Thursday, March 03, 2011


Thoughts on California

Having entirely too much plane time to think it over, a couple of ideas from the League conference have stuck in my craw. They're both examples of basically good ideas – or at least well-intended ones – gone horribly wrong. The snowballing process is remarkably hard to stop.

The first is the gradual accretion of levels of remediation at community colleges. I'll address that one in a subsequent post of its own.

The second is rampant “reserves” growth at California community colleges.

I hadn't fully appreciated just how badly designed the California system was until I had a chance to overhear an exchange with Dr. Constance Carroll, the chancellor of the San Diego community college district. At this point, I have some sense of why I didn't understand it before, and I can say with confidence that if the California cc system were a stock, I'd short it.

In the states in which I've worked, the community colleges were formed as colleges. They were understood as locally accessible portals to higher education. As such, they were staffed by people from higher ed, and they drew on recognizable higher ed models. For example, tuition and fees are used to support the costs of instruction. This is so basic and so much a part of my world that I simply took it as the way things are.

In California, though – and in some other states – community colleges were initially established with structures and strictures much closer to the K-12 system than to higher ed. (That's why some states have community college “districts,” complete with superintendents – sometimes called chancellors – and campus principals, usually called presidents.) Like the K-12 system, it was initially tuition-free, and its per-credit charges are still improbably low by national standards. Its costs of instruction were initially covered either by the state, or by the state and the local district. Tuition/fees were later add-ons, but the system was not structurally changed. To this day, the colleges send their tuition/fee income to the state, where it gets absorbed into the general fund. (As we used to say in the '80's, it gets sucked into the void.) Funding from the state is allocated by the legislature, which itself works within a largely plebiscitary budgeting system. (When in doubt, pass a referendum.) One outcome of that is that any increase to tuition and/or fees looks, to tax-averse politicians, like a tax increase.

The consequences of this system are several, all of them awful.

First, and most basically, colleges have no meaningful control over their own operating income. Dr. Carroll noted that her district has managed to build up its reserves even over the last couple of catastrophic years; the reason it did that is to cover the four-month stretches during which the state doesn't send any money to the colleges. (I think Illinois does that, too, though I'm fuzzier on Illinois.) The California legislature has a habit of passing its cash-flow problems on to others by simply not paying them for long stretches. Since colleges have payrolls to meet, and people get kind of cranky when they don't get paid, the district has had to build its reserves unusually high by diverting money that could have gone for instruction; the alternative would have been insolvency.

This is madness. In the models with which I'm familiar, tuition/fee revenue has always gone directly to pay the costs of instruction. In the beginning its share of the costs was relatively small; it has gone dramatically higher of late as state subsidies have been kneecapped. But that, at least, offers a survival strategy for a strapped college: tuition hikes. As tuition covers a progressively greater share of the overall cost, a combination of adjunct staffing and enrollment growth can generate enough revenue to offset at least some of the subsidy cuts. Better, colleges in this system can keep smaller reserves and get away with it, since they're less dependent on the state to make payroll. Even when the dollars coming in are too few, these colleges are at least spared the expense of having to build up ever-higher reserves to compensate for ever-longer funding droughts.

Too, colleges in the states I know not only get to keep the money they bring in, they actually get to set their own tuition/fee levels. Over the past few years, as the state has reeled from the Great Recession, we've been able to offset at least some of the state cuts through higher prices. Stripped of that option, we would have had to go the California route and simply turned away thousands of people.

California's tuition level is so low that it actually loses money on a typical adjunct class, let alone one taught by a full-timer. The only option campuses have for solvency is to shrink.

And that's where I take fundamental issue with the knee-jerk equation of low tuition with access.

At first blush, “cheap” and “accessible” seem to make sense together. It's easier for a student to pay, say, $26 per credit than to pay $126. But that's misleading. Pell grants and other forms of financial aid are available for low-income students to deal with tuition increases for the classes they need. But when the class they need doesn't exist in the first place, there's no financial aid for that. Students who get waitlisted or turned away altogether take longer to get their degrees, incurring severe (if unbudgeted) opportunity costs in lost time. When a two-year degree suddenly takes four because classes aren't offered, there's a real human cost to that.

Beyond the existence of the class, obviously, is the quality of it. Having 'access' is only worthwhile if the thing you have access to is worthwhile. Maintaining good facilities, reasonable class sizes, and qualified employees costs money.

I'm lucky to work at a college that charges something closer to reality, and that mostly gets to keep what it makes. That means, among other things, that we've been able to keep running quality programs without turning people away. Yes, we have had to cut costs, and will have to cut more, and that sucks. But there's at least some level of agency at the campus level to make those decisions. In California, the campuses are told what they'll get, and that's what they'll get, unless they don't.

This is no way to run a college, let alone a state system of colleges.

Please understand that none of this is intended as a shot against the people who work in the California cc system. I was impressed by many of them I met earlier this week, and I happily stipulate that there are great and wonderful people throughout. The issue is structural, not personal. The solution has to be structural, too.

With the supermajority requirement for tax increases and a crazy quilt of referenda hemming it in, I wouldn't put much faith in the California legislature to step up. The slow bleed from Prop 13 and the earlier tax revolts has become acute. I'm guessing that the solution is to get away from the state-system model, and to double down on localism and autonomy. Let campuses set their own tuition and fee levels, and let them keep the money. Let them work with local governments and/or taxpayers to establish local funding; after all, folks in, say, Oakland may not care much about a college in L.A., but they'll probably care about one in Oakland.

More broadly, break away from the K-12 model of 'districts' and state dependence. Community colleges are colleges. Let them act like it. Either that, or watch the community college system shrink to irrelevance, and leave the fate of the next generation to the for-profits, who actually understand the concept of a business model.

Wise and worldly readers, is there a cause for optimism that I'm missing?

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