State Higher Education Committee Approves UC Salary Cap Bill

Assemblyman Roger Hernandez (D-West Covina) announced that Assembly Bill 837, which would cap the gross salaries of all University of California employees at $500,000, passed out of the state’s Committee on Higher Education on April 8. 

The bill is also meant to promote transparency by increasing public reporting surrounding the allocation of UC system compensation, including that toward paying Senior Management Group or Management and Senior Professional salaries.

The proposal to cap UC employees’ cash compensation at $500,000 could produce $80 million of savings annually, according to a press release from Hernandez’s office.

His office also stated that research conducted by the American Federation of State, County and Municipal Employees suggests that UC spending increased by 40 percent between 2007 and 2013, while spending on the salaries of the UC system’s wealthiest employees simultaneously tripled. 

It is these employees that Hernandez believes the bill will target, with the intention of diverting financial pressure from taxpayers and students.

“Less spending on [the] UC [system]’s bloated executive ranks means more resources will be available for students,” Hernandez said in his press release. “This bill is directed toward a very small percentage of UC employees that take up a large portion of the UC budget, student funds and taxpayer dollars.”

 The press release goes on to cite the UC regents’ recent vote to hike tuition by 5 percent every year for the next five years. 

The University of California Office of the President issued a letter to Assemblyman and Chair of the Higher Education Committee Jose Medina (D-Riverside) stating its opposition to the bill on April 1. Associate Vice President and Director of State Governmental Relations Steve Juarez, the author of the letter, wrote that compensation was necessary as a means by which to stay competitive as a university system.

“We share the desire for fair and appropriate compensation for our employees; however, we also have a responsibility to the state to ensure that the [University of California] is expertly managed to ensure it remains the finest public research university system in the world,” Juarez said in his letter to Medina. 

Juarez went on to claim that of the UC employees who would be affected by the bill, 89 percent are either faculty or staff physicians who are part of the health sciences and provide clinical care at the University of California’s several teaching hospitals. The bill could severely undermine the UC system’s ability to attract what it considers individuals qualified to do this work, Juarez said. 

Juarez further claimed that compensation for employees is paid from a variety of sources.

“For example, our medical centers and hospitals generate revenue that not only pays the salaries and compensation of all their staff but also contributes to and supports the health-sciences schools,” Juarez said.

Javiera Cartagena, district director in the Office of Assemblyman Hernandez, told the UCSD Guardian that competitiveness is not necessarily an issue, as the UC system can be seen as attractive to employees for other reasons. 

“People are not only attracted to the UC [system] because of its salaries; the mission of the UC [system] is what makes it golden,” Cartagena said. “Moreover, the generous pension benefits are held harmless by the provisions of this bill.”

AB 837, which was first introduced in February, received bipartisan support from the Committee on Higher Education and will be passed to the Committee on Appropriations. 

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