Chancellor's Recent Speeches

Remarks by Charles B. Reed
Chancellor, California State University
California Business Roundtable Board Meeting
February 5, 2008
Costa Mesa, CA

I’ve been asked to talk about the challenges facing higher education in general, the California State University in particular.

For those of you who like to hear the short and sweet version of things, I’ll give you a six-word version of what I want to get across to you today, and that is: “We must invest in our future.”

I am sure that everyone in this room supports the idea of higher education. We all want to see our children and our grandchildren get on a college track.

In the past, college might have been optional. But these days, a college degree is the very least you need to get a good job and succeed in the workforce.

These days, employers want workers who understand technology, and know how to think and communicate globally. They want workers with the kind of experience and opportunities that come from a college education.

Not to mention that college graduates make more money. A college degree could mean nearly twice as much during a person’s lifetime - $2 million versus $1 million for a high school graduate.

Higher education is also the cornerstone of a healthy society. Studies show that college graduates have lower levels of unemployment and depend less on social safety nets. And fewer end up in prison. With higher incomes, they create more tax revenues. They also tend to be healthier and more involved in their communities. And they are better at child-rearing.

We want to make our communities stronger. We want to watch our neighborhoods thrive. We want our economy to flourish. That is why we need to invest in higher education not just for our own children but for all students, particularly those who are under-represented in the college population.

This means that we must do more than help our own children. We have to reach students from traditionally underserved populations, get them into college and help them along the path to graduation.

If we don’t serve those students – many of who are the first in their families to attend college – our workforce will suffer, and our businesses and economy will pay the price.

The National Center for Public Policy and Higher Education estimates that the personal income of Americans will drop in the next 15 years unless states do a better job of raising the educational level of all racial and ethnic groups. California will see the largest drop – more than $20,000 per capita.

Think about that for a minute, because that is a lot to wrap your mind around.

If we don’t work to reach more students and help them on their way to higher education, we all will suffer. It will no longer be “their” problem that they are not educated and contributing to the intellectual community and economic base – it will be a problem we ignored at our own peril. Public safety will be the big issue.

The California State University

To fill out the picture a little more, let me give you some background on the California State University.

The CSU is the largest university system in the world, with 23 campuses. Our focus is on teaching and undergraduate learning.

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

We also are perhaps the most representative of the statewide student body. We look like California. Our student body is nearly 56 percent students of color, and about 30 percent of our students are the first in their families to attend college.

People also call us the “economic engine” of California because of the vast amount of workforce preparation that we do for the state.

We prepare more students than any other university in California in the fields that drive California: agriculture, information technology, communications, business, tourism, life sciences, education, nursing, engineering, hotel/restaurant management, motion picture and television.


But it is going to be difficult to sustain this investment in our future.

We all have spent the last few weeks hearing about how California’s budget is in deep trouble.

At the moment, the California State University is facing a 10 percent cut – or $312 million – from our 2008/09 budget.

That’s on top of $500 million in cuts we took between 2002 and 2004. We worked our way through those cuts, but we’re not magicians. We can’t keep pulling the rabbit out of the hat. We can’t keep taking more and more students with less money.

What’s at issue with this budget is how California is going to continue to invest in its future. At the moment, California is on the road to building world-class prisons and second-class universities. That is a false investment. For every dollar that the state invests in the CSU, we return $4.41 – that is a true investment.

One problem is that Californians want all of the government services that they can get but no one wants to pay for them.

We need an affirmative commitment to higher education. Californians need to say, “Yes, we value higher education, yes, we understand the future importance of making it accessible to all students, and yes, we want to fund it at a level that makes that possible.”

So where do we start?

  • What kind of California do we want? What are the priorities we need to set: health care, the economy, education and/or services for the poor?

  • Next, California needs to reform its tax and revenue base. At the moment, 11 percent of citizens pay 80 percent of taxes. The 80 percent is paid by people who make $120,000 per year or more. Everyone ought to share a little bit in that

  • Two, the initiative process has turned California’s ability to fund education upside down, starting with Proposition 13, then Proposition 98. These initiatives have severely limited our ability to fund education. At one time, we had the best schools, but today we are in the lowest quartile.

  • Three, we need a tax and revenue system that fits with our economy. Given that our economy has shifted to more of a service economy, we need a tax on services received.

Again, I know that everyone here supports higher education. That’s why I urge you to talk to your colleagues, legislators and the governor.

Tell them what you’re willing to pay for.

And tell them how you would pay for it, whether it means changing the revenue base, adjusting Prop. 13, putting a sales tax on services – or something completely different.

Higher education is an investment in our economic future. We need a groundswell of support for higher education.

I believe that we can – and should – make that investment together, for the sake of our children, our grandchildren, and for all of California’s students. Our future prosperity depends on it.

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