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Thursday, February 2, 2012

Where's the Money Going to Come From to Fix Higher Education? "It's Above My Pay Grade," Answers UW President Michael Young

Posted by on Thu, Feb 2, 2012 at 2:14 PM

If you can't make a case for raising tax revenue to fund higher education when speaking before a liberal audience at Town Hall Seattle, then you can't make that case anywhere. Apparently, none of the presidents of Washington's six public universities are willing and able to make that case.

Last night Michael Young (UW), Elson Floyd (WSU), Bruce Shepard (WWU), Les Purce (Evergreen), James Gaudino (CWU), and Rodolfo Arevalo (EWU) sat on stage together to righteously bitch about our woeful lack of higher education funding in Washington state. And woeful it is. Higher education has shrunk from nine percent of state general fund spending in 1991, to only three percent today, and our public universities have seen their state subsidy gutted by over 50 percent in the last four years alone.

"No state has found it necessary to slash higher education to the extent that Washington has," WWU's Shepard complained early in the Seattle Times sponsored forum. As a result, undergraduate in-state tuition has more than doubled over the past three years alone, with another double-digit increase expected for the next academic year.

Yet for all the effort put into illustrating what WSU's Floyd describes as the "real crisis" our public universities find themselves in, there was zero discussion last night about the only possible solution: raising additional tax revenue. The two moderators, Seattle Times editorial page editor Kate Riley and business columnist Jon Talton never raised the issue once, neither of the six university presidents, nor Sally Jewell (REI), Brad Smith (Microsoft), or Laura Peterson (Boeing) on the business panel that followed. It was only when the forum was opened to questions from the audience during the final 20 minutes of the program that the question of tax revenue was finally (and relentlessly) raised. And nobody wanted to answer.

"It's above my pay grade," the UW's Young finally shrugged evasively. Young's total compensation package comes to $802,000 a year, making him the highest paid state employee funded out of general fund tax dollars (Governor Chris Gregoire, by comparison makes $166,891). So if the question of whether to raise taxes is above Young's pay grade, I guess the issue is completely off the table.

As it continues to be today. When pressed repeatedly on the revenue issue in a live chat on the Seattle Times' website, WSU's Floyd refused to bite. "[T]he point that we were attempting to make was that we should not reduce higher education funding beyond its share of the overall budget," Floyd initially responded, preferring to dwell on such catch phrases as "innovation" and "accountability" and "efficiency." When pressed further to list state programs that should be cut in lieu of higher ed, Floyd demurred:

"I have not identified specific aspects of the budget that must be reduced. I believe those decisions should be made at the local agency level. I am convinced that higher education cannot subsidize other parts of state government."

Sigh.

"We are at a tipping point," CWU's Gaudino warned about the drain on university resources and talent. It takes five years to destroy a university's reputation, he explained, but it "will take decades to rebuild." But if facing such an existential crisis our state's university presidents can't bring themselves to argue for new tax revenue, even before a friendly audience, then who will? Certainly not our so-called business "leaders."

"I believe we pay our fair share of taxes in Washington state," said Microsoft executive vice president Brad Smith in response to an audience question he at first attempted to ignore, a sentiment with which Boeing VP Laura Peterson seemed to agree. Boeing posted net income of $4 billion in fiscal 2011 on revenues of $68.8 billion. Microsoft posted $23.2 billion in net income on sales of $69.9 billion.

Yet both executives repeatedly patted themselves on the back for the $25 million each of their respective companies have promised toward a proposed $1 billion university endowment fund intended to help subsidize financial aid... as if that drop in the bucket could possibly make up for the hundreds of millions of dollars Microsoft and Boeing save each year through state tax exemptions, credits and loopholes.

"We want a future that is as bright for people who are born here as for those who we bring in from other places," insists Smith. Yeah. They just don't want to pay for it.

And that was the main take away from the evening, and not just mine. State Representative Reuven Carlyle, one of two state legislators in the audience last night (along with Representative Larry Seaquist) tactfully bemoaned "a lack of financial context," while even Seattle Times executive editor David Boardman remarked on the white space in last night's conversation:

"Town Hall event was powerful pep rally for more money for higher-education," Boardman tweeted, "But little said about where money will come from."

Exactly.

That higher education is facing a funding crisis is not news to the kind of people who would show up for a Town Hall forum on higher education funding. Tuitions are rising, top faculty are being poached, and at 48th out of 50 states in baccalaureate capacity, we continue to fall far short of meeting our state's needs.

Our public colleges and universities are in crisis, that's one thing on which everyone in the room last night agreed. But despite the dire economic consequences of doing nothing, it's a crisis, apparently, that nobody wants to pay to fix.

 

Comments (19) RSS

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Martin H. Duke 1
I'm not sure if all your qualifying words excluded him, Goldy, but Steve Sarkisian brings home $2.25m a year from the UW. So if it's above Young's pay grade, it must be up to the football coach.
Posted by Martin H. Duke http://seattletransitblog.com on February 2, 2012 at 2:24 PM
Goldy 2
@1, Coaches are not paid by tax dollars, but rather by concessions and other revenues.
Posted by Goldy on February 2, 2012 at 2:28 PM
3
University Presidents are overpaid and have lost touch with the faculty, students, and communities they are meant to represent. The best thing that can be said about Young is that he's not Emmert, not that he's ever demonstrated any special merit in his position.

All that said, when you write:
Young's total compensation package comes to $802,000 a year

and compare that to:
(Governor Chris Gregoire, by comparison makes $166,891)

You're comparing Young's total compensation - including salary, pension (including a tenured professorship), housing in the President's Residence, a $12,000 auto allowance, and permission to sell his prestige as UW President to selected corporate boards - to Gregoire's base salary, not including housing, pension, or anything else. Young's base salary from the state is $550,000 a year, plus $200,000 a year that he forfeits if he stays less than five years. The proper comparison is $750,000 to $167,000, which achieves all the emotional impact of the comparison you make without being sloppy or erroneous.

PS also note that the total compensation estimate used in the article you link appears to significantly undervalue Young's non-salary compensation, which seems to be at least $150,000 (not $50,000 as the article appears to assert), even before you factor in the rent-free staffed mansion and the tenured professorship. The difference may derive from the article not counting the money paid to the UW President by outside corporate boards, even though it's pretty clear that money is going to the UW President because of their office, and so it could be argued the state should get a big cut of it.
Posted by Warren Terra on February 2, 2012 at 2:55 PM
4
@#2
When last I looked - quite some years ago - the coaches were paid an absurd sum from state revenue - which, yes, includes money paid for tickets, concessions, and television rights - but then got a still-more absurd amount of money from corporate sponsorship: endorsements, television appearances, even for forcing their "student-athletes" to wear certain brands of shoes and other garb. Given how much money they accrue from their position as coach, I've never seen why the school should pay them at all - indeed, the school should charge them a commission on all these wonderful earning opportunities it makes possible for them.
Posted by Warren Terra on February 2, 2012 at 3:01 PM
aardvark 5
"It's above my gay parade"
so it seemed
Posted by aardvark on February 2, 2012 at 3:06 PM
6
They can start by cutting Young's compensation in half.
Posted by keshmeshi on February 2, 2012 at 3:07 PM
rob! 7
It's remarkable how much buzz-speak is present in all of these discussions about university finance. Even the talented Susan Desmond-Hellman (MD/MPH), gazillionaire former Genentech exec and current chancellor (campus president) of UC-San Francisco, throws out stuff like this:
Desmond-Hellmann said that she and her leadership team believe that UCSF needs to “make changes to UCSFʼs business model to reach our aspirations of preeminence.” UCSF is looking at options that include:
• Evaluating new and enhanced growth opportunities for UCSF;
• Examining UCSFʼs financial relationship with the UC system; and
• Exploring alternative governance models
(UCSF is unusual in that it is all graduate-level health sciences [no undergraduate], has enrollment of only ~3,000, and consequently gets only about 1% of its total revenue from tuition.)
Posted by rob! http://www.youtube.com/watch?v=QZBdUceCL5U on February 2, 2012 at 3:12 PM
8
The state community & technical college system, however, has come out in support of a revenue package. They won't specify what kind of revenue, but at least they have the cojones to say it's needed. Note that community colleges have neither the salaries nor the administrative structure the four years have and their budgets, which have also been severely cut, have an even bigger impact on their students, who are most likely working adults. No community or technical colleges were represented last night. You would have heard a different story.
Posted by More Pie on February 2, 2012 at 3:16 PM
9
Cut their pay and send them home?
Posted by RonK, Seattle on February 2, 2012 at 3:31 PM
Sir Vic 10
So you had a room full of 6 & 7 figure salaried people, and none of them volunteered to take a tax hit, or make waves that might cost them that large salary? What else did you expect?
Clearly, these aren't the people to turn to for solutions. Their self-interest is too great.
Posted by Sir Vic on February 2, 2012 at 3:34 PM
Fnarf 11
@2, bullshit. That's a distinction without a difference.

The revenue from concessions, etc., belongs to the UW and thus to the State of Washington. Sarkasian's salary is paid by the UW and thus by the State of Washington. The football and basketball programs like to pretend that they are autonomous organizations affiliated with but not a part of the University, but they are not. A salesman who works on commission is still an employee.
Posted by Fnarf http://www.facebook.com/fnarf on February 2, 2012 at 3:37 PM
Goldy 12
@11, Whatever. The point remains that Young is very highly paid—one of the highest paid officials in the state by any measure—yet he shrugs of a question about tax revenue by saying that it's above his pay grade.

If believes we need additional tax revenue to help fund higher ed, he should say so. If he doesn't believe we need more revenue, then I suggest he enroll himself in some freshman math classes.
Posted by Goldy on February 2, 2012 at 4:14 PM
13
Isn't this the same Young who once clerked for Rehnquist on the US Supreme Court, and authored that brief on the decision to dump the mentally ill out on the streets of America?

Just wondering???????
Posted by sgt_doom on February 2, 2012 at 4:19 PM
14
It's a very real and tangible distinction. A salesman whose compensation is 100% commission does not represent an expense to the employing institution.
Posted by Reader01 on February 2, 2012 at 4:30 PM
15
@#14 Reader01,
That's silly. If I buy a washer/dryer or a car, I don't care whether the salesperson is paid an hourly rate or a commission: I pay the price I'm willing to pay for the item. The salesperson's pay comes out of that price, but (except for my standard workplace-justice concerns) functionally I don't care whether they get a cut, get paid an hourly wage by the store, or get paid a salary from a corporate headquarters half a world away. The money for the salesperson is coming out of the revenue they bring in to their employer - and one way or another, their employer is paying them.

I suppose your analogy might hold true when the salesperson buys their own stock and operates independently - say, when they're a victim of a pyramid marketing scheme. But in this case, the UW Football coach is paid by the state to operate a state-run enterprise that allegedly brings in more money than it costs. That doesn't make them an independent entrepreneur paying their own salary without using state funds any more than the CEO of a successful publicly listed company is independent of their shareholders' representatives.

Would you say that Parking Enforcement officers are not paid by the city? After all, they probably pay for themselves in fines levied;certainly pay for themselves when you consider how little revenue the meters would bring in with no enforcement?
Posted by Warren Terra on February 2, 2012 at 4:52 PM
16
The athletic department is funded through television, booster, and ticket dollars. If the rest of the University was as successful at marketing itself there wouldn't be a problem. Also I haven't seen any discussion about the absurd amount spent on capital improvements, and other perks. Having been a student at a selective liberal arts college in Portland, I was amazed at how loosely the school's pocketbook was managed. In our eyes the school was also spending more money on sports than it should of been, it's clearly not just a problem for the big state schools.
Posted by pioneer on February 2, 2012 at 5:01 PM
17
The legislature should let it slip that they are considering selling the University System, all of it, to the University of Phoenix. That would shake some ideas for revenues out of those college presidents, out of those assholes at Microsoft and Boeing also.
Posted by ratcityreprobate on February 2, 2012 at 6:14 PM
lauramae 18
I think that the presidents likely agreed beforehand that not a single one of them would offer any speculation on revenue. To do so invites headlines the next day stating that President X says taxes need to be raised. The text of the story would then focus exclusively on size of their salary and compensation package without coverage of anything else about the topic. It's a way for Washingtonians to completely avoid having to consider how much it costs to run a university, and to deliver curriculum as well as the programs that make a university appealing to prospective students and to the current students. In a state that is very much true to its 48th place ranking, everyone still believes they completely understand waste and fat in the budgets (useless majors, athletics, faculty salary ---as examples).

In depth, complex digestion of information about the costs of higher education are most certainly above the pay grade and capacity of main stream media to understand and report. Not a single one of them ever discusses the issue in the detail you did here, for instance. So it isn't helpful to offer the simplistic media (King5, Seattle Times, TNT) fodder for spewing their simplistic gibberish. It distracts from the focus on the institutions they are paid to represent.

Instead we should be all asking the legislature why they are pleased as punch to have won the prize of the most anti-education state in the nation with no incentive to improve the lives of its young people. We should demand to know from the legislators and the gubernatorial candidates how THEY would propose pulling Washington out of the bottom of the barrel in higher education achievement. Because, you know, that IS THEIR JOB for fuck sake.

Posted by lauramae on February 2, 2012 at 7:19 PM
19
While Goldy obsesses about Michael Young's pay, SLOG has not told us about the Republican State Senator who has proposed ADDING $900 million dollars to higher education!

Go To The-AVE.US : http://handbill.us/?p=13222

Michael Baumgartner, (R Spokane) has offered a constitutional amendment that wold require the State "fully fund" higher education. To add to the mix, Senator Baumgartner is running for US Senate against Maria Cantwell!

Of course, Senator Baumgartner claims that we can pay for this w/o raising taxes. It seems to me that the Dems, especially progressives, should support this amendment if only to force the issue of tax reform.
Posted by I am that I am on February 7, 2012 at 12:02 AM

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