BF2S Forums California Students Complain About 'Tax Hikes'

You don't often hear complaints about large and unfair tax hikes issuing from the ramparts of America's most progressive public university system.

Nevertheless, many faculty, students and staff on the 10 campuses of the University of California system are ticked off at how the state is handling its budget crisis. Last week, their anger over the resulting layoffs and tuition increases helped turn a dance party at Berkeley into a riot. The question now is whether on Thursday we will see more of the same at the protests, marches and teach-ins planned for what is being billed as a "Day of Action to Defend Public Education."

Angry protests involving the UC community are nothing new. What's interesting is the way some are characterizing their grievances. In an article for the Huffington Post earlier this month, Bob Samuels—a UCLA lecturer who also serves as a president for a faculty union—explained that "students have understood that the recent increases of student fees (tuition) by over 41% in one year is the same as a tax hike."

Mr. Samuels is right: Some of these students do understand it that way. "Let's call this what this really is," Berkeley sophomore Robbie Bruens told his former high school newspaper. "A big fat Schwarzenegger tax hike on middle class students and their families."

It's hard to blame them when you don't hear much better from people who ought to know better. A year ago, John Garamendi—then California's lieutenant governor and a University of California Regent—issued a press release declaring that a proposal for higher tuition fees was "nothing more than a $662 a year tax increase on every student at the University of California."

At an October Democratic rally at UC Davis, he was quoted as calling the tuition increases "the single biggest tax increase" in the last California budget. The next month he was elected to Congress.

Now, when professors and politicians cannot distinguish between a reduction in a state subsidy and an increase in taxes, we better understand the dismal shape of university and state finances. On further reflection, however, it seems we might have here what our president likes to call "a teachable moment." That is to say, we may have an opportunity to cultivate within the university community some modicum of economic reality—and perhaps even some solidarity with the small California businesses worried about what a new health-care mandate from Washington or a new tax from Sacramento might mean for the survival of their enterprises.

Plainly the president of the UC system, Mark Yudof, understands at least half the equation. In an interview that appeared in the New Yorker in January, he gave his take on the tuition protests that have plagued him in recent months. "You can protest. You can put up signs—at Berkeley they like to occupy trees and run nude—but the answer is I still don't have any money." (Italics in the original.)

That part Mr. Yudof got right. Unfortunately, Mr. Yudof's larger response is to suggest the students and faculty stand with him and together put the blame on the state legislature. News flash for Mr. Yudof: Sacramento doesn't have the money either! The state is facing a $20 billion budget gap.

If they are wondering why, Mr. Yudof and the protestors now hounding him might each profit from a review of the recent findings of the bipartisan California tax commission. The governor set up the commission precisely because the boom-and-bust cycle for state tax revenue is making it increasingly difficult for the state to fund government commitments, including higher ed. The gist of the problem was aptly summed up in its report: "Tax rates have been increased on steadily narrowing tax bases."

Tax bases narrow as marginal rates go up and people and businesses struggle to make a go of it. Some fail; others move to Texas. Either way, the result is what California has been seeing: higher unemployment, slower economic growth, and less tax revenue to fund the state's public institutions.

When things get as bad as they have in California, students whose education is underwritten by this tax revenue find themselves paying higher tuition—and faculty and staff may find themselves out of a job.

To put it another way, it seems to be the case that a progressive public university system with the wherewithal to provide nurture and sustenance to its activist students and professors requires something for which they have thus far had little sympathy: a thriving petit-bourgeois to help pay for it.

So here's some advice for Thursday's protestors. Keep your clothes on. Don't fight the police. And maybe put down your Saul Alinsky long enough to read the California tax commission's findings about what dependence on high marginal income tax rates is doing to public universities like yours.