The 2021-22 Budget: California Institutes for Science and Innovation

analysis full gutter The 2021-22 Budget: California Institutes for Science and Innovation MARCH 2021 In this post, we describe the Governor’s proposal operations. Though the state has since eliminated relating to the California Institutes for Science and this earmark and folded the associated funds into Innovation (hereafter referred to as “the institutes”), UC’s main appropriation, UC continues to allocate which are administered by the University of this amount of General Fund to the institutes. California (UC). We first provide background on Today, UC reports total core funding for the the institutes’ activities and budget. Next, we institutes of $16.6 million, consisting of state funds describe the Governor’s proposal. We then offer and campus funds. On top of this core funding, our assessment of the proposal and make an the institutes receive additional funds from federal associated recommendation. grants, private donations, and other external sources for specific research and other limited-term Background endeavors. State law requires UC to match two UC’s Four Institutes Focus on Research and dollars from external and nonstate sources for Economic Development. Originally established by each dollar of state funding appropriated to the Chapter 79 of 2000 (AB 2883, Villaraigosa), each institutes. of UC’s four institutes is a multicampus endeavor Proposal focused on research in select science and engineering fields. As Figure 1 shows, two of these Proposes One-Time Funding for institutes involve northern California campuses Education-Industry Partnerships. The Governor’s and two involve southern California campuses. All budget provides $20 million one-time General Fund campuses except UC Riverside participate in at to the institutes. The proposed provisional language least one institute. Each institute oversees facilities indicates the funds could be used to (1) provide across its participating campuses that contain students with stipends to enable them to connect specialized research laboratories. Much of the with industry employers and (2) for research teams research that occurs at the institutes is conducted to form industry partnerships. The proposed by collaborative teams of researchers from UC and language indicates that these partnerships are private industry. The institutes also support many intended to better align educational programs and other initiatives intended to foster innovation and workforce needs. UC would have five years to entrepreneurship and connect UC students to job spend the funds. The proposed language does not experiences and opportunities. Mix of Funds Support Figure 1 Institutes’ Core Operations. Institutes for Science and Innovation Are Multicampus Initiatives When the state authorized UC to develop the institutes in 2000, it Institute Campuses provided $170 million in one-time California Institute for Quantitative Biosciences Berkeley, San Francisco, Santa Cruz General Fund over two years to Center for Information Technology Research in Berkeley, Davis, Merced, Santa Cruz support the construction of the the Interest of Society institutes’ facilities. Beginning California Institute for Telecommunications and Irvine, San Diego in 2002-03, the state provided Information Technology $4.8 million General Fund to California Nanosystems Institute Los Angeles, Santa Barbara support the institutes’ annual 2021-22 LAO Budget Series 1 analysis full gutter specify other key parameters for the funds, such plans for the use of the $20 million in one-time as student eligibility and the size of the stipends. funds. Based on these plans, which UC recently These matters would be left for UC to determine. submitted to our office, UC intends to allocate the UC’s Preliminary Plans Vary by Institute. funds equally among the four institutes, providing The Governor’s proposal was not connected to roughly $1 million to each institute each year of the a specific UC request. Since the release of the five-year period. As Figure 2 shows, the institutes’ proposal in January, the UC Office of the President plans vary considerably, targeting different student has worked with the institutes to develop initial populations, supporting different activities, and Figure 2 Institutes Would Fund Several Initiatives UC’s Preliminary Plan for Each Institute Assuming Governor’s Proposed Funding Levela Projected Participants Institute Per Year Eligibility to Participate Program Description Use of Funds California Institute for 225 Undergraduate students Students would work in research teams, To be determined. Telecommunications from San Diego, Irvine, overseen by one faculty mentor and and Information and possibly Riverside. one industry mentor. Students would Technology also take coursework related to their projects. Center for Information Up to 150 Undergraduate and 25-30 research teams annually, each $50,000 for each research Technology Research graduate students comprised of 2-5 participants, team ($25,000 General in the Interest of from Berkeley, Davis, would conduct projects on various Fund and $25,000 from Society Merced, Santa Cruz, and topics. Up to 30 individual students industry match). Stipends Riverside. annually would participate in industry for individual students not experiences. yet determined. $150,000 annually for administrative costs. California Nanosystems Instituteb Los Angeles 90 Undergraduate and 40 undergraduate students would Average of $2,500 per student graduate students participate in fellowships. for fellowships. Annual cost from Los Angeles, as 30 undergraduate and graduate of $140,000 to $148,000 for well as students from students would participate in a new lab training program. $6,000 the California State hands-on lab training program. per student for summer University and other 20 undergraduate and graduate capstone projects. Annual four-year institutions in students would complete summer cost of $80,000 to $90,000 Southern California. capstone projects. for administrative costs. Santa Barbara 55 Undergraduate and 40 graduate and 15 undergraduate $1,500 per student for short- graduate students from students would participate in short- term research projects. Santa Barbara, as well term research projects, internships, $10,500 to $20,000 per as students from the and externships. student for internships other higher education and externships. No segments. administrative costs included in proposal. California Institute 20 Postdoctoral researchers Ten postdoctoral researchers each $70,000 for each postdoctoral for Quantitative from Berkeley, San year would receive proof-of-concept student. $20,000 for each Biosciences Francisco, Santa grants for research projects that aim undergraduate intern. Cruz, Davis, Merced, to mitigate health disparities. Ten $100,000 annually for and Riverside. undergraduate interns would receive administrative costs. Undergraduates from stipends for industry experiences. community colleges. a This proposal came from the administration, rather than UC. At our request, UC provided information regarding how the institutes planned to use the proposed funding. This figure shows our summary of the information UC provided. b This institute submitted separate proposals for each of its participating campuses, with each campus assuming it would receive $500,000 per year ($2.5 million across the five-year period). 2021-22 LAO Budget Series 2 analysis full gutter providing differently sized stipends. Together, Unclear How Proposal Would Interact the institutes plan to serve up to 540 students With Forthcoming Workforce Proposal. The annually, or up to 2,700 students over the five-year Governor’s Budget Summary indicates that the period. Though only one institute included explicit administration plans to submit a higher education plans to have industry funds match state funds, and workforce proposal totaling $250 million in the proposal presumably would be subject to the one-time General Fund. According to the Governor, 2:1 matching requirement in existing law. this forthcoming proposal will be focused on “workforce development, segment alignment, Assessment and improving linkages between higher education Proposal Has a Few Key Weaknesses. The institutions and employers.” These objectives are administration’s stated objectives of aligning very similar to the Governor’s objectives for funding education programs to workforce needs, better the institutes. Without having the much larger connecting students to job opportunities, and proposal, the Legislature cannot compare the two fostering economic innovation are laudable in initiatives and assess whether one might have concept. The proposal, however, raises three stronger justification and be more cost-effective concerns. First, the proposal likely would have than the other. limited impact on California’s students and Recommendation economy, as it would support opportunities for a small number of students in a narrow set of fields. Request Administration to Provide Stronger Second, the notable variation in each institute’s Justification for Proposal. Prior to taking action plan appears to reflect local institutional priorities on this proposal, the Legislature could request the instead of a statewide assessment of which administration to respond to the key weaknesses students and activities are of highest priority for identified above. Specifically, the Legislature could workforce development. Third, the administration request that the administration (1) provide an to date has not provided a statewide assessment analysis of education and workforce gaps in the of gaps in educational programs, gaps in workforce state; (2) describe how funding the institutes would supply, or unmet industry demand. Without more address these gaps and unmet industry demand; strategic statewide planning, the Legislature can and (3) explain how this proposal is intended to have little confidence that this proposal is targeting interact with the larger, forthcoming $250 million limited resources toward the state’s highest priority workforce proposal. Were the administration not workforce needs. able to provide the Legislature more compelling information in these areas over the next couple of months, we recommend the Legislature reject the $20 million in one-time funding for the institutes and redirect those funds toward higher one-time state budget priorities. LAO Publications This report was prepared by Jason Constantouros, and reviewed by Jennifer Pacella and Anthony Simbol. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. 2021-22 LAO Budget Series 3