Chancellor's Recent Speeches

Remarks by Dr. Charles B. Reed
Chancellor, California State University
Florida Council of 100
"A Splintered System"
Naples, FL
November 10, 2011

It's an honor to be here before the Council of 100. This is the distinguished organization that helped Governor Ferris Bryant build Florida's higher education system back in 1961. And today, the Council of 100 faces challenges in Florida that are no less consequential than the ones before the original group.

Fifteen years ago, I was part of the Business-Higher Education Partnership through the Council of 100 that put out a landmark report on higher education in Florida called, "The Emerging Catastrophe and How to Prevent It."

You may recognize some of the respected business leaders who were involved in the report: Chuck Cobb, Richard Nunis, Jack Critchfield, David Fuente, Burke Kibler, Robert Monroe, Adelaide Sink, Gus Stavros, Robert Taylor, Stella Ferguson Thayer, and Stewart Turley.

The report detailed an expected surge in enrollment, and how the system was being underfunded at a critical time. It also called for more efficiency and less duplication to create a more effective system. The two follow-up reports were called "Catastrophe Forestalled" and "Bursting at the Seams."

Fifteen years later, where do we stand? If I had to write a report again today, I’d call it: “A Splintered System.”

Why has Florida higher education fallen apart since those years when we first warned of trouble around the edges? Because there is no cohesive mission or commitment holding it together.

Compare it to the outstanding state higher education systems in New York, Wisconsin, North Carolina, or even California. Don't get me wrong: California doesn't have a perfect higher education system. But here's what we do have in California:

  1. A central plan
  2. A focus on economic and workforce development
  3. A commitment to the common good

One - A Central Plan

Florida is lacking a strong central plan, or sense of purpose.

To give you some perspective, in California we have a very clear Master Plan for Higher Education that just celebrated its 50th year. Everyone in California knows about the Master Plan. The Master Plan divided our higher educational system into three distinct segments:

  • University of California - 10 campuses, 220,000 students. Graduate institutions focused on research. Total operating budget, approximately $22 billion - includes enterprises such as teaching hospitals and research at the national labs.
  • California State University - 23 campuses, 412,000 students. Masters-level institutions focused on providing the baccalaureate degree and promoting workforce preparation.
    Total operating budget, approximately $6 billion.
  • California Community Colleges - 112 colleges, 2.9 million students. Two-year colleges focused on transfer degrees and technical training.

Back in the 1960s, the California Legislature decided that access to excellence was the priority. If you were needy, you had access to a high-quality degree and a path to a job.

In California, while the governor appoints board members to the UC and CSU, those two boards operate with great flexibility as corporate boards. The UC Regents serve for 12-year terms and the CSU Trustees serve for 8-year terms. There has not been political intrusion. The boards are by and large independent. They set tuition. They receive a lump sum budget. There are no specific buildings mentioned in the budgets.

Here in Florida there has been little to no leadership at the state level in guiding Florida's universities to a common mission. Everyone wants law schools, medical schools, and graduate programs because they are prestigious. So now, schools are creating more grad programs at the expense of undergraduate programs - with the dollars generated by undergraduate enrollment. These low-enrollment duplicative graduate programs have not served the state well. It's turned into what the local chamber wants, not what the state of Florida needs.

You can add to that the most recent debate about USF-Poly in Lakeland becoming an independent institution. That’s no place for a polytechnic university. There’s no Silicon Valley around Lakeland. The University of Florida, the University of South Florida, and the University of Central Florida could take all of the engineering students. By comparison, California has only 2 polytechnics for 38 million people - and we have Silicon Valley.

In Florida, you also have community colleges offering baccalaureate degrees. This has resulted in "degree creep" - and it has short-changed the state in terms of workforce development programs, like allied health and occupational/technical programs. It has now become a race to see who can become a four-year college.

These institutions are now acting as lone players or competitors. There’s no sense of mission because it’s every institution for itself. And there’s no incentive for them to act in Florida’s best interests.

My legacy in Florida is no new medical schools, and no new law schools. There is nothing wrong with “no.”

Two - Focus on Economic Development

In California, it is because of the university systems’ clear mission that we have been able to focus on economic development and workforce needs.

California is the 7th largest economy in the world. The UC has more Nobel laureates than any university system in the U.S. The CSU produces more engineers/computer scientists/ teachers, nurses, and workers in agricultural fields than any other university. We had 98,000 graduates last year.

Because the campuses work together as systems, we have each been able to produce reports showing our dramatic economic impact.

For every $1 invested by the state, the CSU generates $5.43 for California's economy. CSU-related spending generates more than $17 billion in economic impact in California that supports 150,000 jobs in the state. Also, the approximately 1.96 million CSU bachelor's and master's alumni living and working in California earn an estimated $122 billion in income. Of this amount, an estimated $42 billion is attributable to their higher level of educational attainment; i.e., their CSU degrees.

And the UC generates $46.3 billion in annual economic activity for California and contributes $32.8 billion toward California's gross state product through direct spending and multiplier effects.

By showing these numbers, we are able to remind a larger audience of the major impact and long-term importance of a healthy higher education system. We want employers and businesses to know this: Universities are not anti-workforce. We want to provide you with students who can write proficiently, think critically, and will be a dynamic addition to the workforce. We want to provide you with students who can work in teams, use technology, solve problems, and speak more than one language. We aim to produce as many STEM grads as possible. And we know you also need students who are skilled in the arts and humanities. Those students are highly valued in the Silicon Valley and in the L.A. Basin for their creativity and problem-solving skills.

The California business community has bought into higher education because of our commitment to workforce development and their workforce needs. We know that this is what Florida employers want from their employees too. And if you can’t find them from Florida graduates, you’ll hire from elsewhere. That’s why Florida lawmakers and policymakers have to understand the need for supporting higher education and critical skill development.

Three - Commitment to the Public Good

Higher education has the ability to lift up the entire society through economic growth, higher tax revenues, and greater community participation.

Yes, it’s true that we need accountability to ensure that the money is well-spent. But policymakers and the public need to understand that support for public universities equates to long-term benefits for society. The CSU even uses a Public Good page to report online to the public about how well we are doing on our goals and mission. For example, the community service done by CSU students is valued at approximately $650 million. And the CSU has created innovative programs to reach under-represented student groups by working directly with veterans, African-American and Latino communities; and by distributing a “How To Get to College” poster that we publish in eight languages.

Then of course there are the individual benefits to higher education. What about that person who is given the ability to earn a degree and then goes on to change the world? My colleague Mark Yudof, the head of the University of California system, recently wrote about the value of higher education in Trusteeship magazine, using the example of former U.S. Supreme Court Chief Justice Earl Warren. Earl Warren came from a working-class, immigrant family in Bakersfield. But because the University of California accepted students from all backgrounds, he was able to attend and graduate from Berkeley. For the rest of his life, he credited his California education with shaping his incredible career.

Now, as Mark Yudof describes it, the new “Earl Warrens” of the state are out there - except their names are more likely to be Ernesto or Elena. They’re just as motivated to learn and help their communities - and they know that higher education is the ticket. That’s yet another reason why California passed the Dream Act last month.

The reasoning behind the California Master plan - and the guiding principle of the UC and the CSU boards - is a vision of the greater good, for the entire state of California. In California, you won’t see competition between the UC campuses or between the CSU campuses. They both operate as a system. And the Legislature doesn’t make regional decisions about universities, they make state decisions.

In Florida, what has been the outcome since the Board of Regents was dissolved? Runaway presidential salaries. Wasteful spending on duplicative programs. Two state medical schools have since grown to five.

Florida's Board of Governors also needs to be able to do their job, which is to look after the universities. Their role needs to be respected, apart from the governor or the Legislature. They gave away their governance functions in their very first meeting.

In Florida it seems that the thinking has become, “Higher education is a personal good - people who will benefit should pay more.” So tuition goes up, and it prices out people at the low-income, high-talent level who would benefit most from higher education.

That gets to my last issue - financial aid. California puts billions of dollars into financial aid.

The CSU sets aside 1/3 of its tuition to go into financial aid - in addition to state Cal Grants and federal Pell Grants. Based on the most recent numbers we have, the CSU spends total of about $1.6 billion in financial aid.

The preliminary numbers from 2010/11 show that approximately 180,000 students received a full ride - that’s no charge for tuition. Those represent students with real financial need. In general, families who make less than $70,000 pay nothing.

Florida’s financial aid system is upside-down. Bright Futures provides the most merit aid to people who need it the least. People who get Bright Futures tend to be kids who have enriched education, travel a lot, and do well on tests. The aid disproportionately goes to wealthy families.

So it has become more than just a political issue. This is a civil rights and moral issue. Florida can’t afford to carry out this program anymore.

What will happen in Florida if the current aid system continues as is? Will we be able to reach the “Ernestos” and the “Elenas” out there? Or will this become a state with a vast swath of the population that is under-educated? And will the middle class keep shrinking until it disappears entirely?

I will say this much: This organization - the Council of 100 - was originally created with the purpose of supporting the needs of Florida’s universities. And this is where your direction needs to be focused, now more than ever.

Have you read these 15-year-old reports? You should re-read them and see where we are now in relation to where we were when we had an “emerging catastrophe.”

The people of Florida look to the Council of 100 as a distinguished body that will provide leadership. There is an expectation there that you would weigh in as it relates to Florida's economic well-being.

If Florida continues in the current direction, it does so at its own peril. Because when the higher education system splinters to pieces, the future workforce and the economy will follow. And I know that this state - which is home to so many incredible resources and talented people - can and must do better.

Thank you so much for inviting me to speak. I will be glad to answer any questions.