November 19, 2001 'We're in for a bad couple of years,' Atkinson tells editors A worsening state budget picture--and the likely impact on the University of California system--dominated a recent interview with President Richard C. Atkinson at a conference of campus publication editors meeting in Oakland. UC President Richard C. Atkinson "We're in for a bad couple of years," Atkinson said at the November 9 meeting. "Hopefully, the economy will turn around in the latter part of 2002. That's what most people believe. And if that's the case, two bad years can be dealt with. If it goes on for four or five years, then it's a great problem for us." The president also touched on a range of other issues, including salaries, curriculum standards for K-12 education, and the state's Master Plan for education. Atkinson's opening remarks, and an edited transcript of his answers to questions posed by the editors, follow: "How many people here have joined the university since 1995? So, is it half and half roughly? Well, the people who were here before 1995 remember how tough the early '90s were. Economists would say that those five years were the most difficult years in the history of the University of California, even during the Great Depression and so forth. So we look like we're going into another tough period; whether it's a long period or short period is a little hard to discern. But those who've been here awhile know we've managed to survive downturns before. I don't mean to indicate it's not a serious problem, but as I said, we're in for a bad couple of years. Hopefully, the economy will turn around in the latter part of 2002. That's what most people believe. And if that's the case, two bad years can be dealt with. If it goes on for four or five years, then it's a great problem for us because we're in a peculiar moment in time, given the huge increases in undergraduate and graduate students that will be flowing towards the university. Everyone knows the numbers. The 50 percent increase in the size of the student body in this 10-year period is a big task to confront. And if we're trying to confront it with an ever-shrinking budget, it could really undermine the quality of the institution. And what's important to the state of California in my judgment is that we have to maintain quality, that we provide value to the state of California, to the extent that our programs, both our teaching and research programs, are truly outstanding. So with that, shall I open it up? Q: Do you think some of the midterm consequences of Sept. 11 may be to accelerate the international aspects of both our education and our relationship with other cultures within UC? What will the impact be? A: Let me begin by saying that our involvement in international affairs is already quite unusual. You just need to look at our Educational Abroad Programs or the range of issues. . . . My own sense is that the university is deeply involved in these matters. I went out to the Livermore Laboratory last Monday and, simply put, just about everything that's going on in the national scene in terms of chemical threats, biological threats, nuclear threats were located right here at the Livermore Laboratory. The governor asked for potential members to an emergency task force that he was setting up. And we provided--I think it's a public document--a long list of names, and the governor's task forces are just loaded with UC people. There's incredible talent in the university on all fronts--international relations, but also technical fronts. You might be intrigued to know that right now in Washington, D.C., there are dozens of detector devices that are sampling air quality on a continuous basis--all devices developed at Los Alamos, all being organized and run by Los Alamos and the testing of air samples being done. It's really stunning what goes on at the University of California and how central our effort is. In fact, I just signed another letter within the last half hour to (Homeland Security Director) Gov. Ridge, inviting him to come out to the university to visit the Livermore Laboratory to see what's going on. I mean, the area of cyber-security is a major issue for the country, and tracking down the use of the Internet is also a major issue. There are computer scientists--our huge supercomputer facilities, which can't be matched anywhere in the world, are the core to the National Security Agency's efforts and people at the NSA said, "Thank God there is the University of California that can look to the future rather than the immediate issues of the day." So the university is going to play a very significant role in the events that unfold. . . . Q: When you said earlier that you felt that more than a couple of years of hard economic times could lead to a dilution of quality, were you thinking in terms of more teaching or research? Could you be more specific about that? A: I think on all fronts. I mean, how do we fund our research? We fund our research in large part, except for some funds from the state in agriculture and a few small amounts of funds, the basic funding of our research programs comes from the ability to attract faculty who can compete at the national level in a peer-reviewed process to receive support. And we are an incredible institution. I don't have the dollar numbers in hand, but no one can match us in terms of the flow of federal dollars. Well, you might say, that is the system. Well, it is the system. We have nine or 10 campuses, however you want to count it at the moment. But the level of funding that flows to these campuses is quite phenomenal. The top seven campuses in the United States that receive federal funds--three of those campuses are UC campuses. And the other three or four are private universities. So no one matches the University of California in the quality of faculty we have. And that, in turn, I believe, defines the quality of education that students receive, the quality of the research programs, the quality of grad education, the incredible contribution the university makes to the economy of this state. This may seem a little too strong, but if you look at the state of California before the downturn of the economy, the 1980s was a state that was very dependent on aerospace and on defense. In the past in California, we went into recessions later than the rest of the country, never as deep as the rest of the country, and we came out early. So when the rest of the country had tough times, we noticed it, but it wasn't that harsh. This time, it was much deeper than the rest of the country; it was earlier and it lasted longer. And it was because of the huge cuts in aerospace and defense; those haven't changed. That world is the same. But what we've done is create literally hundreds and hundreds of new companies that are not the IBMs and Hewlett-Packards of the world, but they are huge companies in terms of employment and are just driving the economy of the country. . . . And when you look at those companies--I won't say it's just the University of California--but it's the great research universities of the state that have been really key to driving that. You look at the names of the companies, where they got their start. Open the paper this morning. What's the company--Intel trying to locate facilities near UC Berkeley and in the Berkeley area. For what reason? To be close to scientific activities. Is that good for teaching? Absolutely it's good for teaching. It means the students that come through the University of California are at the cutting edge of their field. And you know in this new economy . . . what's critical are young people who come out really skilled to contribute and not just to follow the rules of some earlier period in terms of approaches to problems. Q: With Tidal Wave II being our biggest challenge, has there been any talk about an enrollment cap or some way of controlling or slowing down the growth until the economy picks up? A: Well, first of all, Tidal Wave II is a real worry; but if you look at it and project it out, you hit a peak about 2010 and then it really drops or is flat for the rest of the next decade. And the good predictions are 18 years out, but these projections usually turn out to be about right. So we've got this incredible increase through this decade, but then things really do level out. So we are going to get a breathing space after this period. Then the question is, well, but it's an awfully fast rate, and, given if we have two down years, what about that? Can't we do something about it? Obviously in the budget discussions that are going on now, there is the notion of capping our enrollments. But you know historically, we've always taken the view that we would admit any student to the University of California--to one of our campuses--if they fell in the top 12.5 percent of the statewide high school graduating class. If we were to walk away from that, I think it would be a pretty harsh event for young people in this state. So what am I saying? Should we continue to admit students and let the quality of education deteriorate? That would be a poor policy to pursue. I guess I'm not willing to say what we should quite do at this time. I think we have to see how this plays out. . . Another possibility is to increase fees. We've had extremely low fees that are going down at a fast rate, given the cost of living. . . . And when we have fee increases, we don't lock out poor students because half of the fee increase goes into financial aid. So that could be a way. The governor, on the other hand, has said no fee increases while I'm governor. And so I think from a political viewpoint, it would be hard for him to introduce fee increases. But that's certainly something we have to consider. Some people have said we should slow down the development of the Merced campus. That doesn't really buy us anything. I could describe why that doesn't buy us anything, but money for the buildings there is already in place. To slow down the initial development of the campus would really just save a small amount of money, hardly worth noticing because they'll have a small number of recruits to the faculty in the next several years. Summer sessions, which we think are important--we had three campuses start summer sessions, with intentions of going 3, 3 and 2, I guess--we probably won't be able to do that, which is really unfortunate because summer sessions were really key to our ability to deal with the flow of students to the university. So there are a lot of things on the table, but the simple fact is we have this year's budget in place. The governor is going to ask for some cuts in that, and we'll have to see where those cuts come out. But what we're really talking about is next year's budget. And you know how this is going to go. We're going to go through the spring, through the summer with hearings, there will be incredible back and forth activity. And given the election year, maybe we won't have a budget for well beyond the July 1 deadline. Any notion of how we're going to quite deal with this--it's not as though the university is told "here's the number of dollars, now do what you're supposed to do." It's back and forth, and back and forth, and where we come out in the priorities of the legislature and the governor. . . . Q: Did you indicate that you're going to see the funding of summer session on the three campuses that have the pilot project, but not to expand to the next three? A: I knew I shouldn't be that specific. (laughter). That is one of the ideas that is floating about. Q: What about the bond measure for next November? What's that going to be? A: Well, first of all, before I respond to that, the governor is thinking about another bond issue that would be used to speed up construction of facilities in the state. And we would play a big role in that. So we've got six or seven major buildings we could go into construction on much earlier. And I hope the governor goes forward on that because there's nothing better than building buildings in the university in down periods. What typically happens is when the economy is . . . good, we get money to build. And then we get these incredibly high construction costs. When the economy goes down into the tank, and we could get good construction costs, we don't have any money to build. So that's one thing I hope the governor pursues, and we're trying to encourage him as best we can to pursue it. The other is the bond . . . for higher education and K-12. As you know, we are linked with K-12. We have a good agreement with K-12, and higher education. The community college issue has been complicated as to what portion they should get. But I think we're now resolved on a reasonable relationship between the different sectors. I think K-12 believes they need us, and we believe we need them. So you'll have to look at the polls as we get closer. We're optimistic but I would probably say every President's Office has been optimistic, and not all of them have worked out. Q: Could you speak on the philosophy on how we might handle staff and faculty salaries as the way to deal with the budget? A: Well, you know our salary structure is tied, in a certain sense, to the state's. In certain areas, it's directly tied to what the state is paying. In the area of faculty salaries, it's tied to comparison-eight institutions. And clearly we've fallen way behind in faculty salaries. The debate is whether we've fallen far behind in staff salaries or not. You're not going to quite like what I'm going to say, but the studies that we've seen are that we're not very far behind in staff salaries. This year, we will be giving 2 percent salary increases, plus the 3 percent CAP. And you know what I mean by the Capital Accumulation Program. Now the CAP isn't very helpful to someone with four children and no other income except the staff salary income. On the other hand, it will accumulate toward retirement and it is 3 percent. It's not an increase in base salary. Two percent is pretty miserable in this period, but it is what is judged to be comparable to what the state is doing. And that's where we got it. . . . I would argue that the real role of unions in the University of California should be to be sure that those comparability studies are correct and the like. You hear a lot about us giving salary increases from .5 to some higher number. It's with regards to the faculty that we have a complicated problem because every three years a faculty member has a merit review. . . . We have our cost of living increase and our merit pool. And we have to pay the merit pool because a faculty member who happened to get caught in a year when there were no funds available--we've been in court being sued for that. . . . Q: As we go into a recession, what I hear you saying is that if the state needs to give its state employees 5 percent less in order to help balance the budget because the money is not there, it's likely that will happen here. A: I would say yes--I would say that whatever the state does for its employees, we're going to end up getting the same. On the other hand, what's not taken into account is our benefit and retirement system. I can't debate that today, but I really believe our retirement system is far better than the state's. In the end . . . people have to look down the road a long way to that, but I think it's an extremely good retirement system. So the question you're asking is what can the staff expect over the next couple of years. What happened in the early '90s, we did everything we could to protect the faculty. And we really cut back harshly on the staff and we cut back on staff support, administrative computing, and the like. That's been a real drag on the institution. We've been trying to recoup that over these last six years, but we recognize we haven't. We also recognize that a lot of our administrative systems are really not where they should be. So it's one of those issues. . . . I'm trying to be direct and honest. Q: We read today that there's going to be a joint Ph.D. program with the CSUs. When you made your remarks a little earlier with maybe having some of the top 12.5 percent of those students flow through the community colleges, it just made me start to think. Does this mean that given our times, that the Master Plan may be looked at a little differently? What's the pressure these days about that? A: There is a statewide review of the Master Plan, but that includes not just higher education, but K-12. This happens about once every 10 to 15 years. The Master Plan has been in effect since 1960. From my view, it's served the state very well. There are all sorts of recommendations about how it might be changed. I don't think I'm the one to cover all those recommendations. But first of all what was announced today had nothing to do with Ph.D.s. Ph.D.s are in no way affected by the announcement today. It refers to one degree: the doctorate of education. The Ed.D. degree. We have always had joint doctorate degrees with the CSU system. We have joint Ph.D.s with the CSU system. But we've always had joint Ed.D.s, but they've sort of fallen by the wayside. There's a sense that the state is really desperate for the training of more Ed.D.s, particularly for expansion of the community colleges for leadership in the K-12 schools. Some disagree, but CPEC (the California Postsecondary Education Commission) has indicated they believe that all the Ed.D.s necessary are being produced on the other end. There are other arguments about the expansion and the high cost of many of the Ed.D. degrees because they are through private universities where they have huge tuitions. . . . What happens in these joint degree programs is that they get slowed down . . . with {faculty coordination}. So there's a special overview group just for the Ed.D. degree to ensure that we move ahead. We will be doing a study of the various regions of the state to determine the demand for Ed.Ds. in that region. These are part-time degrees. . . . And I think it will be a cooperative effort that will be a good one. But I don't see it changing the basis of the Master Plan. Clark Kerr when he talks about the Master Plan . . . points out that his own view on where it has fallen short is that he thought there would be more joint degrees. And he thought the transfer process from community colleges would be a little more vigorous than it is. We've made certain commitments about transferring. What's interesting is that students who enter the University of California having spent two years in community colleges do spectacularly well. It may be that it's a very select group--who knows all the reasons? But transfer students do very well at the University of California. I think it's a wonderful way to go to the University of California, particularly for a young person who is not ready for the chaos of the UCLA or Berkeley, the large classes, to spend two years at community college where there's personal support within the smaller classes, and not the competition, and then they enter the university in the third year . . . . Q: We've had the perspective of a chief executive on a campus and now here at the central administration. We'll be embarking on a new cohesive communications effort. With your experience, will we be able to get the leadership that's needed--the top-down leadership and the other chancellors--to really make it happen? A: First of all, I think it's more important than ever. Because in a certain sense, California newspapers don't cover California the way they used to. . . . They tend to just focus on the horror stories and not on the real substance of the university. So I think we have to do a really good job in communicating the great things that the university does. As a chancellor, one of my unhappinesses was when people would say we have to do such and such, but they never were very clear. . . . There would be this rash of "Oh we've got to contact legislators." For a chancellor or anyone, there are only so many contacts you can make a year. You've got to reserve your powder for the right time. So we really need a plan. . . . And part of that plan is really communicating clearly to campuses when there is a moment in time when a certain special effort has to be made. And this is not a shotgun effort, but that we do it at the right moment for the right campus. There have been several presentations along these lines to the chancellors and executive vice chancellors. I think people are pretty excited about what can be done. . . . Q: In recent years, the state board of education has given us curriculum standards, standardized exams, exit exams, various reward and sanction programs. Are you concerned about UC's role in the birth of those things as well as implementation? A: Absolutely. I mean absolutely. I believe there needs to be a certain amount of standardized testing. At certain key points, we need some standardized tests. I'm not against standardized tests across the board. But we've just thrown all sorts of things in that make no good sense. And I'm really distressed by some of the curriculum standards. Bluntly put, I think they're foolish. The curriculum standards for mathematics--for high school--I'd be surprised if many math majors could deal with the range of topics that they think high school students should deal with. There's always this view, put everything you can think of into the pot, and that's the curriculum standards. And those standards in theory define the tests. It just seems foolish to me. And I've said that to the State Board of Education. That's why I've been on the path I have been with regard to the SAT. I do not want to judge students on some notion of inherited and innate ability. I want to judge them on the basis of achievement in the courses the University of California expects of students coming to the university. So what I want is instead of the SAT, a set of standardized tests that are correlated and clearly demonstrably related to the courses we ask students to take. We now test students for six hours. I'd be happy with four to five hours of a test given sometime at the start of the senior year, but focused on the curriculum we've expected them to study with the clear understanding that if a student performs badly, they know why they performed badly. If you look at the SAT, I think most people will tell you they don't have the vaguest idea how to prepare for it, except for these special SAT camps and so forth. That relates to this other issue. I want tests that are clearly correlated, that if a student doesn't do well, its not because he's not bright enough or doesn't have the ability. He just hasn't done the necessary work. And then somebody has to ask at the level of the school "why hasn't he done the necessary work. It is his fault or the school's fault." I'm not sure I've made myself quite clear. But why don't you follow up on that? Q: The other part of the question is how can UC exert a little more control on that situation? A: There's just a little as to how much you can do at any one moment. You may not be very aware of this, but I've been very active on the whole issue of . . . having a coordinated set of tests through K-12, and so there has been a group advising the State Board of Education to try and get some clarity. I testified not so long ago about that. One of the things in my testimony is that I want a writing sample from students. I don't want just multiple-choice questions. What's so interesting about these analyses we've been doing on the SAT is that the best predictor outside of high school grades of performance at the University of California is the writing sample. . . . Q: Rather than say what you will or won't cut, or by how much, do you have any areas of the system that you think are sacrosanct or should be of the highest priority when it comes to not being cut? A: The trouble with that is those lists are misunderstood. A lot of things have been pushed on us by the legislature and by special interest groups over these last six years. And I'd like to cut some of those. We've told the governor's office we'd like to cut X,Y, and Z. But the special interest groups that have pushed them on us will be pushing back with great vigor. I can't do that. Obviously there's the research area--we're going to have to cut some there; we're going to have to cut some in the teaching area; we're going to have to cut some in the backup of computer systems. . . . It's just not easy to do. Any list of priorities would be a mistake for me to try to indicate. You really have to hear the various things being considered. . . . So I can't give you a prioritized list.