Public universities plow ahead with construction despite tight budgets

Crissy Pascual/California WatchAn addition to the Rady School of Management is one of the new buildings under construction at UC San Diego.

Construction cranes sprout from the campus of UC San Diego like towering palm trees in the Southern California sun.

Theres a new engineering building under construction, and a new addition to the school of management. A new office building is now open, along with a new parking garage, biomedical research and marine labs, cardiovascular center, $400 million student apartment and dining complex, and $55 million music center. New clinical research and biological and physical sciences buildings are scheduled to get under way next year.

In all, $2 billion worth of brand-new facilities are in the planning, design, or construction stages at UCSD. The broader University of California system has more than 200 building projects under way at its 10 campuses and five medical centers, together valued at $8.9 billion. The cement never dries on a UC campus, Carolan Buckmaster, a researcher active in the UCSD faculty union, observed wryly. In the California State University system, $161 million worth of new construction is going up.

All of these new buildings seem an odd contradiction in a state that has cut billions of dollars in operating money from its public universities, which have responded by reducing enrollment, dramatically increasing tuition and laying off employees. And since theres not enough money to operate them once theyre finished, theyre further stretching maintenance and energy budgets. At least one new campus building is sitting virtually empty and unused because the university cant afford to run it.

University officials say all this construction was already in the pipeline before the 2008 economic downturn squeezed state spending for higher education. Some is being paid for by part of a $10.4 billion bond issue voters approved in 2006, for instance, from which more than $3 billion went to public higher education. Some is being underwritten by private donations, government research grants and student fees. About $1 billion came from bonds issued in 2009 under the federal stimulus program which the universities will have to repay and $325 million in bonds the UC system issued that year on its own. Individual campuses also issue their own bonds, and community colleges often get construction money from local bond issues.

More importantly, these officials say, the money for construction is kept in strictly separate capital, not operating, accounts. It cant be used for expenses such as increasing salaries or enrollment.

But David Kline, spokesman for the California Taxpayers Association, said that, by insisting on continuing to build in spite of the financial downturn, the universities are missing the point. The cost of construction is ultimately bankrolled by taxpayers, Kline said. Thats because Californias public universities and colleges are now paying a staggering $1.1 billion a year in interest on those construction bonds, more than double the amount of 10 years ago, the Legislative Analysts Office reported in August.

People discuss bond money as if its free money that isnt coming out of the taxpayers pockets, and thats exactly where it is coming from, Kline said.

The universities also have to clean, heat, light, cool and maintain these new buildings, the burden of which comes out of hard-pressed operating budgets that were cut by $1.4 billion this year, including $650 million at UC.

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Public universities plow ahead with construction despite tight budgets