PROVOST’S REPORT



PROVOST’S REPORT

November 2, 2006

There are several things that I want to cover in this report, based on system meetings that I have attended recently:

First, Cornerstones. The Board of Trustees is undertaking, with CSU-wide governance, an effort to update Cornerstone so that it focuses even more precisely on what capacity the campuses and system have to meet the challenges of access to its universities, quality programs at its universities, and accountability to the public about our efforts on both counts. The Board understands the symbiosis of access and quality, diversity and mutual enrichment, the life of the mind in the university and the practices of the hand the heart both inside and outside its palisades. In spring, trustees likely will come to CSUN to hear how our sense of mission and our process of planning situate us in this CSU-wide context. Absent a functional master plan for higher education in CA, this system-wide dialogue is necessary to plot a collective future that planners are too fractious to accomplish. We will need to harvest thoughts from planning, themes from the incipient WASC process, and results from assessment, and then use them as stimuli for a campus-wide set of dialogues to occur when the trustees visit—we do not have a date.

Second, the Contract offer. After sitting through a day of explanation, I realized how little many of us actually know about the CSU offer. I asked system representatives to contribute to an explanation of its components, for instance: how it compares with previous CSU offers; how it actually stacks up against the CPEC gap and comparisons with other peers; what happens when you actually look at the effects of the proposed GSIs, SSIs, and incentives; why are there contingencies; and what are the implications of these contingencies. For example, are many of us aware that the CSU offer on the table exceeds the Compact and thereby commits each campus to make up the difference, even before one takes into consideration the additional 1% requested of the governor? We will make this explanation available soon, I hope.

Third, we circulated to the academic technology committees and the executive committee—which, I think, in turn, forwarded the document to the whole senate—a draft plan for ADA roll-out in Academic Affairs. The system shortly will have a conference on this. But the executive committee argued powerfully that we need to energize and call on campus trainers and users, rather than just rely on system to-down training. So, please pass your input on the draft to you senate president or to me, so I can re-submit to the appropriate committees.

It is my understanding that ERC will carry then pass the ball on alternative scheduling. Their report, which I first heard at senate exec a month ago, showed some surprising convergence between students’ wishes for single-day classes on Friday and Saturday with flex scheduling. The report will be delivered to provost council, as well to the senate shortly.

Unfortunately, I will be out of town for senate executive this week and, it seems, the next full senate. Since there is much in this that my proxies cannot delve into, do work with my office for an alternative forum, where I can be robed, if you so wish.

ADDENDUM TO PROVOST’S REPORT TO THE FACULTY SENATE

November 2, 2006

This is long. So here is the reader’s guide:

• Interested in the basics of the CSU offer—GSI, SSI, Incentive/Equity? Read 1-3, 7-9

• Interested in why the offer is contingent and what the sources of funding are? Read 3-5

• Interested in how the offer exceeds previous offers since ’86? Read 5-6

• Interested in how the offer exceeds the CPEC gap? Read 5-6

• Interested in the history of salary compression/inversion? Read 8-9

• Interested in the hidden argument behind the CPEC data? Read 9-11

Bargaining between the CSU and the CFA for a new contract has reached impasse. The current salary offer by CSU to CFA has sparked debate, in the meantime. Indeed, ten days ago the provosts understood, for the first time, that because the CSU’s offer exceeds what was in the Compact with the Governor, the campuses are on the hook for funding this difference.

Other discussions with faculty and administrators made me aware that the offer really is not understood well. The numbers and terms can be confusing. So, the following describes the salary offer in a context that I began to assemble at the provosts’ meeting last week. Since I am an administrator, this piece will reflect a CSU view. I have tried to make the data clear so that, if you disagree with the general view, we can at least agree on what facts and implications to dispute.

The Salary Offer

Table 1 below summarizes the components of the salary offer; it compares the two alternatives offered by the CSU. The salary offer is structured into four payouts—but within three years. This itself is confusing—four in three, a bargaining trinity. So, let’s ignore it. Let’s just stipulate, for most of this essay, that the offer covers four years.

Column B shows the percentage increases to be paid out in each installment, beginning with 2006/07 and ending with 2009/10. The payout includes a 4% increase to the total compensation pool during 2006/07, a 6.53% increase during 2007/08, a 6.84% increase during 2008/09, and a 7.5% increase during 2009/10. A 1% increase in system-wide faculty salaries represents about $13 million the first year and, of course, compounds in value thereafter.

Ok, now bear with me. Columns C and D show the two alternatives that CFA can choose between. But before you sally to the tally in the columns, note this. The salary offer has three components: General Salary Increase (GSI), Service Salary Increase (SSI), and Incentive/Equity. The total compensation pool remains the same, whichever option CFA chooses; but the allocations to GSIs, SSIs, and Incentive/Equity will vary. In a nutshell, CFA has the option of converting SSIs into GSIs. Alright, let’s list what I just garbled:

o The GSI (General Salary Increase) percentage is a general increase in salary – this goes to all faculty members as a percentage increase over their current salaries. There are two alternatives for GSIs, as offered by the CSU, as shown in Columns C and D. Should CFA accept the CSU salary offer, CFA may choose which alternative to implement.

The alternative shown in Column C provides for the maximum GSI—a total of 21.87 % over four payouts (a 4% increase in 2006/07, a 5.53% increase in 2007/08, a 5.84% increase in 2008/09, and a 6.5% increase in 2009/10). In this alternative, nearly 88% of the 24.87% (in the total compensation pool) would be allocated to GSIs.

Because there are four payouts, the amount for GSIs is compounded. For example, under the alternative with the maximum GSI (Column C), a faculty member currently earning an AY salary of $60,000 would be raised as follows:

Current salary (hypothetical) = $60,000

$60,000 x 1.04 = $62,400 in 2006/07

$62,400 x 1.0553 = $65,851 in 2007/08

$65,851 x 1.0584 = $69,697 in 2008/09

$69,697 x 1.065 = $74,227 in 2009/10

What does compounding do? $74,227 is 23.7% more than $60,000, not 21.87% more. Keep this difference in the back of your mind. I will invoke it later, but will not calculate for the following examples. One illustration is enough.

Under the alternative shown in Column D, the total amount added to the compensation pool for GSIs would be 17.87% (an increase of 3% in 2006/07, an increase of 4.53% in 2007/08, an increase of 4.84% in 2008/09, and an increase of 5.5% in 2009/10). This is because an increase of 1% per year added to the total compensation pool would be allocated to funding SSIs, as explained below. Thus, to use our example of a current AY salary of $60,000:

Current Salary (hypothetical) = $60,000

$60,000 x 1.03 = $61,800 in 2006/07

$61,800 x 1.0453 = $64,600 in 2007/08

$64,600 x 1.0484 = $67,727 in 2008/09

$67,727 x 1.055 = $71,452 in 2009/10

o The optional SSI (Service Salary Increase) portion shown in Column D would fund an increase in salary for those faculty members who have not reached the service salary maximums for their ranks. Now, here is where it gets confusing. The SSI amount offered by the CSU represents an increase to the total compensation pool of 1% per year, for a total of 4%. But each SSI - eligible faculty member could receive an additional increase of 2.65% each year. Huh, you say? Well, a 1% per year increase to the compensation pool is spent as 2.65% per eligible person because the people who are SSI-eligible are a smaller number than the GSI-eligible faculty. So, CFA can choose to apply the 1% increase per year to fund the 2.65% SSI increases (see Column D). Alternatively, the 1% increase per year can maximize GSIs as shown in Column C.

o The Incentive/Equity portion corrects market inequity and recognizes distinctive levels of achievement by individual faculty members. Now, the last sixteen months we have spent nearly $300,000 of CSUN’s Academic Affair’s budget on similar issues. That is, we subtracted five to six positions from the hiring pool to fund these efforts. This clause in the offer would support that local expense. The CSU salary offer provides a 3% increase to the total compensation pool for Incentive/Equity pay, allocated at 1% per year over the three years, 2007/08, 2008/09, and 2009/10. Unlike the SSI portion, the CSU does not offer an option to increase the GSIs by opting against the Incentive/Equity portion.

Now, let’s explain the uses a little more. In the current proposal, junior faculty will be eligible for raises that respond to market inequities as well as unusual achievements. Senior faculty and lecturers would be eligible, too; but their eligibility would be cyclical—every three to five years, depending on the final agreement. Since junior professors are, almost by nature, on the market, a cyclical approach would not work. But both programs could combat compression and inversion. For example, the salaries of some faculty members would increase to bring them into line with the salaries of more recently hired faculty members in their departments, who received a much higher rate of pay upon appointment because of the bidding in the academic market. And senior faculty could see their salaries rise above an average that is encroached upon by the higher salaries that are granted to new hires at lower ranks.

Table 1: The Salary Offer as a Percentage (%) Increase to the Total Faculty-Unit Compensation Pool

|A |B |C |D |

| |Total Offer |Alternative with |Alternative with |

| |(%) |Most GSI % |Least GSI %* |

| Payout #1 (2006/07) |

|Subtotal |4.00% | | |

|SSI |  | 0 |1.00% * |

|GSI |  |4.00% |3.00% |

| Payout #2 (2007/08) |

|Subtotal |6.53% |  |  |

|SSI |  | 0 |1.00% * |

|Incentive/Equity |  | 1.00% |1.00% |

|GSI |  |5.53% |4.53% |

| Payout #3 (2008/09) |

|Subtotal |6.84% |  |  |

|SSI |  | 0 |1.00% * |

|Incentive/Equity |  | 1.00% |1.00% |

|GSI |  |5.84% |4.84% |

| Payout #4 (2009/10) |

|Subtotal |7.50% |  |  |

|SSI |  | 0 |1.00% * |

|Incentive/Equity |  | 1.00% |1.00% |

|GSI |  |6.50% |5.50% |

|TOTAL GSI under each | |21.87% |17.87% |

|Alternative | | | |

|TOTAL OFFER |24.87% |24.87% |24.87% |

Source of funding

The ability to fund the plan depends, in large part, on the CSU receiving from the state the amount that was pledged in the Compact with the Governor. As shown in Table 2, this pledge provides an increased budget for salaries of 3% in 2006/07, of 4% in 2007/08, of 4% in 2008/09, and of 5% in 2009/10, for a total of 16%. This amount must still be approved by the Governor and the Legislature in the State budget bill. Since the Compact is a pre-existing agreement, this would seem to be a result that we can rely on. Indeed, the offer assumes that the state will and must meet these conditions.

However, the offer does have one contingency It depends on legislative approval of an additional 1% per in each of the last three installments, to be requested by the CSU.

So, you might think, well, too bad. Each campus should just find the dollars. Ok, but consider this. The entire plan already depends on each campus making up the difference between the CSU base offer and the amount pledged under the Compact.

Look at Table 2. Focus only on the base offer—before the added 3% to be requested of the state. There is a 5.87% gap over four years between the amount of funding pledged under the Compact and the CSU’s base offer. This amount will come from the campus base budget. The campus budget is the source of funding for new hiring, salary increases associated with promotions, reassigned time and sabbatical leaves, and operating expenses. On our campus, the 5.87% represents approximately $4,200,000—about the amount Academic Affairs lost to the budget cuts in ’05-06, when we hired very few people.)

| |% Increase under CSU Base |% Increase under Compact |Gap |

| |Offer | | |

|Payout #1 | 4.00% | 3% | 1% |

|2006/07 | | | |

|Payout #2 | 5.53 | 4 | 1.53 |

|2007/08 | | | |

|Payout #3 | 5.84 | 4 | 1.84 |

|2008/09 | | | |

|Payout #4 | 6.50 | 5 | 1.50 |

|2009/10 | | | |

| TOTAL | 21.87% |16%  |5.87% |

Now let me talk pastrami for a minute. Someone will say, hell, the CSU will reach into its pocket to cover all this! Well, if it does so, it will find a way to reduce the overall allocations to the campus to gather the funds for this pool. I mention this for a reason: Without agreement by that state to fund the added 1% in each of three years above the Compact, two turkeys (uh, no pun intended) will come home to roost: this 5.87% as well as the additional 3% that the CSU would request. At CSUN, self-funding 8.87% in salary would be a gargantuan challenge. Thus, the offer depends on the state’s willingness to pony up the additional 1% in each of three years.

Some have argued that CSU, if it were serious about firming up such a contingency, would have sought additional funding, above the Compact, previously. But we cannot ignore that the last two governors, when each had discretionary funds, chose to reduce fees for students before giving more funds to the system. Why? Students outnumber CSU employees 10:1. Votes follow. But, possibly, just possibly, a united front can reverse this trend since the Governor and others will make a decision after, not right before, an election.

The offer stretches us.

Key Issue: Compare for Me the Money!

CFA has said that the CSU salary offer is too low. This is, however, the highest salary increase offered to the CSU faculty in two decades over an equal period of time—three to four years. The data that follow appear on the CPEC web in various ways.

Table 3 compares the current CSU salary offer with the CPEC (California Postsecondary Education Commission) salary gap (which the CFA and CSU both cite) and with previous salary increases in the CSU.

The percentage shown on the far left of Table 3 is the projected gap between CSU faculty salaries and average salaries of the CPEC-designated peers—18%. Actually, if one reads the CPEC methodology, you see that the projected gap presumes no increase in ’06-07 to CSU faculty salaries. Let’s not make too much of that point (a difference of 3 – 4% depending on the option selected by CFA – See Table 1); but wherever you see 18% below, briefly flicker you lids and flash on 14 or 15%.

The next percentage is the current CSU salary offer total—24.87%. This amount is greater than the current CPEC gap. Also, since it is to be paid over a period of four years, with each successive percentage increase applied to all previous increases, the compounded value is closer to 27%.

Table 3: Salary Comparisons

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The CPEC projected gap likely will widen by about 3.5% annually—a common average salary increase for faculty nationwide. This would bring the CPEC gap to 28.5% within the next three years if CSU salaries remain the same. This is more than the 24.87% offer. The current CSU salary offer would, within three years, bring CSU faculty salaries to an average that is within about 4% of the CPEC average.

Please read that again. And this time flicker. What do you see? With a settlement this year, the CPEC assumption about no salary increase this year would be wrong. Are you strobing on that 3-4%? It closes the gap. With one if—if the state pumps that added 1% per year into this effort! Finally, remember compounding? Well, the total offers in each column—as in the comparable CPEC column—are larger by several percent than these figures show.

Is the offer low ball?

The average CSU faculty salary increase since 1986 has been 3.96% per year. Yes, there were a few whopper years before that. But twenty years . . . that is a pattern. As shown in Table 3, in the second column from the right, this is an average four year increase of 13.96%, considerably below the 24.87% current CSU salary offer over a four year period. As shown in the far right column, the four highest increases since 1986 represent a total of 24.3%, also slightly below the 24.87% offer.

However, this approach understates the relative size of the CSU offer, in other ways that I have not detailed. Remember, the offer would be delivered over three years. These other CSU increases were over four years. And can we compare this new offer with increases to average salaries? Included in that latter figure are not just negotiated increases, but also promotions, equity, market matches, and new hires. In fact, go the Academic Salaries subsection of the CSU’s HR page. GSIs themselves have averaged below 3% annually since ’95-96.

The column labeled “Least GSI” shows that, even with SSIs and Incentive/Equity pay removed, the GSIs in the current offer exceed the average CSU increase since 1986 (17.87% versus 13.96%); the delta is even greater if you compare GSIs with GSIs, as I did in the last paragraph. If the CFA chooses the alternative under which SSI funding is exchanged for GSIs (see Table 1), the GSIs will be 21.87% (shown by the “Max GSI” column). This percentage, 21.87%, is almost 57% higher than the average four year period increase (13.96%) since 1986.

Other Things of Note

Other questions have arisen:

1. Why does the CSU salary offer include an alternative of using 4% of the total to provide four 2.65% step increases? Why not simply offer GSIs?

This alternative probably is strategic. If accepted, it would put money in the hands of faculty members who have not topped out the salary ranges for their ranks.

Probationary faculty members in the CSU could benefit the most from this alternative, provided that they were not at the SSI maximum for rank. They would benefit more than senior faculty members already at the top of their service salary range, and, in most cases, benefit more than part-time faculty members who must accumulate twenty-four weighted teaching units before becoming eligible for an SSI.

This is a trade-off. Implementing SSIs will exacerbate salary compression for those who have topped out the range for their rank. However, implementing SSIs will ameliorate the problem of inversion felt by more recently hired junior faculty members, for example those hired three to six years ago at a given salary, and whose salaries are now less than the salaries offered new hires based on current market rates.

2. Why include an incentive/equity program?

The incentive/equity portion can address a need that GSIs do not, namely salary inequity due to changing “market” and recognition of high achievement. The incentive/equity component will provide, over three years, a yearly increase of 1% of the total compensation pool. This is a yearly amount equal to the yearly amount for SSIs.

As I sketched before, whether applied to junior faculty in an annual process for market and equity adjustment or to senior faculty and lecturers in a cyclical process—say, every three to five years—the money could address at least four things: competitive offers, inversion of already hired faculty by higher salaries to new employees, compression on senior salaries by highly salaried new personnel, and distinctive achievements. General salary increase move everyone up by a common spent. Incentive/equity concentrates resources on particular problems.

3. Why does not the CSU fund SSIs and market equity adjustments entirely out of salary savings when people retire?

a. SSIs

Salary savings from retirements have, by necessity, been put to a wide range of uses. In the short term, funds are used to hire lecturers to cover classes no longer taught by retiring faculty members. In the longer term, much of the money saved from retirements has been used for these and other like purposes:

• to hire permanent new faculty members,

• to make up for the gap between the funds that the state allocates for new hires and the actual cost of those hires

• to fund faculty promotions,

• to fund market equity salary increases,

• to fund sabbaticals, reassigned time, and professional development especially for new hires.

• to deal with budget cuts. And the difference between the Compact and the CSU base offer, as I have explained, suggests that this reserve will be tapped to make this offer work.

Also campus budgets do not increase automatically to match the rate of inflation for utilities and fuel, risk management and insurance, library resources, technology, supplies, and other operating costs. So, here is the point. We already cannibalize ourselves to support ourselves. Good cannibals know, however, that you only can eat yourself once.

b. Market equity adjustments

A similar question arises on behalf of requests for market equity adjustments. The same answer applies—retired funds already are repurposed. However, the current CSU salary offer provides for an increase of 1% in each of three years (2007/08, 2008/09, and 2009/10) to the total compensation pool to fund incentive/equity increases. For CSUN, this yearly amount would represent more than two and a half times the $280,000 that was spent out of growth funds last year for market equity adjustments.

4. What about the problem of salary inversion/compression and that endless salary gap?

Some believe that salary inversion/compression is only a recent phenomenon. And because it is recent, it should be fixed entirely now. Please, bear with me here. I’d like to solve it, too. But below I try to show in the response to 5 that it has a history. History—to be righted—will take money for salaries gained through political work with policy-makers and, yes more to the point, with our own brothers and sisters in the academy. For, we are a house divided. No, don’t think CFA vs. CSU. Think your graduate alma mater vs. your place of work today.

Tables 4, 5, and 6 (where “N” means new hires) show that inversion/compression is actually not new in the CSU. At the very least, it can be traced back to the late 1990s. This is true across all tenure track ranks.

In other words, for quite some time, the CSU has hired new faculty members at salaries above the average salary for rank. The differences between new and established salaries are highest at the full professor rank. However, there have been few new hires at that rank.

It is true, though, that the tendency has accelerated. Salaries offered new hires have increased by approximately 3.5% annually since 1998, while the salaries within ranks have gone up since 1985 by an annualized average of about 3.3%. The CSU did not begin collecting system-wide data regarding new hires’ salaries until 1998. However, we can infer that, unless new hires’ salaries grew exponentially right before 1998, the likelihood is that they matched and exceeded the averages within ranks in prior years.

Both CSU salary offer alternatives address inversion/compression somewhat by providing GSIs for existing faculty members. The CSU salary offer alternative that includes SSIs would more rapidly address the problem of inversion/compression for those faculty members who have not reached the service salary maximums within their ranks.

Nonetheless there is an issue here that might be embedded in capitalism. No, I’m not joking. The market bids up salary faster than public institutions are funded to pay. Why? The market is driven by different dynamics (supply and demand) than the state (general fund, fees, and bonds). And, possibly, the state—in its economic unconscious—attributes a compounding but un-monetarized value to a position that someone holds; it is a kind of property that become more assured—more valuable— the longer one fills it.

Table 4: Salaries for New Hires versus Existing at Assistant Rank

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Table 5: Salaries for New Hires versus Existing at Associate Rank

[pic]

Table 6: Salaries for New Hires versus Existing at Full Professor Rank

[pic]

5. Comparison Institutions

Table 7 lists the CSU’s CPEC-designated peer schools. As mentioned earlier, an 18% gap is projected between the average faculty salaries in the CSU and the CPEC-designated peers.

Welcome to the house divided. Watch closely

When we compare the CSU with these institutions in the aggregate, we overlook a political and cultural artifact. The salary gap is based, in part, on how Americans—all of us—categorize institutions, hierarchically. There are doctoral institutions; then there are MA-granting institutions.

Look at the institutions listed in Table 7. Only two of these schools, Bucknell University and Reed College, are institutions “like” most of the CSU where the Masters Degree is the highest degree granted. The others are PhD-granting institutions. Thus, the 18% CPEC salary gap largely reveals differences between Masters-granting and PhD-granting institutions. Indeed, the gap between Masters- and PhD-granting institutions is wide—nearly 29% when one sums all ranks.

Table 7: CPEC “Peer” Institutions

|Northeast Region |North Central Region |

|Bucknell University |Cleveland State University |

|Rutgers, the State University |Illinois State University |

| of New Jersey, Newark |Loyola University, Chicago |

|State University of New York, Albany |Wayne State University |

|Tufts University |University of Wisconsin, Milwaukee |

|University of Connecticut | |

| | |

|Southern Region |Western Region |

|Georgia State University |Arizona State University |

|George Mason University |Reed College |

|North Carolina State University |University of Colorado, Denver |

|University of Maryland, Baltimore County |University of Nevada, Reno |

| |University of Southern California |

| |University of Texas, Arlington |

| | |

Now, compare CSU with Masters Degree-granting institutions, i.e., those where the Masters Degree is the highest degree granted. Table 8 shows the CSU to have higher average salaries across all ranks as of 2005. The gap has closed to a point of near equivalence in the last two years—I wager. But my point does not change According to national views, these are peers.

Table 8: Salary Comparison – The CSU and Masters Degree-Granting Peer Institutions

|2005 |Full Professor |Associate |Assistant |

|MA-granting Peers |~$76,000 |~$61,000 |~$51,000 |

|CSU |~$85,000 |~$67,000 |~$57,000 |

|% Difference |11% |9% |10% |

We know that the CSU in on the cutting edge in educating our citizens and contributing to the economic and social progress of the state. And, yes, this CPEC gap should be addressed. But to do so, we must recognize that the chasm is caused not just by CSU practice but by a national habit of mind—and a habit of (under-)funding. The efforts by the CSU and the CFA to close the gap are an important step forward. Until there is a significant culture change, we will not see permanent closure of the gap between PhD-granting and Masters Degree-Granting institutions. Where are the national organizations on this, AAUP, NASCLGU, AASCU, etc? I’ve read nothing by them on it.

The data show that the gap captures the difference between the haves—the R1s—and the have nots—the MA1s—nationally.

Now, look back at the current CSU offer. Perhaps you still see it as chicken feed. But perhaps you now see it differently, as an effort to do more than has been done in twenty years. And as a first step in mending that larger house.

Sooner or later, we all will need to close ranks. We will need to educate those in policy, in NSF, in government, and in our own universities about who profits from a higher education house so divided. The tragedy is that, as long as we are divided CFA vs. CSU in our own house, we cannot take this wider view. If we differ on facts or on contexts for the facts, then so be it.

But vituperation and castigation of those who hold different views—on either side—distract us from the case at hand; it reduces argument to character assassination, and obscures others’ intentions with malign fictions.

Excuse the length and the opinions.

-----------------------

*Note: Under the Column D alternative, a 1% increase to the total compensation pool would be used to fund a 2.65% salary increase to the base salaries of all faculty members eligible for SSIs. Eligible faculty members are those who have not reached the service salary maximum for their academic rank.

Average

4-year Increase

13.96%

4 Highest

Increases

24.3%

0

10

20

30%

CPEC Gap

18%

CSU Offer

24.87%

Max GSI

21.87%

Least GSI

17.87%

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