By Donna Hemmila

As California struggles with its greatest budget crisis since the 1930s, leaders of the state's public higher education systems recently highlighted the role universities and colleges can play in digging the state out of the recession.

The way to create jobs is to invest in education and research, said University of California President Mark Yudof speaking at a forum titled "Educating California: Preparing Our Future Workforce."

California Community College Chancellor Jack Scott and California State University Trustee Roberta Achtenberg joined Yudof at the Sacramento event, which the Public Policy Institute of California sponsored on June 18.

"Your only hope is heavy investment in intellectual capital – in human capital, the development of young people, in creating smart people who will outthink other people around the world," Yudof said.

At the same time California is facing a $24 billion budget gap, a "skills gap" is looming. By 2025, according to a study from the Public Policy Institute, 41 percent of the jobs in California will require at least a bachelor's degree, but only 35 percent of Californians will have one. California will face a shortage of 1 million college graduates, according to the "Educating California: Choices for the Future" study. Cuts in education spending are against the state's long-term interests, the report concluded.

The Public Policy Institute asked Yudof, Scott and Achtenberg to talk about what California can do to improve educational outcomes and support economic growth.

California will never be able to fill the "skills gap," Yudof said, unless the capacity at the three higher education systems is expanded: "At the end of the day, the only way you can enroll more students is to have more resources to do it."

The University of California faces a proposed $813 million two-year state funding cut as public support for higher education continues to dwindle. A proposal to eliminate the Cal Grant financial aid program, Yudof said, would have a devastating effect on UC's commitment to keep its academic programs accessible to the state's low-income families. Now is not the time to cut financial aid, Scott said.

"We're going to need increased resources for higher education," he said. "We can't do this on the cheap. We can't have a Swedish level of services on Mississippi taxes."

The earning gap between skilled and unskilled workers is growing wider, Scott said. At the same time, UC, CSU and the community colleges have all been forced to limit enrollment to cope with state budget cutbacks.

CSU is considering an enrollment cutback of 40,000 in 2010-11, Achtenberg said: "That is a catastrophe. We need to go in the opposite direction if we are to save California from the precipice."

All three higher education segments need to collaborate more with employers, she said, to make sure they are giving students the skills they need to fill future work force needs.

Yudof said the universities and colleges can do a better job at increasing graduation rates and improving transfer rates between community colleges and CSU and UC.

UC has committed to increasing its number of transfer students and has seen a record 12 percent increase in fall 2009 admissions offers to California Community College students. Increasing the number of transfer students saves money for families, the state and the universities, Yudof said.

"The problem today as I see it is the three (higher education) systems in this state are often treated like they’re Wal-Marts," Yudof said. "That is people are interested in how much we pay our employees, they’re interested in what we charge our customer, but nobody’s asking any questions about what’s going on, how could we improve the quality, what could we do to provide more opportunity? I think that’s really a pity, and it’s something that needs to be reversed."

Donna Hemmila is managing editor, integrated communications, UC Office of the President.