January 27-28, 2002 Statewide Academic Senate E-mail Discussion
about Where Salary Dollars Really Go



From: Vince Buck Date: Sat Jan 26, 2002 10:12:16 PM US/Pacific To: ascsu@calstate.edu Subject: Questions about Richard West's budget presentation Budget discussions make my eyes glaze over. I believe that the figures provided are used more often to conceal rather than reveal, somewhat like an Enron financial statement. Nevertheless I tried to listen carefully to Vice Chancellor West's comments and his reply to Barry Pasternack's question on Thursday. As result I have the following comments and questions. Perhaps someone can help me out. 1. VC West acknowledged that there are salary savings due to retirements. These savings remain at the campus level, for reasons that were not discussed nor made clear. 2. VC West suggested that these savings were one time savings. Yet it seems to me that if I retire at $80,000 and someone else is hired at $50,000 then there remains some savings until that person starts making $80,000 (not even considering inflation). And since not all retirees are replaced with full time hires and even when we try to do that about 1/3 of our searches are unsuccessful, it seems that there might be substantial savings. 3. VC West stated that any salary savings they should not be used to provide salary increases, since in the future the legislature or governor or Leg Analysts office (the Powers That Be in Sacramento or PTBS) will discover these increases and decide that we do not need as much money in the future. This raises several questions: 1.) would we be worse off in the long run even if they did that; 2.) we have such a huge salary gap with CPEC figures, even if we used salary savings to supplement the 2% allotted to us, we would still behind, and would still need additional funding in the future; and shouldn't the PTBS commend us on trying to do all that we can to close this gap; 3.) wouldn't they be more likely to cut back on salary funding if they see that we are using salary funds for other purposes; 4.) is the faculty being made to suffer now for some presumed strategic advantage in the future; 5.) is this fear of PTBS retribution a red herring to distract from the actual uses of these funds? 4. If, as Dave Hood suggested, salary savings can be used for other purposes, can other funds be used to improve the salary situation? Didn't the UC do this several years ago? Did the UC suffer any retribution from the PTBS? 5. I do not understand exactly how salary increase funds come to the CSU. However the Chancellor has said, for instance, that the faculty got a 6% pay increase two years ago. I do not personally know anyone who got a 6% pay increase. I received an above average FMI and still received only a bit above 5%. CO representatives in an FAC meeting last year acknowledged that faculty did not get a 6% pay increase. And yet all of the salary funds were not spent. (As I understand it not all of the 6% was spent on salary increases and at the same time there were savings in the base because of retirements, and yet the faculty did not get a real 6% increase. Am I wrong?). And VC West says that these funds should not be spend on salary increases because somehow it will hurt us in the future, either because they are one-time savings or because of retribution. Is this a fair assessment? 6. Is Bill Meyer correct when he interprets VC West's comments to say: faculty salary savings can be used for anything except salary increases? I am genuinely puzzled, but am left with the feeling that we all are being treated unfairly by the CO and the BOT. I would appreciate anyone helping me out with my facts and interpretation. Vince Buck Professor of Political Science California State University, Fullerton Fullerton CA 92834 Phone: (714 278 2608) FAX: (714 278 1260)
From: "Jacquelyn Kegley" Date: Sun Jan 27, 2002 09:57:05 AM US/Pacific To: vbuck@fullerton.edu Cc: ascsu@calstate.edu Subject: Re: Questions about Richard West's budget presentation jkegley@csub.edu writes: I think I have answers to a few of these questions, but I will pursue personally and agressively with Richard and others at CO the answers to each of these. Thanks Vince for always keeping us on the alert and thanks aoo all senators who asked good questions. We will keep pursuing answers (good or not). I have indicated a brief answer to one question below. Jackie Jacquelyn Ann K. Kegley, Chair Academic Senate, California State University Professor of Philosophy California State University, Bakersfield 9001 Stockdale Highway Bakersfield, California 93311-1099 661-664-2249 jkegley@csub.edu vbuck@fullerton.edu writes: > Budget discussions make my eyes glaze over. I believe that the figures > provided are used more often to conceal rather than reveal, somewhat like > an Enron financial statement. Nevertheless I tried to listen carefully to > Vice Chancellor West's comments and his reply to Barry Pasternack's > question on Thursday. As result I have the following comments and > questions. Perhaps someone can help me out. > > 1. VC West acknowledged that there are salary savings due to retirements. > These savings remain at the campus level, for reasons that were not > discussed nor made clear. I believe that long time practice is that most of the money allocated to the CSU is redistributed to campuses and campuses get the salary money and thus presumably the salary savings at retirement and the costs for hiring. Long term practice presumably is based on a rationale. ...
From: "David O. McNeil" Date: Sun Jan 27, 2002 10:28:14 AM US/Pacific To: Vince Buck Cc: ascsu@calstate.edu Subject: Re: Questions about Richard West's budget presentation Vince, I stopped paying really close attention to these budget reports, partly because I get so many of them and find them pretty unenlightening. After all these years I of course have a lot of ideas about them, which I'm happy to share below (IN CAPS). David _.. . David McNeil, Professor and Chair San Jose State University, Department of History Tel.(408) 924-5545 FAX (408) 924-5531 dmcneil@email.sjsu.edu ._ _ _.... ._ _. .... _ _ _ On Sat, 26 Jan 2002, Vince Buck wrote: > Budget discussions make my eyes glaze over. I believe that the figures > provided are used more often to conceal rather than reveal, somewhat like > an Enron financial statement. Nevertheless I tried to listen carefully to > Vice Chancellor West's comments and his reply to Barry Pasternack's > question on Thursday. As result I have the following comments and > questions. Perhaps someone can help me out. WHAT IS ALWAYS CONCEALED IN THESE REPORTS -- ALTHOUGH THEORETICALLY AVAILABLE FOR A PERSISTENT RESEARCHER -- IS THE "ACTUAL" BUDGET. WHAT WE HEAR ABOUT ARE PROPOSED CHANGES FROM TOTAL BUDGETS WHICH WE NEVER FULLY UNDERSTAND. IN ANY EVENT, WE DON'T GET REPORTS ABOUT HOW THE TOTALS ARE ACTUALLY SPENT, WHICH I THINK UNDERLIES SOME OF YOUR QUESTIONS BELOW. > 1. VC West acknowledged that there are salary savings due to retirements. > These savings remain at the campus level, for reasons that were not > discussed nor made clear. MY GUESS IS THAT ALL COMPENSATION LINES -- WHETHER PAID TO EMPLOYEES OR NOT -- ARE FUNDS THAT ARE SPENT AT THE CAMPUS (UNLESS THERE IS SOME "PAYBACK" ORDERED, PERHAPS BECAUSE OF AN ENROLLMENT DROP OR FISCAL CRISIS). THE PRESIDENTS, NOT RICHARD WEST, SHOULD BE ACCOUNTABLE. THERE SHOULD BE MORE QUESTIONS AND ACCOUNTABILITY ON CAMPUSES. > 2. VC West suggested that these savings were one time savings. Yet it seems > to me that if I retire at $80,000 and someone else is hired at $50,000 then > there remains some savings until that person starts making $80,000 (not > even considering inflation). And since not all retirees are replaced with > full time hires and even when we try to do that about 1/3 of our searches > are unsuccessful, it seems that there might be substantial savings. IF YOU RETIRE, YOUR COMPENSATION LINE REMAINS IN THE BASE BUDGET FOR ONLY THE FOLLOWING YEAR, SO THERE'S ONLY ONE YEAR OF SAVINGS. (?) (IF THIS IS NO LONGER THE CASE, WE NEED TO FIND OUT AND THEN SYSTEMATICALLY AND REGULARLY "FOLLOW THE MONEY!") I SUPPOSE THAT IF YOU ARE REPLACED BY SOMEONE WHO IS CHEAPER THAN THE "REPLACEMENT," THERE MAY BE ADDITIONAL SAVINGS. IT WOULD BE USEFUL FOR THIS TO BE SPELLED OUT FOR US MORE CAREFULLY, ASSUMING OF COURSE THAT WE HAVE A TRUSTWORTHY SOURCE OF INFORMATION. I DOUBT THAT THIS WILL BE DONE, HOWEVER, FOR SALARY SAVINGS ISSUES ARE A CENTRAL BONE OF CONTENTION IN COLLECTIVE BARGAINING, AND OUR EMPLOYER UNDERSTANDS THAT INFORMATION IS POWER. > 3. VC West stated that any salary savings they should not be used to > provide salary increases, since in the future the legislature or governor > or Leg Analysts office (the Powers That Be in Sacramento or PTBS) will > discover these increases and decide that we do not need as much money in > the future. This raises several questions: 1.) would we be worse off in the > long run even if they did that; 2.) we have such a huge salary gap with > CPEC figures, even if we used salary savings to supplement the 2% allotted > to us, we would still behind, and would still need additional funding in > the future; and shouldn't the PTBS commend us on trying to do all that we > can to close this gap; 3.) wouldn't they be more likely to cut back on > salary funding if they see that we are using salary funds for other > purposes; 4.) is the faculty being made to suffer now for some presumed > strategic advantage in the future; 5.) is this fear of PTBS retribution a > red herring to distract from the actual uses of these funds? I THINK YOU ANSWERED YOUR OWN QUESTION ABOUT FEARS OF SACRAMENTO'S REACTION. I DO RECALL THE CHANCELLOR NOTING THAT HE "DID THIS ONE TIME" AND WAS "TOLD DON'T EVER DO IT AGAIN," FOR WHAT THAT'S WORTH. I BELIEVE THE FACT REMAINS THAT OTHER FUNDS "MIGHT" BE USED FOR COMPENSATION. CFA THINKS THEY SHOULD BE, AND I'M INCLINED TO AGREE. > 4. If, as Dave Hood suggested, salary savings can be used for other > purposes, can other funds be used to improve the salary situation? Didn't > the UC do this several years ago? Did the UC suffer any retribution from > the PTBS? SEE ABOVE (BUT I DON'T KNOW ABOUT UC. THEY HAVE OTHER PROBLEMS IN ANY CASE). > 5. I do not understand exactly how salary increase funds come to the CSU. > However the Chancellor has said, for instance, that the faculty got a 6% > pay increase two years ago. I do not personally know anyone who got a 6% > pay increase. I received an above average FMI and still received only a bit > above 5%. CO representatives in an FAC meeting last year acknowledged that > faculty did not get a 6% pay increase. And yet all of the salary funds were > not spent. (As I understand it not all of the 6% was spent on salary > increases and at the same time there were savings in the base because of > retirements, and yet the faculty did not get a real 6% increase. Am I > wrong?). And VC West says that these funds should not be spend on salary > increases because somehow it will hurt us in the future, either because > they are one-time savings or because of retribution. Is this a fair > assessment? ACTUALLY, WHEN "THE FACULTY" GET A "PERCENTAGE" INCREASE, IT ACTUALLY COMES AS DOLLARS, WHICH ARE DIVIDED UP FOR VARIOUS THINGS, SOME OF WHICH ARE MANDATORY COST INCREASES (E.G. BENEFITS), SSIs (WHEN THEY'RE NEGOTIATED, IMPOSED, OR OTHERWISE PROVIDED FOR BY COLLECTIVE BARGAINING), COLAs (DITTO), "MERIT" PAY (DITTO). AND SO ON. IT IS POSSIBLE (I DON'T KNOW) THAT SOME FACULTY GOT 6% OR MORE IF THEY GOT SSI + COLA + "MERIT") THAT YEAR. > 6. Is Bill Meyer correct when he interprets VC West's comments to say: > faculty salary savings can be used for anything except salary increases? A FAIRER WAY TO PUT THIS IS THAT "SALARY SAVINGS" (AND FOR ALL WE KNOW, ACTUAL COMPENSATION) SEEMS TO BE SPENT MORE OR LESS APPROPRIATELY ON THIS OR THAT CAMPUS ACCORDING TO HOW CAREFULLY THIS IS MONITORED AND REPORTED. ETERNAL VIGILANCE IS CALLED FOR! > I am genuinely puzzled, but am left with the feeling that we all are being > treated unfairly by the CO and the BOT. I would appreciate anyone helping > me out with my facts and interpretation. I SHARE YOUR PUZZLEMENT AND DISAPPOINTED FEELING. I HOPE OTHERS CAN ENLIGHTEN US. THANK YOU FOR YOUR QUESTIONS, VINCE. DAVID MCNEIL > Vince Buck > Professor of Political Science > California State University, Fullerton > Fullerton CA 92834 > Phone: (714 278 2608) > FAX: (714 278 1260)
From: "Robert W. Cherny" Date: Sun Jan 27, 2002 11:36:29 AM US/Pacific To: ascsu@calstate.edu Subject: Re: Questions about Richard West's budget presentation I share Vince's puzzlement about these things. Most of us can remember when step increases were NOT taken out of cost-of-living increases. During my first 15 years in the CSU, I always got 5% every year plus whatever the COLA was for that year. When did the rules change? I remember it coming sometime in the early 1990s, about the same time that steps were reduced in size and increased in number. AND when I asked my question about requesting funds to close the CPEC salary gap, I actually had the data on my screen, straight from the CPEC website, which you can find at: http://www.cpec.ca.gov/HigherEdUpdates/Update2001/UP01-03.pdf Richard said that they had often asked for funds to come within a few tenths of a percentage point of the salary gap. Here's the CPEC data: Year CPEC Parity Figure Requested/Appropriated Amount Received 1998-9 11.2 6.0/6.0 5.7 1999-00 11.1 6.0/6.0 6.0 2000-1 8.9 6.0/6.0 5.9 2001-2 7.9 6.0/2.0 ??? NEVER did the CSU's request come within a few tenths of a percentage point of the parity figure, although I recall some statistical prestidigitation by the chancellor on one occasion to make it appear that they were doing so. (He once claimed that the CPEC parity figure was a projection, and that they were seeking only the part of the projection to bring salaries to parity with the previous year, or some such argument.) But the CPEC data is quite clear. Bob =================================================================== Robert W. Cherny Professor of History San Francisco State University San Francisco, CA 94132-4155 Campus FAX: (415) 338-7539 Campus phone: (415) 338-7561 http://bss.sfsu.edu/cherny/ Campus office: Old Science 220 ===================================================================
From: "David O. McNeil" Date: Sun Jan 27, 2002 12:06:12 PM US/Pacific To: "Robert W. Cherny" Cc: ascsu@calstate.edu Subject: Re: Questions about Richard West's budget presentation Good points, Bob! I think the rest of the Senate would be interested to read the minutes of the November 14, 2001 Trustees' Committee on Educational Policy (pp. 4-5 of the Committee report, published in the agenda for next week's BoT meeting), which summarizes some of the positive response of the Trustees to the report on the CSU at the Beginning of the 21st Century. Trustee Icaza (then) asked for a comment about lagging faculty salaries, and you did say more about the CPEC gap. The minutes do NOT reflect your comment (as I recall it) that the Administration never asked for enough to close the gap; the minutes DO have Trustee Hauck's comment that "all that could be allocated for faculty salaries has been allocated;" the minutes do NOT mention your response that (as I recall it) "if you don't ask for it, you'll never get it" (nor do they mention the applause that your response received)! David _.. . David McNeil, Professor and Chair San Jose State University, Department of History Tel.(408) 924-5545 FAX (408) 924-5531 dmcneil@email.sjsu.edu ._ _ _.... ._ _. .... _ _ _
From: "Jacquelyn Kegley" Date: Sun Jan 27, 2002 01:05:32 PM US/Pacific To: dmcneil@email.sjsu.edu Cc: vbuck@fullerton.edu, ascsu@calstate.edu Subject: Re(2): Questions about Richard West's budget presentation jkegley@csub.edu writes: David Your answers fit with my perceptions. However, I will still pursue answers. Jackie
From: "Pasternack, Barry" Date: Sun Jan 27, 2002 05:31:37 PM US/Pacific To: "David O. McNeil" , Vince Buck Cc: ascsu@calstate.edu Subject: RE: Questions about Richard West's budget presentation Colleagues, I was lead to believe that there was no adjustment for total faculty compensation when someone retires. Perhaps I misunderstood, but if this is the case, I too do not understand why this is one-time money. The issue of the CO sending the money to the campuses is to me a spurious one. If the CO can send our salary savings to the campuses it can certainly get it back. Quite frankly, I do not want my compensation dollars used to fund increased enrollment and I think most faculty would agree with me. The reason for my question to VC West was to put it on the record that the salary savings are there. The fact that the Chancellor refuses to use these to pay SSI's is, to my mind, extremely short-sighted and ill-advised. Barry
From: "Jacquelyn Kegley" Date: Mon Jan 28, 2002 12:01:11 PM US/Pacific To: mlklein@csupomona.edu Cc: bpasternack@exchange.fullerton.edu, vbuck@fullerton.edu, dmcneil@email.sjsu.edu, cherny@sfsu.edu, ascsu@calstate.edu Subject: Re: Salary Savings and West's comments. jkegley@csub.edu writes: I had a long talk with David Spence this morning about the salary savings discussion. I informed him of all our concerns. He said that the CO staff have discussed this and that he would bring our issues to that group. I requested much more clarification and further discussion of the issues. I think this may happen. Anyway, I wanted you to know that I am following up on the issues. Jackie
From: "Cates, Marshall" Date: Mon Jan 28, 2002 12:14:30 PM US/Pacific To: "'Pasternack, Barry'" , "David O. McNeil" , Vince Buck Cc: ascsu@calstate.edu Subject: RE: Questions about Richard West's budget presentation To be fair there may not be long term savings from retirement, even without the one year limitation on the line item. If an $80K professor is replaced by a $40K assistant professor there seems to be a $40K savings, but you must subtract that used to promote the associate professor to full, the assistant to associate etc. If you start with 60% full and 30% assoc and 10% assistant and end up with the same percentages, there is no overall salary savings. We are not getting younger. If anything the ranks of full keep getting to be a bigger share of the faculty and hence the budget. If we accomplish a hoped for rapid increase in hiring we might reverse this trend, then there would be savings, but that should be used up in an increase in the total size of the faculty.
From: Henry Reichman Date: Mon Jan 28, 2002 12:39:19 PM US/Pacific To: Vince Buck , ascsu@calstate.edu Subject: Re: Questions about Richard West's budget presentation Vince's questions are well taken, but the issue is actually clearer than both his and West's presentations suggest. The fact of the matter, put simply, is this: not only SSIs but also FMIs cost the university absolutely nothing in new funding. Indeed, overall at present the university actually makes a considerable amount from any salary increases that are fundamentally about faculty moving up a "salary ladder." Here's why: Imagine, for a moment, a salary ladder system in which there was no need to take account of inflation and hence no GSIs and in which the number of faculty participating remained the same over time. Let us say, for argument, that in this system the top salary is $100,000 and the lowest salary is $50,000. And let's assume that faculty are spread evenly throughout the ladder. In this system, every time a faculty member retires from the top step a new faculty member is hired at the bottom step. In this "transaaction" $50,000 reverts to the system to fund the progress up the ladder of those in the middle. Now, of course, in reality faculty are never spread evenly along the ladder. At some moments there will be more faculty near the bottom of the ladder than at the top, necessitating the injection of some new money to fund their progress up the ladder. But at other times there will be more faculty at the top than at the bottom, creating a surplus. Over time this will equal out. Therefore, in the long run, the ladder system is cost-neutral unless the ladder as a whole is adjusted upward (GSIs) or the number of faculty in the system is increased (new funding for enrollment). Now, there is little doubt that at present we are in a situation where far more faculty are at the top of the ladder than at the bottom. (If anyone doubts this, check the report from CPEC to which Bob Cherny referred us.) Moreover, only those in approximately the bottom half of the latter (junior faculty) are even eligible for regular ladder steps (SSIs); other faculty move up the ladder only through FMIs. In short, we have far more people dropping off the ladder at the top than is necessary to fully fund those moving up, so we are in a situation of surplus. In other words, SSIs (and FMIs) don't cost the system new funds; indeed, the system gains funds. These can be used to supplement other things, including either the general salary increase (moving the whole ladder upward) or to higher more faculty (supplementing new enrollment money), or both (or, alas, some other noninstructional garbage that our administrators can't live without). At our meeting last week you may recall that I gave West the example of the department that I chair at Hayward (History). Here are some of the relevant figures: Our total faculty salary budget for 2000-01 was $907,591. In 1997-98, it was $926,043. (This is mainly a result of decreases, owing to unreplaced retirements, in the tenure-track component; in effect these retirements were replaced by part-time lecturers.) But, according to Chancellor Reed, from 1997-98 to 2000-01 CSU faculty received a 23.6% increase in salary. Adjusting for that increase by adding 23.6% to the 1997-98 budget, thereby making it properly comparable to the 2000-01 budget, we get a 97-98 total in 00-01 salary dollars of $1,144,589. In other words, Hayward History's salary savings in real terms from 97-98 to 00-01 were $236,998. By the way our FTES remained essentially the same over this period; indeed, the number of sections we offered rose slightly. Experience, of course, varies by department and campus, but does anyone doubt that my department's experience is more typical than not? Finally, a quick point on Bob Cherny's contribution to this interesting discussion: Bob cites the CPEC report to indicate that from 99-00 to 00-01 we were appropriated a 6.0% increase and received a 5.9% increase. BUT, the same CPEC report gives an average annual CSU faculty salary for 2000-01, "weighted by state university staffing," of $69,067. The previous year's report gave a figure of $66,281 for 1999-00. This yields an actual increase in the average salary of $2786, or 4.2%, not 5.9%. According to CFA researchers, if one uses this measure over the period covered by Bob's e-mail we received NOT the 23.6% the Chancellor contends, nor the 21.6% CPEC reports but -- again, according to CPEC's own average salary figure -- an increase of just 16.4%. The reason for this, I think, is clear: The only portion of the salary increases that was actually a genuine salary increase (an upward shift of the ladder) was the GSI. The SSIs and FMIs were, in this sense, neutral and did not involve new money entering into the salary system. NOW, WHERE THIS MONEY WENT ... THAT'S ANOTHER QUESTION! Hank Reichman