Governor signs landmark CSU Transparency Bill into law

After more than three years of tireless advocacy by CFA members, State Senator Leland Yee and many others, Senate Bill (SB) 8 was signed into law today by Gov. Jerry Brown.

SB 8 will bring greater transparency and accountability to the ways in which fees, revenues from campus businesses and private donations are managed and spent at the CSU, UC and California Community Colleges.

The bill places the institutions’ subsidiary organizations – known as “auxiliaries” – under the scope of the California Public Records Act (CPRA) without creating new state costs.

“Today, we have taken a big step towards transparency,” said CFA President Lillian Taiz, a professor of history at CSU Los Angeles.

Taiz continued, “Now it will be important that the public and the media use this law to ensure that the state’s scarce resources are used to fulfill the primary mission of the CSU which is to educate students in the classroom.”

The bill was signed despite years of resistance from the CSU Chancellor’s Office which, until just a few months ago, staunchly opposed the bill. They fought SB 8 at every possible turn, spending taxpayer dollars to fight a bill designed to protect taxpayer’s right to know how their money is spent.

The law allows the public to make information requests and requires the university to respond; it does not compel the CSU or UC to report information without a request.

The need for accountability and careful protection of university funds is greater than ever this year. Because of state funding cuts to public higher education, tens of thousands of eligible students are not being admitted to California’s public colleges and universities, and students who do attend find that thousands of class sections are being eliminated.

Further, while CSU management expands its non-publicly funded operation, an increasing percentage of the money students pay – for instance, students pay 100 percent of the financial burden when they take courses offered through “extension”– is landing in auxiliary accounts, not university accounts.

Prior to SB 8, the CSU, UC and community colleges have been subject to the Public Records Act, but almost all of their auxiliaries were not. This gap in the law allowed the public universities and colleges to keep from public view billions of dollars in student campus fees, commercial activity income and private donations.

This protection from public scrutiny encouraged colleges and universities to create an increasing number of auxiliaries to run campus operations such as food services, parking facilities, housing and bookstores – all of which would be subject to public oversight if the functions had been administered by the university or college and not an auxiliary. The 23 campuses and the Chancellor’s Office have a combined total of 93 auxiliaries listed on the CSU Chancellor’s web site.

By the California State University Chancellor’s Office’s own admission, 20% of this public university’s operating budget – or $1.34 billion – is held in the hidden accounts of its campus and system auxiliaries.

In recent years numerous media reports have revealed how these hidden monies can be inappropriately used for personal expenses, questionable loans, the awarding of no-bid contracts, and executive perks for college administrators.

At Sonoma State, nearly a million dollars in public funds were diverted from the campus and system operating budgets to provide financial backing for a “private” auxiliary’s failed commercial real estate investments.

The CSU Stanislaus Foundation drew national media attention in 2010 when it came under fire for refusing to disclose the fee it paid former Alaska Governor Sarah Palin for a June fundraising appearance.

When faculty members, Yee and the open government group CalAWARE demanded to know how much this was costing the CSU system, university officials rebuffed them citing a confidentiality clause in the contract with Palin and the fact that no “public” monies were to be used. That spurred an investigation by then-state Attorney General Jerry Brown.

The Sacramento Bee wrote of the Palin brouhaha, “It took Sarah Palin’s celebrity status to elevate what had been a sleepy issue about California’s colleges and universities hiding information behind their ‘private’ nonprofit foundations. This case also revealed how the college’s top administrators and foundation boards are virtually the same.”

CFA’s Political Action Chair John Travis, a professor of Political Science at Humboldt State, summed up the years-long fight to pass this legislation: “For years faculty have seen the growing trend of auxiliary organizations taking a larger and larger role in providing services and performing the mission of these higher education institutions. Yet, they operate in the shadows because they do not have to comply with the transparency rules like the university with which they are affiliated.

“Today, faculty members can see a fuller picture of how the university spends its money than ever before. But, it is incumbent upon us to continue the fight to make sure the CSU is using all of its resources to provide quality education in the classroom.”

CFA, AFSCME, and the California Newspaper Publishers Association co-sponsored SB 8. The bill was co-authored by a number of Republicans and Democrats, and received overwhelming bi-partisan support in the state’s Assembly and Senate with just handful of “No” votes being cast—a rarity in today’s polarized political landscape.

It was also supported by the editorial boards of the Los Angeles Times, Riverside Press-Enterprise, San Jose Mercury News, Sacramento Bee and San Gabriel Valley Tribune, among others.

See CFA’s news release on the new law.