As noted in prior blog posts, in January, the governor designated a sum
of $90 million which he said could be used (or not) for UC pension funding. The problem with that approach is that UC has
always been free to allocate what it gets from the state for the pension. By alluding to use for the pension, the
governor triggered a recommendation from the Leg Analyst that since the $90
million exceeded pension contributions, it should be trimmed to equal
them.
Given past cutbacks, however, $90
million could just as well be seen as a general allocation, unrelated to the
pension. So cutting it back to match the
pension was as arbitrary as the governor’s allusion to the pension.
In the May Revise, the governor cut the $90 million down to
$52 million which now falls short of the pension contribution. So now the Leg
Analyst says to raise it to the contribution.
It’s
not clear whether this give and take should be considered the result of pension
allusion (by the governor) or pension illusion (the latter being the notion
that the state is somehow taking responsibility for the UC pension, as it once
did). In any case, excerpts
from the Leg Analyst are below in italics:
January Proposal. ... For
UC, the Governor … proposed to forgo any future adjustments for retirement
costs. For 2012-13, however, the Governor proposed a $90 million base
augmentation for UC which the administration suggested “could” be used for
retirement contributions. Yet, the administration emphasized that this funding
was not being proposed specifically to fund UC’s pension costs.
Revised Amount Proposed for UC’s Pension Costs Still Arbitrary. In addition, we find that the Governor’s
May Revision proposal for a $52 million increase for UC is just as arbitrary as
the $90 million increase he had proposed in January. We continue to encourage
the Legislature to link any state funding for UC’s pension costs to actual
costs. In January, we were provided with information from UC that indicated
that its additional costs for pensions in 2012-13 for state General Fund and
tuition-funded employees would be about $78 million. (Specifically, $36 million
is related to the General Fund and $41.5 million related to tuition.)
=====
…(W)e recommend that
the Legislature only provide UC with an augmentation for its pension costs that
is based on actual cost data provided by the university.
[Click on image above for clearer view.]
There is discussion in the document to which the link above applies about efforts by the governor to move both UC and CSU away from a “workload”
methodology for calculating their budget needs to some kind of fixed dollar
allocation system in future years.
Certainly, there are issues related to that concept but each year a new
budget is ultimately adopted. Thus,
whatever might be said about future years is not binding. It’s not clear, however, in an era
of arbitrary cutbacks, what workload methodology means. The drivers of workload budgets are
enrollments and costs. When the state
doesn’t pony up for the workload total, tuition goes up and/or services are
cut. Seems like there is illusion
regarding general funding as well as pension funding.
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