Texas’ universities should capitalize on California’s budget shortfall

(Exerpt taken from the Austin American-Statesman, opinion editorial by Isaac Barchas – Director of the Austin Technology Incubator)

Wednesday, August 12, 2009

barchas-isaacThe emergency budget deal that Gov. Arnold Schwarzenegger signed two weeks ago for California might bring to an end that state’s 50-year run as the home of the nation’s strongest public universities.

The deal cut $2.8 billion from California’s higher education budget. That’s more — a lot more — than the entire budget of the University of Texas at Austin. Combined with other economic factors, the result is an $813 million (or 20 percent) budget shortfall for the flagship University of California System.

This is a tragedy for California. Especially if Texas seizes the remarkable opportunity it presents.

Why? Because this crisis will hollow out the University of California’s most important asset: its world-class talent.

California now can’t compete in the global market for the best faculty. The University of California at Berkeley — perhaps the greatest public university in the world — usually hires 100 faculty members each year. This year, it hopes to hire 10. The University of California at San Diego — a bioscience powerhouse — will hire no new faculty. The University of California at San Francisco — a top-five medical school — will reduce its faculty by almost 15 percent.

Moreover, cost-reduction measures aimed at faculty and staff (such as pay cuts and furloughs) are expected to generate $184 million in savings. But, according to the chancellor at Berkeley, this hurts their competitiveness by about $15,000 per faculty member. This environment — dwindling academic staffing and therefore capability and reputation, resource constraints, pay cuts — will encourage the best faculty, especially the best young faculty, to leave the state.

None of this would be fatal if it were just a response to a cyclical downturn. Universities, including the University of Texas, go through tough patches on a regular basis. They tighten their belts and then recover as the cycle improves. But California’s financial crisis isn’t cyclical. It’s structural — the connection between California’s politics and California’s economy is broken.

So where’s the opportunity for Texas?

Read more here.