Higher education is key to providing Californians with the knowledge and skills needed for developing and maintaining a thriving and stable economy and for strengthening our system of government. This year in particular, in the face of severe cuts in state funding, it is imperative that all of us consider and speak up about the importance of public higher education to the State of California, its economy and its citizens.

California's public higher education comprises the California State University, the University of California, and the California Community College systems. As president of California State University, Hayward, I am most familiar with the CSU system, which provides high-quality, affordable education to the people of this state. It is a thriving and vital economic engine providing irreplaceable power to California's growth and prosperity.

The California State University is the nation's largest university system with 23 campuses and seven off-campus centers. CSU serves nearly 408,000 students and employs 45,000 faculty and staff.

CSU reaches out to all of our communities and reflects the ethnic and cultural composition of the citizens of California. CSU is the nation's most diverse university system. Reflecting the East Bay region it serves, Cal State Hayward is one of the most diverse campuses in the CSU system. Students from a range of economic, social, ethnic and cultural backgrounds have found a welcoming and supportive environment here with quality programs that prepare them to reach their career goals.

Approximately half of the bachelor's degrees and a third of master's degrees awarded annually in California are from the CSU. Since the system formed in 1961, the CSU has awarded more that two million degrees. During this same period of time, Cal State Hayward awarded approximately 85,000 degrees.

These higher education degrees are vital to the growth and success of the state and region, and they have very special importance to our graduates. The university experience develops intellectual and economic potential. The average university graduate with a bachelor's degree earns twice as much as the average high school graduate. The university degree represents an opportunity for a brighter and more stable future.

Research also shows that the children of university graduates are more likely to attend college.

HISTORICALLY the CSU has played a critical role in preparing highly qualified candidates for the state's workplaces. It is the major post-secondary educator of our business and work force leaders. Our graduates provide the elected and administrative leadership for state, local and regional governments. Our graduates are cultural leaders in California. In addition, CSU graduates help drive the education, multimedia, information technology, bio-medical and international trade industries.

CSU is a national leader in preparing students who eventually earn doctoral degrees in science and engineering.

We are proud that 85 percent of Cal State Hayward's graduates have chosen to live and work in the East Bay, and they make a significant contribution to the economic capacity of our local economies.

The 2003-2004 budget recently passed by the legislature and signed by the governor calls for deep cuts at the CSU, for a total reduction of approximately $345 million, or about 13 percent of its previous operating budget. These cuts seriously erode our capacity to provide access to qualified students. To partially address this shortfall, the CSU has raised tuition by 30 percent this year. Even with this increase, the CSU will have to close its doors this spring to 30,000 new students. The budget language calls for zero enrollment growth at CSU and the University of California for 2004-05.

This budget carries a stark message about the future of access at California's public universities. As CSU's Chancellor Reed has said, "We have entered a totally new budget environment."

Reductions in instructional and staff positions will mean fewer classes for students, and could mean it will take longer to complete a degree. University officials are faced with the terrible choice of limiting student access or reducing the quality of the CSU education. This is a choice the state and the university systems should not have to make.

At Cal State Hayward, we may be unable to admit new freshmen in the spring 2004 quarter. We also have convened a faculty layoff committee.

Our capacity to serve the state, our students and our communities has been seriously damaged.

The vital role of the CSU as an access system and as the economic engine of California has been called into question.

In the long term, it is imperative that the state reform its education financial structure, enabling it to return to its long-standing promise of access to quality public higher education in both good and bad economic times. We are eating our seed corn.

Norma S. Rees is president of California State University, Hayward.