SF Gate: California lawmakers move to take control of UC president’s budget

May 23, 2017
By Melody Gutierrez

SACRAMENTO — California lawmakers are proposing a change to the state Constitution and a new budget measure that would help them wrest control of spending by University of California President Janet Napolitano’s office.

The moves come after state Auditor Elaine Howle advised the Legislature to establish oversight of the UC president’s office in light of her discovery of problems there, including hidden funds and misleading accounting practices.

State Sen. Ed Hernandez, D-Azusa (Los Angeles County), introduced a constitutional amendment Tuesday that would, if passed by the Legislature, ask voters whether Napolitano’s office should keep its full budget autonomy.

The Assembly, meanwhile, is pushing a budget measure that adopts Howle’s oversight recommendation — by requiring the Legislature to directly fund the UC president’s office. The funding would give lawmakers oversight and control over how the UC president’s office spends those funds. The office would no longer collect campus fees, which give it exclusive control over how to spend that money.

Specifically, the Assembly budget proposal would set aside $296.4 million in the state budget for Napolitano’s office in the upcoming fiscal year that begins July 1 and another $52.4 million for UC Path, the university’s over-budget and behind-schedule payroll and human resources system. In addition, lawmakers want to examine existing programs in Napolitano’s office to identify $59 million that could instead be used to increase enrollment by 5,000 California undergraduates and 900 graduate students between 2018 and 2020.

The Assembly’s budget proposal unanimously passed its first committee Tuesday. It’s expected to be taken up Thursday by the Assembly’s full Budget Committee, which is chaired by Assemblyman Phil Ting, D-San Francisco.

Hernandez’s constitutional amendment would need a two-thirds majority vote in both the Assembly and state Senate before it could go to voters.

Voters approved changes to the state Constitution in 1879 that made UC a “public trust” and gave its governing Board of Regents autonomy to shield the system from the politics of the Legislature. Under Article IX of the California Constitution, UC and its regents have “full powers of organization and government.” Hernandez said his amendment would revise language in the Constitution to give the Legislature oversight of the UC president’s state funds while allowing UC to keep its academic independence.

The amendment would also require more regents to be faculty, students and staff members, and would reduce regents’ terms from 12 years to four.

Hernandez said it’s time the state made sure UC is held accountable.

“This is my way of starting that conversation,” Hernandez said. “I’m glad there is a conversation on the Assembly side as well.”

Both the amendment and budget proposals face significant odds, but proponents say it’s important to try.

“This was a scathing audit, and it’s time the Legislature takes action,” Ting said. “To not take action would be a huge disappointment.”

Howle’s audit found Napolitano’s office kept $175 million in secret funds and paid executives exorbitant salaries, revelations that have spurred legislative hearings, bills and much finger-waving as the university system prepares to raise tuition on students.

Currently, the state provides $3 billion to UC’s 10 campuses, which then pay $288 million in fees for administrative support from Napolitano’s office. Along with endowments and other funds, Napolitano’s total office budget is $686 million.

In all, the entire $32.5 billion UC system only gets 10 percent of its revenue from the state, with the remaining funds coming from its medical centers, government contracts and student fees. Napolitano’s office is asking the Board of Regents for a 19 percent budget increase for 2017-18 to help pay for the payroll system, the university’s education-abroad system, patent management and other programs.

Previous efforts to roll back the self-governance UC has enjoyed for 138 years have been met with much skepticism. Napolitano and many regents expressed concern about the proposals to encroach on the system’s independence. Napolitano said her office will implement all 33 recommendations made by the auditor to improve budgetary practices.

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