Chancellor's Recent Speeches

Remarks by Dr. Charles B. Reed
Chancellor, California State University
LeRoy Collins Institute
Board of Trustees Workshop
Florida State University
Tallahassee, FL
August 20, 2007

Thank you for inviting me here today. I am extremely honored to be here before this extraordinary group of Floridians.

We’re here to talk about the future of higher education in Florida.

If I have to sum up everything that lies ahead for Florida’s system of higher education, I would simply say, “We have a LOT of work to do.”

  • We need to shape up the governance system.
  • We need to improve funding stability.
  • We need to assert priorities for the future.

But before we undertake any of these projects, we have to be clear about what our ultimate objective is. Why do we need to do anything? What is the “prize” we have to keep our eyes on?

The simple answer is that Florida’s future economic and social prosperity is at stake.

When we have a strong higher education system in place, we graduate more students who go on to more high-wage, knowledge-based jobs, and our economic wheels start turning in high gear.

If we allow our higher education system to languish, fewer young people will have opportunities for good jobs, our workforce will stagnate, and our economy will suffer.

Florida, the choice is yours: Do the hard work now and yield dividends for the future, or do nothing and watch all of that potential slip away.

GOVERNANCE

Let me start with the first big task ahead: Governance.

Some states have central higher education governing systems; some do not.

Most people outside higher education don’t think that much about how their state college and university systems are run.

But somehow only Florida has made such a mess of its own governing system that it generated an opinion piece in the national edition of the New York Times by Stanley Fish.

Try explaining to an outsider that there was a Board of Regents, then the Regents went away, then voters passed a former governor’s initiative that brought back the Regents, but they are now called Governors, and we still haven’t settled once and for all who has the right to set tuition.

The average person would say “Huh?” to which I would respond, “Exactly.”

This is not the kind of governance that will allow us to build quality for the long term.

We need to have a cohesive plan in place for a stable, functioning system of higher education in Florida.

Having a university system allows us to avoid costly competition and duplication between the universities.

It allows us to leverage the institutions’ collective strength in Tallahassee and Washington.

And most importantly, it allows us to keep the focus on the educational mission of the institutions and build the kind of quality that establishes a national reputation.

Consider California’s three-tier system: It was created by a Master Plan for Higher Education, and it has stood the test of time for nearly 60 years.

California is a Nation State – 38 million people – 6th largest economy in the world – and more billionaires.

We have the 10-campus University of California system, which is governed by a Board of Regents; they serve 12-year terms.

The 23-campus California State University system, which is governed by a Board of Trustees; they serve 8-year terms.

And the 109-campus California Community Colleges system, which is governed by a Board of Governors, along with 72 district boards. They are elected in a community college district.

The University of California is unquestionably the best research university system in the world. Ten (10) campuses, 1 system – 6 universities in the AAU – UC Berkeley didn’t hold anyone back.

And the California State University is the best teaching university system in the world. Twenty-three (23) campuses, 1 system.

We have 450,000 students and 46,000 employees. We prepare more than 96,000 graduates per year for the state’s workforce.

Our student body is nearly 56 percent students of color, and about 30 percent are the first in the families to attend college.

We have a single budget for all the campuses, we have common admissions standards, we have the same personnel and bargaining policies for all campuses, and we advocate before federal and state agencies as a single entity. We have a strong Board, and so does the UC.

As an independently governed university system, we are not subject to the whims of the legislative process and we are able to operate relatively free from partisan political intrusion. In 10 years no legislator has ever called me to hire someone – or put a building in the budget.

Of course the legislature and governor should have some involvement in university affairs. They need to have a level of oversight as representatives of the taxpayers.

But political leaders with a partisan agenda can do harm to these institutions, and by association, have a negative effect on the state’s economy.

That is why California’s university systems – and those in many other states as well – have benefited from strong governing boards that operate with only the best interests of the university in mind. What might be best for one University may not be best for the State.

Florida needs to chart a direction for its universities that is sure and strong, one that cannot be swayed by political winds and one that will last for generations. A long sustained investment is what is important.

STABILITY

That leads me to the next issue – Stability of the university system.

The 2005 “Tough Choices” report from the Collins Institute said: “Rough estimates for 2005 place Florida’s per capita spending on higher education, public and private, dead last among the states, about 55 percent of the norm.”

Dead last – now those are words no one wants to hear about our states or our universities.

Why is the investment in Florida higher education so poor? Because it is subject to the quirks of the legislative cycle.

In Florida, it’s often said, “we’re cheap, and proud of it.” In the state budget, higher education “gets what is left” after all other needs are met.

That’s a good way to manage a budget if you’re talking about spending on luxuries. But we cannot afford to make higher education a luxury. Higher education is a necessity for our future economic health.

In California, the UC and the CSU have shaped a long-term financial agreement with the governor called the “Compact.”

Former Gov Pete Wilson initiated the first Compact, followed by Gray Davis, who called it “The Partnership,” and now we are back to the Compact with Governor Schwarzenegger.

These agreements all provide specified base budget funding increases as well as defined increases for enrollment growth, and allow the governing Boards to set tuition.

Our current Compact began in 2005/06 and runs through 2010/11. In the first few years, our base budget increased by 3 percent plus 1% non- reoccurring and enrollment by 2.5 percent. It includes an annual capital budget of $400 million for construction.

Now, our base budget increases are 4 percent reoccurring plus 1 percent non-reoccurring and enrollment growth stays at the 2.5 percent level. The Compact allows the Board to increase tuition up to 10% per year.

We certainly could use more funding, but the Compact provides the foundation from which we begin negotiations each year. What it allows us to do is to ensure quality, student access and affordability. It is a floor.

It’s especially important in years like this one when the budget is not passed on time. We know that we have that funding commitment, and therefore we know how many students we can enroll each fall. And the growth will always be funded.

Taken from a broader perspective, the Compact is an up-front commitment to higher education’s significant role in the state’s economy. It recognizes that a state cannot be great without world-class universities.

California did not become the world’s 6th-largest economy on its own. It got there in large part due to the research, development, creativity and workforce emanating from the University of California and the California State University. The citizens of California and its political leadership support higher education.

In 2004, a system-wide impact study showed that the CSU’s direct economic impact on the state of California is $7.46 billion. For every $1 the state invests in the CSU, the CSU returns $4.41, a four-fold return on investment.

A similar report on the UC system, completed in 2003, showed that its campuses had a total impact between $14 billion and $16 billion annually.

These numbers reflect the fact that universities are cultural, social, and intellectual hubs for their communities and states. They are where innovation starts, knowledge is created, entrepreneurs are born and nourished, and scientific breakthroughs occur.

They also create jobs in the industries that make the state competitive on a national and global scale. California’s economy recreates itself about every 10 years.

Not to mention that when a state invests in its public university systems, the state as a whole receives a lifetime earnings boost. Per capita income is higher in places like California where a large percentage of the population has a university degree.

In Florida, where funding for higher education has been spotty, per capita income relative to other states is on a downward slope.

The “Tough Choices” report notes that Florida declined in comparison to national and regional averages from 1989 to 2005. That’s in part due a low-wage economy and the lack of high-wage jobs being created.

And that’s why the report says: “Florida has a long way to go in pre-K-12 results, college degree production, and investment in top-level university research before it can put a world-class labor force together with a dynamic high-wage segment of the state economy.”

PRIORITIES

That leads me to the third major task ahead, which is asserting priorities.

Beyond governance and stability of the university system, we need to pay attention to funding for our universities.

I believe that 1) Florida universities are under-funded; and 2) Florida tuition is way too low; and 3) Florida’s financial aid system is broken.

According to the “Tough Choices” report: “Modern facilities and pockets of research excellence notwithstanding, there is a mass production, on-the-cheap character to the university system. With better support Florida would realize a ready payoff in a more qualified workforce and strengthened research capability in universities.”

We need to set a higher priority for better funding and adequate and affordable tuition levels.

We also need to look critically at programs like the Bright Futures scholarships. Scholarships should be based on need, not solely on merit.

Why are we financing higher education for students from families who can well afford the tuition many times over?

I called it “one of the dumbest public policies” when it was created when I was Chancellor here. I think today I’d call it “the dumbest, not just one of the dumbest.”

The effect is that Florida’s universities are not educating the growing populations of underserved students, particularly those of color and most needy. It is these students whose educational levels will ultimately shape the direction of the state’s economy.

Florida must disconnect from the Bright Futures program. You can’t afford it and it is just plain wrong.

Mark Howard, editor of Florida Trend.com, recently called the Bright Futures program and the Prepaid College Plan “programs that for all their good intentions, help imprison the system in mediocrity.”

When I was in Florida, I worked hard to elevate the quality of our institutions. We made big strides like bringing the prestigious High Magnetic Field Laboratory to FSU.

So when our university system is described with words like “mediocrity” – that hurts.

NEXT STEPS

To wrap up, I believe that Florida has the potential for – and deserves – a world-class system of higher education.

I’d like to call attention to these words from the recent Pappas report on Florida’s universities: “If the state’s economy is to be further transformed from its historical emphasis on tourism and many low-wage jobs into a rich and diverse economy…and takes advantage, through education, of its diverse population… and connects that economic future to the intellectual capital that exists in its universities, then there will need to be a level of cooperation and stewardship never seen before in the state.”

With that thought in mind, I’m going to take the liberty of proposing that the Board of Governors have a conversation with Governor Crist; and that we establish a commission to develop a master plan for the future of Florida’s higher education system.

The challenge for such a master plan is to articulate a forward-looking vision, one that recognizes that education is an investment in the future.

  • You need to shape up and strengthen the governance system
  • Improve funding stability
  • Assert priorities for the future

The Pappas report cited the importance of designing an intentional future for Florida’s higher educational institutions. That means a future filled with defined goals rather than uncertainty; of clear direction rather than catch-as-catch-can governance and funding.

One university getting something at the expense of All the others, based upon who is Speaker or President of the Senate - Will never work!

Our students and all of our citizens deserve the very best effort we can put forward.

We hold this state’s future in our hands.

Thank you very much. I will be glad to take any questions you might have.