Remarks by Dr. Charles B. Reed
Chancellor, California State University
CSU Legislative Day – State of the CSU Address
Sacramento, CA
March 22, 2004

Good morning. I appreciate all of you coming here today to support the California State University on CSU Alumni Legislative Day.

I’d like to recognize and give a special thanks to those who organized today’s events: the CSU Alumni Council, the CSU’s Governmental Affairs office, the Chancellor’s Office staff, and all of our campus representatives and supporters.

Reflections on March 2 election

Now that California voters have passed the state’s bond measures Propositions 57 and 58 and also continued to show their support for quality education with the passage of Proposition 55 (by a landslide), and thank you all for that – we can start looking ahead.

The state still faces a deep financial hole, and the CSU has experienced three years of continued cuts to its budget. We know that in these tough economic times we are not immune from funding reductions.

CSU Budget Update

We have been working in conjunction with our campus presidents, alumni council, academic senate, students, systemwide budget committee, the Trustees and others to develop a budget strategy to keep the CSU strong. We have also been working closely with the Governor’s office.

The Governor and his staff understand our challenges and express their commitment to investing in higher education. We support the Administration’s call for a long-term fee policy. It is something we have been advocating for a long time. The Administration understands the role CSU plays in economic development.

In terms of the CSU budget, one thing remains clear: we have a commitment to providing our students with a high quality education. This means we will:

• Provide “authentic access” – which means allow students to get the course selections they need to graduate in a timely manner. We will not take more students than we can serve with high quality.
  
  
• We will have to set systemwide priorities to maximize enrollment of eligible students, and remind the state they must have a commitment to invest in the CSU so that we can deliver a high quality education to our students. Access is the state’s responsibility.

But here is the budget picture we have today:

• The decline of the state’s general fund investment in the CSU comes at the expense of increasing student fees or serving fewer students.
  
  
• The state has not funded the University’s normal operating budget increases including technology equipment, libraries and maintenance -- etc.
  
  
• The state has also not funded mandatory costs such as health insurance, workers compensation, new space and energy costs for 3 years.
  
  
• This means that the CSU has to pay these costs out of money that should be used for students in the classroom and access.

The CSU has been working hard to manage these challenges. Here is how the CSU is responding:

• We are managing enrollment targets for the first time and student access to the CSU – in other words, not enrolling students that we cannot serve with adequate course sections, classes and support services.
  
  
• We continue delivering institutional financial aid to help offset increased student fees.
  
  
• We are consolidating courses and reducing low enrollment courses.
  
  
• We are managing summer enrollment in a different manner.
  
  
• And we are holding open vacant positions, reducing travel costs, eliminating professional development funding and potentially, reducing our workforce.

Taking the Long View

I view the past three years of budget cuts as one snapshot on a long journey. The CSU stands strong and ready to meet these challenges and to play a critical part in California’s economic recovery.

It is during these times, that the CSU must diligently focus on its mission - providing affordable, accessible high quality education to students.

That’s what we do best. We have a different mission than the University of California, for instance. We don’t need to compare ourselves to anyone else. We are the best at what we do.

We are 23 outstanding institutions across this state that prepare the most students in the industries that make California successful: engineering, computer science, business, nursing, communications, agriculture, film and entertainment, teaching and many others.

We are the state’s economic engine, and it is important that we remember and remind policymakers that more educated workers means higher tax revenues, greater productivity, and less reliance on government services.

The CSU ultimately can help California become the Golden State it once was and can be again. Here is another way to put it: The CSU is working for California every day.

Harvard Wants to be more like the CSU

I was at a conference a few weeks back and heard Larry Summers, the president of Harvard, speak on “Higher Education and the American Dream.”

As he was speaking, it dawned on me what he was saying…..that Harvard wants to be more like the CSU.

President Summers talked about the growing disparity between students from low income families and the opportunities to attend college.

He said that children whose families are in the lower half of the income bracket are underrepresented in colleges by 80 percent – not so in the CSU.

He bemoaned the fact that very talented students from poor families are denied access to college educations, especially at highly selective places like Harvard – not so in the CSU.

Summers pointed out that students from high income families with low aptitudes are just as likely to go to college as low income students with high aptitudes.

Why? Because some students simply cannot afford to go to college – not so in the CSU.

The urgency of it all, he concluded, was that we have to assure access to everyone, regardless of socioeconomic status, in order to maximize the quality of our college graduates, and make America strong. That’s what we do in the CSU.

He believes excellence in education depends on a more diverse student body, and so does the CSU.

Access for all and diversity are what the CSU is about. O.K., Harvard can learn from us. We are rich in access and diversity: Consider:

• The CSU is the country’s largest university system with 409,000 students and the most diverse, with students of color representing 53 percent of our enrollment.
  
  
• 185,000 of our students come from families making less than $60,000.
  
  
• In fact, 1 in 3 CSU students come from a home where English is a second language.
  
  
• Our fees are among the lowest in the nation.
  
  
• More than half of the students attending CSU receive financial aid.
  
  
• We prepare almost 60 percent of the state’s teachers and we graduate 77,000 students each year.

I’m not telling you this to knock Harvard, of course. They want and need to be more like the CSU.

The point is CSU is a national leader in: providing accessible, affordable, high quality education for students. We are leaders in diversity. We are leaders in preparing outstanding teachers. We are leaders in preparing California’s workforce for the 21st century. This is the message we must deliver today and continue to deliver every day.

California’s Priorities

In previous budget cuts, access was postponed. But, now it is clearly threatened.

We have to realize that for the first time ever, the CSU has had to deny access to qualified students. At least 5,000 eligible students were not admitted to our universities in the winter and spring terms.

The upcoming year will see the CSU redirect students to the community colleges for the first time.

This breaks from the Master Plan promise and our central mission – and occurs at a time when more and more eligible students want to enter college.

Today, we need to remind our legislators that California needs to get its priorities straight and be smart about where it invests its money. There is no greater return than on money invested in higher education. We are an investment, not an expense.

For a minute, let’s compare that compare that to our prison system. It is a wasteful, out-of-control institution with expensive labor contracts. I read in the Los Angeles Times on Friday where lawmakers may have to come up with an additional $544 million for prison guard pay raises and other costs. What a waste.

This state’s priorities are wrong.

Let us invest in something that will truly be effective – education.

The cost of educating a CSU student for one year is $10,500. The cost of housing one inmate for a year is $30,929.

If we can provide our children and youth with an accessible, quality education, we could cut the prison budget and inmate population in half.

By not making education funding a top priority, we will feel the ripple effect of a less educated workforce for years to come.

Instead of driving the economy, continued budget cuts in education will continue to be a drag on the state’s fiscal recovery.

Here are a couple of facts to share on your capitol visits today:

• A person with a bachelor’s degree will earn nearly twice as much over their lifetime as a high school graduate – a million dollars more. Times that by 77,000 graduates.
  
  
• CSU Sacramento alone generated $743.5 million and added almost 16,000 jobs to the region’s economy last year. Imagine the combined impact of those numbers for our 23 campuses.
  
  
• And, the United States Department of Labor reports that 85 percent of the jobs in today’s economy require a college education.

This state cannot continue to take money away from K through 12 public education, higher education, children, the elderly, health services and others in need. We need to be a first-class state.

California was once the envy of every public educator around the nation, and we need to remember what that commitment was like.

Building Partnerships

The CSU is not in this alone. That much we know.

We are working to take our relationship with community colleges to the next level. We are also working on partnerships with hospitals and schools to develop programs that will ensure well trained nurses and teachers entering the workforce.

We are building partnerships with communities, with local business leaders, students, alumni, donors and others to secure the support that we need. CSU contributed 34 million hours of student time to our communities last year.

We know, when it comes down to it – we all have to fight for CSU and what it stands for. We have to be our own best advocates.

It is going to take a lot of hard work to restore the luster to California. But it is our students and our faculty who are in the classroom every day who are going to make a difference in California’s future.

So, instead of focusing on just the budget challenges of today, let’s work to uplift California for tomorrow. Let’s remind legislators that the CSU is part of the solution to the state’s well being.

I’m asking all of you to become players and not spectators for the CSU today. We need to win this investment in the CSU.

Let’s demonstrate the spirit, energy and innovation found throughout the halls of every CSU campus, and remind lawmakers of the CSU’s enormous contribution to returning California to greatness.

Let’s deliver the message loud and clear: CSU is working for California – and the legislature needs to help pay for it.

Thank you all very much for coming and I hope you have a very productive day.

last updated March 23, 2004

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