California State University Executive Pay Hikes–Illegal Gift of Public Funds–Another Reason AB 1413 Needs to be Signed by the Governor4 min read

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Two weeks ago, the CSU Board of Trustees approved 12% raises for executives while students have had their fees hiked by 10% again this year. The Board also indicated that they plan an addition 40% in pay increases over the next four years as student services are being cut and class sizes are ballooning. The fact that the Board chose to hike executive pay at a time when the CSU is suffering from budget cuts shows how completely out of touch they are with the needs of students and faculty in the classroom. Shockingly, not only did they approve 12% raises in mid-September, but they took the extra step of making the raises retroactive to July 1 – just for the heck of it.

This week, a lawsuit was filed by two former CSU San Bernardino graduates – a lawsuit that CFA stands behind 100% — which alleges the $125,000-$175,000 in retroactive pay is an illegal use of public funds and asks the Court to return those funds to the California State Treasury. The citizens of California do not pay taxes to have them cavalierly given away by the State; the funds are for authorized purposes only.

The plan to raise executive pay by 40% over the next four years and the move to make it retroactive so that executives already earning over a quarter of a million dollars a year is just another example of a CSU Administration that is running the CSU more like Enron than a public institution. Plain and simple – the CSU Administration doesn’t make decisions based on what is best for students and faculty, they make decisions that benefit themselves financially.

Anyone who has picked up a newspaper over the past several years is likely to be well versed in the laundry list of executive abuses and scandals that have plagued the CSU system. The Administration handed out millions of dollars in six-figure deals for “no show” consulting gigs and for departing executives (transition pay). One campus president took a job in Paris while another system executive went to a new position in Atlanta. Between them they pocketed over $330,000.

Earlier this year, Assemblyman Anthony Portantino introduced an education reform bill – AB 1413 – to clean up the system and restore the public’s trust. One would think that after the embarrassment the CSU Administration has suffered over the last year, they would embrace such a bill. Wrong. The CSU Administration responded by doing what they know how to do best: waste money that could be better spent elsewhere.

The CSU Chancellor and Board of Trustees decided to spend hundreds of thousands of taxpayer dollars to hire a lobbying firm to fight AB 1413 — legislation designed to protect taxpayers! AB 1413 would clean up the system by ensuring greater communication with elected representatives and establish common sense guidelines to limit executive pay and perks. The CSU Administration is adamantly opposed to a bill that would stop the waste, fraud, and abuse that they are so used to getting away with.

For those of us who are part of the CSU community, the numerous published reports outlining rampant waste, fraud and abuse of taxpayer dollars by the CSU Administration have become embarrassing and all too common. As early as 2001 the poor judgment and lack of oversight and communication with the legislature became public with the legislative investigation into the $600 million PeopleSoft computer system boondoggle.

Then in 2005, as the CSU continued to reel under the impact of a half billion dollar cut to its budget, as student fees soared, and as contract negotiations with faculty languished, the Board of Trustees treated their 28 top executives to a shocking increase of 19% to their pay and perks. These perks include a $1000 a month car allowance and either a free home or $60,000-a-year housing allowance.

It appears that no amount of public exposure and shame will bring about changes in the way the CSU administration and Board of Trustees set their priorities. Just last month at their very first meeting of the academic year—instead of focusing on ways ensure that our students have the courses they need to graduate–they did it again. The Board of Trustee gave the system’s 28 top executives raises ranging from $28,000 to$45,000. The system now has the dubious honor of having a Chancellor who earns more than the President of the United States–$421,500.

Clearly, left to their own devises the CSU administration and Board of Trustees will continue to make this type of activity business as usual. If we are ever to restore public confidence and pride in the system that has educated millions of California’s working people we must demand meaningful reform.

The opportunity for reform sits on the governor’s desk right now–AB1413. This bill will ensure greater accountability, oversight and communication among the governor, legislature and CSU governing board, and establish reasonable guidelines for future executive compensation increases. The bill would also prohibit payouts to executives for work never performed or teaching responsibilities never fulfilled.

Sadly, that is why the CSU administration is so afraid.

Lillian Taiz is a professor of history at California State University, Los Angeles. She also serves as President of the California Faculty Association.

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