California's College Dreamers

The Wall Street Journal has an editorial today on student protests in the UC system, entitled "California's College Dreamers." The piece opens by chastising students for not investigating the tuition hikes enough to discover "that compensation packages won from the state by unions were a big reason for the hike."

The editorial notes that the UC system lost out on $800 million dollars alone this year after the state diverted $3 billion to cover rising government worker pension costs. The skyrocketing costs the editors attribute to a 1999 bill in which state legislators refigured pension benefits on the assumption that "investment returns would grow at a 8.25% rate in perpetuity." Among other things, the bill refigured benefits for public-safety employees that had a dangerous formula: you could retire at age 50 and receive 3% of your final year's pay times number of years on the job. "If a firefighter started working at the age of 20," the Journal calculates, "he could retire at 50 and earn 90% of his final salary, in perpetuity." One fire chief in the state enjoys a yearly pension of $284,000. More than 15,000 people in the state have annual pensions greater than $100,000.

The editorial proceeds to lay out the future finances, and if you live in California they should frighten you whether you're a student or not:

"The governor's office projects that over the next decade the annual taxpayer contributions to retiree pensions and health care will grow to $15 billion from $5.5 billion, and that's assuming the stock market doubles every 10 years."

Expect higher education budgets to continue to help pay the bill. The editorial concludes on a sour note:

"Memo to marching students: The governor can't save you. You guys need a new legislature. This one is selling you out. Organize an opposition and vote them out in November. Plan B is quit school and become a state billboard inspector."

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Comments

1. marktropolis - March 11, 2010 at 01:48 pm

Wow, an anti-union screed from the Wall Street Journal. Who would have thunk it. That and a not so subtle bashing of government employees (or as the author put it "Who needs college when you can get a state job"). Perhaps we can consider the impact of Proposition 13 on all this? Instead of heading for the well-worn low-hanging fruit of "it's the unions' fault!" Oh, and let's not forget that bargaining agreements have to have at least TWO signers: the union and the employer.

If you're going to beef about union benefits, keep in mind there was someone else in the room who agreed to them. Why is it that we never blame employers for union benefits?

This is very similar to the front-page article in this week's Newsweek that puts the blame for the condition of our public schools squarely on the shoulders of teachers. Forgetting for the moment that there are a few other players in this enterprise, like principals, superintendents, state and local boards, local, state and federal legislators.

But it's so much easier to blame those unions.

2. markbauerlein - March 12, 2010 at 09:49 am

Proposition 13, marktropolis? You want to blame an initiative 30 years old for what has happened to higher ed budgets?

3. marktropolis - March 12, 2010 at 04:34 pm

Um, in California? Let me think. Yeah.

30 years of restictions on how the state legislatures (and local governments) can raise money? Tends to have somewhat of a cumulative effect. Given that MOST jurisdictions in this country fund their public education systems through property taxes, when you put a cap on those taxes, well, it's just simple math really.

4. markbauerlein - March 12, 2010 at 04:50 pm

And who put a cap on property taxes way back then, marktropolis, and why?

Also, having attended the UC system when Prop 13 was passed and for several years after, I didn't see any adverse effects of it on my teachers, resources, or facilities.

5. goxewu - March 15, 2010 at 04:18 pm

Prof. Bauerlein was born too soon.