Higher education has long served as the key engine driving California's economic growth and quality of life. Clearly, the economic and social benefits our community colleges and universities provide far outweigh the costs to taxpayers.

California's Master Plan for Higher Education has long promised that every California high school graduate can attend a public college or university to secure the benefits of a college education.

Californians have embraced the concept of higher education as both a public good and a private good, and the state has invested wisely in developing one of the best public higher education systems in the world.

Unfortunately, California higher education now faces a formidable challenge. During the current year, our public universities and community colleges have experienced deep budget cuts and the situation looks even worse for next year.

The University of California and the California State University systems will be expected to serve an increasing number of students (approximately 700,000 more students in the next decade) without an increase in state funding.

The Assembly Higher Education Committee has initiated a series of hearings to address this issue. We are committed to sustaining the Master Plan goal of providing access to higher education for all California high school graduates.

However, we need to assess the effectiveness of our higher education funding policies and principles and to align those policies and practices with our state's higher education goals. The Assembly Higher Education Committee is committed to assuring:

1) Access to higher education for all qualified Californians; 2) quality teaching and programs of excellence; 3) educational equity through a diverse and representative student body and faculty; and 4) cost effectiveness.

Continued budget cuts and dramatic increases in student fees will severely limit both access and quality. To continue California's success in achieving these four goals during a period of rapid enrollment growth, our colleges and universities will need additional funding. This can only be achieved if California makes changes in how we finance our public education system.

The Assembly Higher Education Committee is reviewing several alternative policy options for funding higher education. During the next few months we will be focusing our attention on the following alternatives:

-Implementing a long-term student fee (or tuition) policy, setting student fees as a percent of educational costs and then annually adjusting the fee level based upon changes in the Consumer Price Index (CPI). This approach will provide greater predictability for students in planning for their college expenses. -Improving the utilization of existing campus facilities by providing incentives for students to move through and complete their university degree programs more rapidly.

-Using technology to improve student learning and reduce the costs of instruction.

By focusing on large-enrollment introductory courses, institutions can implement course-redesign efforts to improve the quality of student learning and reduce the costs of instruction.

- Changing the policies that guide the funding of public universities and community colleges to implement differential funding by level of instruction. This approach is used by approximately 25 states, and provides equitable funding for lower division, upper division, and graduate programs. This approach allows the Legislature to target limited funds at the highest priority programs and levels of instruction.

-Changing the way we fund our community colleges. While California's community colleges enroll the largest number of students in higher education, the funding approach for the community colleges is based on a K-12, rather than a postsecondary, finance model.

Not only is there a disconnect between the current funding mechanism and the real costs of providing postsecondary instructional services, but also, the current approach involves far too many bureaucratic restrictions and produces unjustifiable differences in funding levels among the community college districts.

As we conduct our review of higher education finance, we need to remember that our objective is not just to build and maintain strong colleges and universities. We are even more concerned about providing all Californians with the services they need to become economically self-sufficient and productive members of our society.

Our public colleges and universities are an essential means to this end, which will result in a higher quality of life for all.

-- Assembly member Carol Liu represents the 44th Assembly District, which includes the cities of La Canada Flintridge, Pasadena, South Pasadena, Temple City and Duarte; portions of Arcadia and Monrovia; and the communities of Altadena, Eagle Rock, Glassell Park, and Highland Park.