all the step increases.
Californians treasure their public university system, and want schools that are well-run, with the best staffs possible, from professors to campus cops. But the raises once negotiated may no longer be possible.
“With that promise, we believed we could afford to give our employees, our staff, our faculty promised raises, promised step increases,” said CSU trustee Julia Lopez. “But it turns out that reality doesn’t always turn out as expected, and the state ended up facing some really critical financial challenges.”
Higher education faces challenges on many fronts. Funding is just one of them. But we want a financially solvent state university system. There are times when employees have to roll with the punches if they want to keep their jobs. This is one of them. There’s no reason for the CSU to go deeper into the hole by accepting a loan it has no real way of paying back. We urge the state university board to hang tough for taxpayers in the hopes of better times ahead for higher education funding.
