Note: this is a cross-post from The Realignment Project.

Introduction:

In part 1 of a New Deal for California, I discussed why any effort to rebuild the state must begin with a frontal assault on high unemployment as the only reliable means of achieving budget stability – as opposed to self-defeating quests for balance via austerity. In part 2, I studied how the quest for a more perfect democracy is inextricably linked to a renewal of democratic control over the state's own revenues.

Today, I want to discuss two areas of policy that are among the largest spending categories in the California state budget, but which also represent two faces of the state, and two approaches to developing its youth, and two sets of values – namely, education and prisons.

Arnold's recent proposal to put a floor under higher education at 10% of the state budget and a ceiling over prisons at 7% of the state budget is only the most recent example of a long trend of discussing the two in the same breath. As I discussed in the linked article, Schwarzenegger's approach is fundamentally flawed, a mirage of egalitarianism masking a reality of utter callousness. A moral society cannot pay for the future of its most talented youth through the deliberate immiseration of its least advantaged.

However, a New Deal for California will have to grapple with the reality that California will either educate or incarcerate its young, and that the power to choose lies with us.

Higher Education:

In my previous posts on higher education, I've tried to get across the idea that the purpose of public higher education is to expand and improve the functioning of democracy, that higher education is a social and public good, not a private commodity, and that the way a public university is run speaks volumes about the values of the society. If there is an overarching theme here, it's that the choices a state makes on higher education both reflect and shape the nature of its society. A state where the children of the poor and the children of the rich are equally limited only by the boundaries of ambition and ability will be a society is genuinely one of equal opportunity and healthy, meritocratic competition. At the same time, states should also think of higher education as a social investment in a high-road economy, distinguished by high levels of skill and education, high wages, and high living standards.

A New Deal for California is absolutely about making that investment and choosing that high-road, but one of the things you see in public discourse about higher education in California in progressive circles is a certain fuzziness – when it's razor-sharp conviction that wins the day in politics. There's the required genuflections in the direction of the 1960 Master Plan, and perhaps even a statement about how “college should be free!” or how cheap it was to attend the U.C when they were young, but nothing about how we proceed from where we are to were we want to go.

By contrast, I think a New Deal for California had to start with a genuine commitment to a new Master Plan for California that charts a path for gradually reducing tuition to $0 for the U.Cs, CSUs, and Community Colleges over the next 20 years. We should be clear about how much this will cost: it will take about $1.7 billion a year to make the U.C tuition-free, about $2 billion a year to make the CSUs tuition-free (about $5,000 a year in tuition times 417,000 students), and about $1.78 billion a year ($614 a year times 2.9 million students) to make the Community Colleges tuition. Altogether, we're talking about $5.8 billion per year, or an extra $290 million per year.

Assemblyman Torrico's AB 656, which would establish a 10% excise tax on oil extraction to provide about $2 billion a year to higher education (a system already in place in Texas, which funds the University of Texas through an oil excise tax). That gets us about a third of the way to our goal. The rest could be assembled from a variety of revenue sources – this is not beyond the means of one of the richest states in the Union,  and one of the richest economies in the world.

One idea that has been suggested in the United Kingdom by Ed Milliband (Labour M.P, Shadow Energy and Climate Change Secretary) is to replace tuition costs with a “grad tax.” The idea would be that, instead of requiring students to pay tuition and go into debt up-front, which acts as a prohibitive burden for many working-class students and constraints the future career choices of graduates, that we instead ask graduates to pay a progressive surcharge of between “0.25% and 2% of their income over a 20-year period,” enabling graduates to contribute, according to their ability to pay, to higher education whether they work for a non-profit or a Fortune 500 company.

As I have said before, the ultimate goal that we should be thinking about is not 100% of the youth population attending university, but rather that 100% of the youth population being able to achieve whatever level of skill or training that their ability and ambition provides for. This means treating skills training- whether it comes in the form of a union apprenticeship, vocational or technical college, or a professional course in a community college – as just as important as any other form of education. It means paying more attention to helping students get employed as well as enrolled (such as is the case in the German and Japanese education systems). And it means making sure that students graduate high school able to take advantage of higher education/training.

A Word About K-12:

I'll only say a few words onK-12 education, since it's not an area of public policy that I've actually done much work on. As someone who's been a TA at the U.C for four years, I can certainly attest to the fact that California needs to do a better job at preparing students, both for college and employment, because it's quite surprising how many of the top 12.5% of high schoolers in California have real problems with constructing essays or interpreting reading.

Here's what I'll say – I believe that the “Educational Equality Project” reform community has over-emphasized college preparation, has tended to over-emphasize incentives over resources, and relies too much on an economistic model of corporate efficiency. I think primary and secondary schools should emphasize employment as well as college, and experiment with the German and Japanese model of partnering with employers to offer students additional paths for career development; in part, I think this comes from an approach to manifest class and racial inequalities that opts for individual, behavioral intervention (assuming that schools can “solve for” poverty without outside interventions on social conditions, and emphasizing college attendance without consideration for labor market conditions).

Moreover, I think reformers have under-sold the degree of resources that will be needed to correct inequalities in resources (which is why California needs to move to equalization of funding across school districts) as well as social and cultural capital. Things like increasing instruction time, providing tutoring to struggling students, and lowering class sizes are all well and good – I'd even add commitments to expand Head Start to 100% of those within 150% of poverty, and extend it, “Follow Through” style, to prevent “Head Start fade” in primary school –  but they will require a significant commitment of funds to work.

I think the rhetorical emphasis on incentives over resources comes from two sources: first, it comes from the unspoken recognition that a lot of the key policies adopted in heavily-promoted charter schools aren't costless, which raises questions about scaling. KIPP is lauded among EEP-style reformers, but a 60% longer school day/year, 24/7 teacher availability, and weekend work costs, and not just in dollar terms – 50%-plus turnover rates are common in KIPP schools. Second, it comes from what Matt Yglesias refers to as a “Green Lantern” theory about education – if teacher productivity and efficiency are what matters, then you don't have to deal with the fact that California schools are 43rd in the nation in per-pupil spending, because all you have to do is push teachers hard enough. At the end of the day though, resources are real and it is not impossible for California to commit to raising its commitment to the top 10 in the nation over a period of 10-20 years, similar to the commitment to tuition-free higher education as well.

Finally, as I've said before, I think the debate over accountability and results has become poisoned by the link between the models of accountability used by reformers and ideas about corporate efficiency, leading to a massive level of distrust among teachers and their unions. I've said it before, but it bears repeating – I'd be very interested to see how EEP reformers would react to an offer to have accountability and performance targets negotiated right into collective bargaining contracts, and put the unions in charge of and responsible for teacher quality.

Prisons:

All of this discussion of resources brings us to the piggy bank that both Schwarzenegger and I are hoping to use to improve the quality of education – California's overstuffed prison population, the second-largest in the nation. Right now, California imprisons 616/100,000 persons, and its prison population has been growing 500% over the last twenty years. This expansion has led to a growing budgetary burden, overcrowding, and a series of lawsuits over health and safety standards. No one particularly disputes that something needs to be done, but there are different ways to go about it.

Schwarzenegger's vision is to combine privatizationand outsourcing – essentially to shove our prisons off our books and avoid changing the way we deal with our offenders. This is morally unacceptable for any sane society. Private prisons are rightly notorious for corruption, abuse, and the further cutting of corners on medical care, living conditions, and safety standards. Shifting our prisons to Mexico is simply an attempt to do privatization without getting tripped up by lawsuits filed in American courts when the inevitable lawsuits alleging subhuman standards emerge. California should certainly commit to keeping prison spending below 7% of the state budget, but this is not a just way to do it.

However, there are ways to solve our prison problems. California's shift to drug courts and rehabilitation has paid dividends in the form of 10,000 fewer prisoners on drugs charges than in the 1990s, but there are still 30,000 prisoners on non-violent drugs charges who could be better dealt with outside the prison system. The bigger target is California's broken parole system – about 70% of parolees are re-incarcerated (the vast majority of cases being not new criminal violations but rather some technical violation of the terms of parole), at a rate that has increased six-fold in the last 20 years. As a result, about two-thirds of prison admissions are parolees rather than new offenders. There are better ways to handle our parolee problem than the current system of catch and release, and solving our parole problem would largely solve our overcrowding problem.

Dealing with these two factors would allow California's criminal justice system, including the police, courts, prisons, and parole systems, to focus on doing a better job with the prisoners we've got. This means more, not less, effort directed at deterring violent crime and higher rates of arrest; this means freeing up resources to separate out first-time and non-violent offenders from hard-core criminals and violent offenders, with an eye towards reducing our state's abysmally high recidivism rate. In the end, being smart about crime works better than toughness for toughness' sake.

On an ironic note, one of the few truly successful anti-recidivism strategies in the U.S has been the oft-targeted, poorly-funded college education programs. Expanding the commitment of college for all to the prisons might itself help to solve our prison problem.

Side-note – on Interdependent Parts:

In earlier segments of this series, I talked about the need for an overarching vision for California, beyond just the policy-specific pieces. To that end, it's important to see how education and prison policy fit as parts of a larger whole. For example, let's examine the impact of full employment policy and changes to democratic governance and revenue on these two areas of public policy.

To begin with, full employment would greatly increase the public revenues available for K-12 and higher education. It would also add on a crucial back-stop to our system of educational development, ensuring that U.C and CSU and CCC graduates who've received incredibly expensive training don't get thrown on to an overcrowded labor market (as is happening now) where they can't find work, leaving their training to go to waste. It also means that rather than focusing solely on college attendance as our only strategy for getting kids out of poverty that we can offer them a chance at high-wage full time employment. Prior to the unraveling of high-wage labor in the 1980s, a high school graduate who had neither interest nor aptitude for an academic career could get a job for life as a skilled, semi-skilled, or even unskilled worker and be assured of economic security and a middle-class standard of living. With full employment, there's no reason that we can't build our way to an economy that provides opportunity to those kids as well as the college-bound.

Full employment would also greatly reduce our prison burden. We know that anywhere from one-third to two-thirds of prison admissions are unemployed at the time of incarceration, that many property crimes are associated with unemployment, and that the increased difficulty of finding employment as an ex-offender is a major cause of recidivism. While certainly not a silver bullet (violent crime is not particularly correlated with employment rates), full employment can only help. (On a slightly more cynical note, one of the reasons why prison guard unions have resisted parole reform, decriminalization, and other efforts that might reduce the prison population is out of a desire to protect the jobs of their members. In a full employment economy, where workers could be assured of having a job, this political inertia could be more easily overcome).

A similar case is true for democracy and revenues. A more functional democracy, where legislators could more easily match our revenues to the level and kind of goods and services demanded by the people, is one where the kinds of commitments we want to make to both higher and primary education can be made, and where reforms to our prisons systems can be more transparently and directly debated and carried out.

Conclusion:

There are 159,000 students at the University of California. They are among the top 12.5% of our youth, the most talented, the best educated, with the greatest likelihood to succeed. There are 170,000 prisoners in the California prison system – they are disproportionately young, non-white, and less-educated. Even when they are released, they will find it more difficult to find employment, housing, and credit. To place the burden of the best prepared on the least prepared is to compound injustice with unfairness.

Note: this is a cross-post from The Realignment Project. 

Introduction:

(Note: finding precise figures and statistics about Blue Gold is not particularly easy. If my numbers here are off, I will gladly revise the piece)

My previous post about the U.C’s policy towards post-docs and other researchers whetted my interest in the travails of the public university, especially as it deals with the universal budgetary crisis faced by higher education during the recession and the underlying process of privatization faced by many public institutions.

The result is a new mini-series of posts about how to rebuild the public university going forward. And a good place to begin will be to make an important distinction about what isn’t a viable strategy for the renewal of the public university – the much-ballyhooed Blue Gold Opportunity Program that U.C President Marc Yudof has made his calling card.

Assessing Schwarzenegger’s Amendment:

Before I explore the nature of the Blue Gold program, it would be remiss of me to overlook the kind of late-breaking news that rarely happens in the world of policy blogging. In his State of the State Address, Gov. Schwarzenegger proposed a new constitutional amendment that would ensure that state spending on prisons would be limited to no more than 7% of the general fund budget and that state spending on higher education would be expanded to no less than 10% of the general fund budget. This policy would be gradually enacted beginning in the 2010-1 budget and culminating in the 2014-5 budget, by which point the transition from current spending would be complete.

It is unusual in the extreme too see a political 180° like this from the same man who created the 2004 compact with the U.C Regents that decreased state support for the U.C, increased student fees by 10% per year (directly creating the need for a Blue Gold program), and committed the U.C to privatizing its funding to compensate for the loss in state funding. More than 190,000 students and 103,000 faculty and staff no doubt wish that Governor Schwarzenegger had thought of his constitutional amendment six years ago.

So, what are we to make of Gov. Schwarzenegger’s road to Damascus moment? On one level, a commitment of this kind would be the profound change in public higher education in California since the creation of the Master Plan in 1960. As this chart notes, the state’s fiscal commitment to the Plan’s vision for universal, free public higher education has slipped inexorably downwards. For just this year alone, the proposed constitutional amendment would have meant $1.7 billion more for the University of California, easily outstripping the $813 million cut it received instead.

All is not sweetness and light, however.

• First of all, this proposed constitutional amendment does not answer the larger chronic revenue shortage that the U.C’s budget faces; 10% of a budget that has tumbled almost $60 billion since the beginning of the economic downturn, in a state in which revenue bills require a 2/3rds vote to pass the legislature, may not be worth very much.
• Second, a constitutional amendment that requires minimum funding would exacerbate California’s budgeting problems – given that Propositions 98, 49, and other so-called “auto-pilot” provisions such as Medicare spending and debt repayment eat up 90% California’s budget, carving out another 10%, even if that’s balanced by a reduction in prisons spending only further limits the ability of the state legislature to set policy priorities.
• Third, there’s a nasty little razor blade in the candyfloss: the privatization of California’s prisons. If you read the text of the proposed constitutional amendment, the California Department of Corrections is empowered to “contract with a private entity for the building of, operation of, transfer of inmates to or placement of inmates in private correctional facilities,” including staffing of all correctional facilities (both in terms of medical and security personnel), and the state is actually statutorily prohibited from reaching the 7% goal by releasing prisoners. Given the documented abuses committed in and around for-profit prisons, there is something morally monstrous with the idea that the futures of the top 1/3 of California’s young will be paid for by the destruction of the futures of its least successful youth. While this power is not mandatory – the Department of Corrections can choose to privatize or not – the text of the amendment does everything possible to make prison privatization an inextricable part of the whole.

In these circumstances, progressives cannot in good conscience support the privatization measures of the amendment as written – and even stripped of these measures, the measure remains a positive step but hardly a silver bullet either for higher education or the state budget. By contrast, conservatives in the Legislature are extremely unlikely to vote for anything that protects public higher education. Given that the governor knows this, it’s likely that this amendment (which Schwarzenegger has insisted will go through the legislature first) is but one more infuriating stratagem in a political career that has successfully alienated the left, center, and right of California politics.

Inside Blue Gold:

If something so seemingly progressive as a constitutional amendment that protects spending on higher education can turn out to be so complicated, what can we say about the Blue Gold Opportunity Program- a program designed to ensure that “”if your family makes less than $70,000 a year and you have financial need, scholarships and grants will cover your fees”? A free college education for poor and middle class kids, paid for by increasing fees on more affluent students sounds like an incredibly progressive thing – and people like William Bagley and Ian Ayres have argued the exact same thing.

The reality is that the Blue Gold Opportunity Program is nothing of the kind.

To begin with, it should be understood that the Blue Gold program doesn’t represent a commitment of the U.C to contribute more to less well-off students as it does a commitment of the U.C to shift as much of its costs onto outside sources as possible. The Blue Gold program is contingent on applying for Federal financial aid and state CalGrants – as their own website notes, “The plan combines all sources of scholarship and grant awards you receive (federal, state, UC and private) to count toward covering your fees.” The Blue Gold program only kicks in when all of your other sources of aid fail to cover the cost of education.

Second, Blue Gold only applies to covering the educational fees the U.C charges (over $10,000 after the rate increase) – which is only 37% of the estimated total cost of education, which the U.C estimates to be $27,000. The difference between the total cost of education and the fees works out to $17,000 a year or $68,000 over four years. However, the U.C may well be underestimating the cost of living – for example, U.C’s estimates for graduate student food costs ($5,000 per academic year) are twice what they estimate for undergraduates living off campus; likewise, transportation costs for graduate students are costed out at over twice what they estimate for off-campus undergraduates.

However, even if we assume that the U.C’s estimates are correct, their sample budgets for families are quite instructive. For example, a family earning $20,000 a year will have to come up with $9,100 a year (or 45.5% of yearly income), a family making $40,000 will have to come up with $11,600 (or 29% of yearly income), a family making $60,000 will have to come up with $16,100 (26.8%), and a family making $80,000 will have to come up with $22,600 (or 28.25%). A system where families making $20k or $40k a year are responsible for a higher proportion of their income than families making $60 or $80k a year is hardly progressive.

Supporters of the system will note that the same budgets assume a much lower family contribution for poor or working class families – but this hardly makes up for the fact that the difference will be made up for by their children. The U.C’s charts show that this model only becomes affordable if students find part-time work during the school year and full-time work during the summer, and take on loans of at least $5,000 a year. Thus, in the best circumstances, a U.C student will graduate with about $20,000 in educational debt, which takes years to pay back.

Should the student be unlucky enough to not find part-time jobs that allow them to save $266 a month during the school year, and $566 a month during the summer, over the cost of living, the actual debt load could soar much higher, potentially to $36-90,000 by graduation.  At a time when the state of California has a youth unemployment rate well in excess of 20%, assuming that students will automatically find employment is not realistic.

At the same time, the Blue Gold program only applies to in-state legal residents. This means that DREAM Act students (i.e, undocumented students) have to pay the full freight, no matter what their economic status. International students, who never become in-state residents, also have to pay the full freight whatever their economics status.

Beyond the Numbers:

While the under-the-hood statistics of the Blue Gold program are hardly progressive, the problem with with the Blue Gold Program runs deeper than just the financial issues. At its root, Blue Gold erodes the essential ideological justification of public higher education: that higher education is a fundamental right of citizenship because an educated citizenry is essential for a well-ordered republic, and because “Education, then, beyond all other devices of human origin, is the great equalizer of the conditions of men, — the balance-wheel of the social machinery...it gives each man the independence and the means by which he can resist the selfishness of other men.” In a republic, where the mental and material basis for independence are so important for empowering active citizens and where great concentrations of wealth can easily become anti-democratic concentrations of power, public higher education is essential.

By emphasizing higher education as an economic good with a market rate, where the benefit accrues to the individual wage-earner, Blue Gold undermines the case for why the public should support higher education at all. In its own literature, the Blue Gold program analogizes paying for education with paying for automobiles, and emphasizes that the major objective of a college education is a higher salary. If a college degree is the same as a car, just another consumer good, there is no public purpose for providing it. (Although a more radical argument might be to say that perhaps consumer goods should be publicly provided/subsidized.)

At the same time, by setting the middle class who must pay Blue Gold’s costs against the working class and poor who benefit from it, Blue Gold erodes the cross-class political coalition that is essential for shepherding public higher education through the legislative process. In this fashion, Blue Gold resembles not a progressive tax (which benefits the poor, the working class, and the middle class alike) but targeted welfare programs that superficially benefit the poor but in reality create huge political vulnerabilities that turn programs for poor people into poor programs.

Finally, we must understand what political role the Blue Gold program plays for the U.C Regents. It’s hardly an accident that the U.C’s 32% increase was paired by an increase in the Blue Gold program’s eligibility and funding; the Blue Gold program functions as political cover, allowing Yudof and the Regents to portray an unprecedented fee increase as essentially painless – look, poor kids aren’t going to get hurt, and we’ll even help out the middle class. Nevermind that in an environment of declining resources, higher tuition creates an incentive for the U.C to enroll rich out of state students who can pay the full freight over poorer students who will require extra resources to attend the U.C, Yudof says he’ll raise an extra billion for financial aid!

In other words, Blue Gold is the “human face” for the privatization of the U.C. A tuition-free institution meant to provide a right of citizenship is becoming an institution that approaches charging a market rate for a private commodity, but Blue Gold provides the appearance that nothing has changed. That’s why it’s wrong.

An Alternate Route:

As an inveterate optimist, I don’t like to condemn any structure without providing a blueprint of what we should put up in its place.

My suggestion is this – we should replace Blue Gold with a new Master Plan designed to gradually reduce tuition to $0 over a period of ten to twenty years, eventually re-establishing the social contract of public higher education in California. This would amount to decreasing tuition by a thousand (or five hundred) dollars a year, which is hardly a small order – it means that each year, we need to come up with an additional $159 million in revenue (to make up for $1,000 in tuition less per student) from somewhere. In other words, in order to make the U.C tuition-free, we need to find $1.59 billion a year in additional financing.

In the grand scheme of things, this isn’t impossible. For example, a constitutional amendment that established a 10%/7% requirement without Schwarzenegger’s privatization poison pill, even after compensating for the $813 million cut this year, would have provided an additional $887 million in revenues, or 55% of the total needed to make the U.C tuition-free. In future years, an additional $1.7 billion a year would easily set

Assemblymember Torrico’s AB 656, which would establish a 10% excise tax on oil (California is the only oil-producing state that does not tax oil) to fund higher education, would raise $1 billion a year for higher education and the U.C’s 1/3 share of that would come out to $300 million a year (or 18% of the total needed to make the U.C tuition free). That’s enough on its own to drop U.C tuition by almost $2,000 a year. While that’s obviously not enough on its own, AB 656 does show that it is possible to make the U.C a free public university by creating some form of independent financing stream.

Ultimately, the re-establishment of the free public university is an ideological statement about the kind of California we want to have. The resources are there – the question is whether we have the political will.