President Mark G. Yudof's remarks, as prepared for delivery:

Chairs Ruskin and Negrete-McLeod, members of the committee, thank you for the opportunity to address your Joint Committee on the Master Plan for Higher Education. I am Mark Yudof, president of the University of California.

As you have heard from the previous panel, this is a particularly relevant time to re-visit the master plan.

As the president of University of California, I know you will not be surprised to hear me say that the current excellence of California higher education is due in large part to the master plan — both its vision for access and excellence and the detailed blueprint it provided for growth and development of the higher education system we now have today in California.

However, the reason we are here today is that the master plan is now under severe stress. I'm here to tell you that California higher education is in imminent danger of losing its quality and competitive edge.

This is a time of great upset, angst and anger on our campuses.

Students are having more difficulty getting their classes; faculty hiring is nearly frozen; student-faculty ratios are rising. Our students are up in arms over recent fee increases. Sometimes I think we should be out there with them. There's a lot to be said for student anger. Our staff have endured salary cuts and layoffs. Our faculty are losing their confidence that UC will be able to maintain its outstanding faculty, research and instructional programs. Many wonder: Will the outstanding talent come to UC in the future?

Public higher education is exactly that — a public good that benefits all Californians and we do not want to partially privatize it through raising fees.

Yet, that is the direction in which we seem headed. In inflation-adjusted dollars we've lost 50 percent of our state funding since 1990 and we lost 20 percent of our total state-funded operating budget in 2009-10 alone. Chancellors Scott and Reed can cite similar statistics for their systems.

Let me emphasize also that while chancellors Scott and Reed and I represent different segments, we stand shoulder to shoulder as leaders of a single, integrated system of higher education for the state of California.

When CSU is forced to turn away transfer students from the community colleges, or the community colleges may not be able to accommodate some 300,000 students because they cannot afford instructors or classrooms, it affects the health of the entire system. We all seek to help fulfill the president's goal of returning the U.S. to its top position in terms of degrees awarded. Only when the segments are able to serve students as envisioned by the master plan will we have a fighting chance.

I'd like to take a few minutes to address both the current and potential students and their parents and families about what we are doing to ensure that they continue to receive the high quality education they deserve, even during a period of crisis. I also want to try to address the vast majority of people in California who don't have a family member currently enrolled at UC, or at any of our colleges and universities. After all, 62 percent of California's 7.6 million households do not have children under the age of 18 living at home. I am here to tell you that the California public higher education system is of critical importance to all Californians, not just to those going to college.

Here is what I want to say to current students and their families and to those just applying to college:

• California and UC still offer quality educational experience. California colleges and universities continue to offer a first-class education to students. The master plan offers you a choice of fine institutions. The world-renowned excellence of our system provides a critical mass of talent and intellect.
• Students know all this: Despite the funding crisis, applications for undergraduate admission this year reached a record of more than 133,000 students.
• We're doing our best to keep UC affordable in dire circumstances.
• California higher education has not been free for a long time. But we've done a good job compared to other states in making it affordable to all income groups.
• One-third of UC students are eligible for Pell Grants, a remarkable proportion for a research university.

We're trying to mitigate the recent fee increases for our neediest students:

• We've raised income threshold on our Blue and Gold Opportunity Plan, meaning that students with family incomes under $70,000 who qualify for financial aid pay nothing in system wide fees.
• We've launched Project You Can, a $1 billion fundraising effort by our ten campuses that will go exclusively for student aid.

Now, to the vast majority of Californians who don't have a family member at UC (or the other segments), I'd like to take a moment to talk about why supporting California's higher education system is in your interest too. After all, according to the PPIC, only 16 percent of likely California voters have a student in a public university or college. It may seem reasonable to ask why our fate affects yours.

The economy and the quality of life of California are highly dependent on the vitality of our universities. Look at the biotech industry, at Silicon Valley. Many of these ideas and products and companies had their beginnings in our labs and classrooms.

Universities and community colleges are critical to job creation and job retraining. Our faculty and students make the discoveries and launch the companies that create new jobs and much of this state's wealth.

From water to agriculture to climate change, environmental technologies and K-12 education, our researchers are working on solutions to our most pressing state problems.

We are the state's healthcare leader — not only in terms of research and life-changing medical breakthroughs, but we are also a huge provider of patient care: 3.8 million outpatient visits last year alone — that's one in every 10 Californians.

If you think you will need a teacher or a doctor or a nurse or an architect or an engineer to make roads and bridges safe or to ensure safe food and water supplies, the condition of higher education in California matters to you.

And our great historians, writers, artists, social scientists and yes, even lawyers, train our industry and government leaders whose decisions impact everyone in the state, every day.

I have said this before in Sacramento: There are two approaches that a state can take to try to attract business. We can become a low-regulation, low-taxation state that attracts low wage jobs; or we can invest in education, in human capital, and be a state known for innovation and technology and for creating high-skill, high-wage jobs that grows talent at home and attracts it from afar. California has historically taken the second route and that is the one that will lead to a healthy California in the future.

Our perils are real, and they are immediate: Already, we have seen the first signs of brain drain, as our top talent is lured elsewhere and our own recruitment slows to a crawl. All our Nobel-prize winners have to do is pick up the phone, and anyone in the country will be glad to have them. Increasingly, this is also true for our talented young researchers.

I've mentioned the lack of capacity, overcrowded classrooms and the like.

At UC, we've built one campus in the last 40 years.

Lawmakers were able to save Cal Grants for this year, but their threatened loss next year means we may be unable to help the students who need it most. The public purpose of the UC will be completely compromised if we can't save Cal Grants — the promise is gone.

We've done much to shoulder our share of the crisis.

Access: While the headlines are focusing on the students being turned away, all the segments are taking tens of thousands of students for which we are receiving no state funds. At UC, we are still finding a place for every eligible student, but absent additional resources, we might not be able to honor that core master plan commitment of the
state.

We've actually increased the number of community college transfers we are taking. This year, more than 28,000 CCC students have applied to UC, a 20 percent increase over last year.

Accountability: I believe that we should be held accountable by parents, by our taxpayers, by our students, by the Legislature. We are producing an annual accountability report for the UC system, available to the public, which is used to measure performance against our objectives.

Commission on the Future: Within UC, Regents Chair Russ Gould and I have created a UC Commission on the Future to make recommendations for substantial changes, if necessary, aimed at improving how we do business in the future.

We are willing to take a long, hard look at our own practices. I have asked the commission to examine all possibilities — even questioning many of the current operating assumptions at UC and within the master plan. I expect sometime this spring that I will have recommendations from the commission that could help inform this committee's deliberations.

Appeal to stewardship:

California's prominence in higher education did not happen overnight. It took decades of careful planning and a sustained state investment over the years. However, what has taken decades to build can be dismantled in a few short years. It's all about competitiveness; it's all about talent. You have to earn your stripes every day.

In the spirit of the original master plan, I hope you ask the segments to work together on coming up with our own recommendations and suggestions for change and improvement.

The master plan is not so much a plan but a promise — to California, by California, for California. It has, to paraphrase Wallace Stegner, given us a society to match the scenery.

Our much-emulated system of higher education is one of this state's most precious resources. The leaders of the state understood that in 1960. Hopefully we can re-invigorate that vision for the next 50 years.