The news regarding the finances of the 'Golden State' has been anything but sunny of late. Like other state and national governments hit hard by the recent global economic recession, California has faced tremendous difficulties in balancing its operating budget. An impasse between Governor Arnold Schwarzenegger and the California state legislature in setting funding priorities and raising revenues delayed passage of its annual state budget in 2009. As a result the state government resorted to issuing IOUs to its creditors and initiated mandatory unpaid furloughs for state employees.

The state's highly acclaimed public higher education institutions were not immune to budget cuts. Over $1 billion was slashed from the University of California system, which sits atop California's three-tiered university education system, (which is described more fully below). University administrators, attempting to make do with less and perhaps fearing more cuts, have altered their admissions policies and raised tuition rates, prompting outcries from students and parents. The tuition increases also affect graduate students, because tuition costs are usually funded by training-grant programs, which support students only for their first year or two. Given most graduate students in the United States require more than 5 years to complete their PhD degree, the cost of supporting these students, including tuition, beyond that time must be borne by their mentors. Such concerns in the present financial climate might force graduate programs to decrease the number of students accepted despite increasing demand for places. At the same time, faculty members have faced pay cuts, as the universities slashed salary support by 10% or more. These changes have forced researchers to seek more of their salary from outside grant sources, not an easy task given the present grant-funding success rates.

This dire situation has many in California's system of higher education worried that it will affect the success of their institutions. Teach-ins and other student- and/or faculty-organized protests have begun to spring up on campuses throughout the state. Across California, school administrators are facing choices to increase class size, restrict course choices and limit teaching opportunities for non-tenured staff. In response, the California Faculty Association, which represents the faculty of the California State University (the middle tier of California's university system), issued a white paper in December 2009 that criticized its chancellor, Charles B. Reed, for not being a stronger advocate for their universities and their mission during budget debates among the executive and legislative branches of state government.

Yet the cost of California's higher education system is not cheap. The organization and mission of these state-supported colleges and universities was originally articulated in the “Master Plan for Higher Education in California,” which marks its 50th anniversary in 2010. This plan established the three-tiered system of 2-year community colleges, 4-year state universities and the doctorate-granting University of California system to offer opportunities for higher education to all high school graduates in the state. As originally conceived in the 1960, strict eligibility rules governed enrollment: students in the top eighth of their class could be admitted to the University of California system; those in the top third could be admitted to CSU schools; and all others were eligible to apply to state-supported community colleges. Although mechanisms for matriculation upward were also included in the original vision of this system, increasing enrollment, changing demographics and the need for remedial programs to assist students have placed severe strains on the system and the ability of students to transition between programs. The California Legislative Analyst's Office, a nonpartisan fiscal and policy advisory board, released a report on 28 January 2010 that assessed the present status of the master plan's goals and collective institutional abilities to achieve such goals (http://www.lao.ca.gov/reports/2010/edu/ed_coordination/ed_coordination_012810.aspx). In it, the office was highly critical of the lack of a strong independent regulatory and planning commission for post-secondary education and expressed the need for measurable accountability goals for the state system of colleges and universities. Many of its recommendations, based on successful models developed in other states, are sensible and should be seriously entertained and implemented by California's government.

California has also been vexed with legislative budget battles since the passage of Proposition 13 by voters in 1978. This amendment to the state constitution placed caps on real-estate property valuations and mandated any increases to state taxation rates or mechanisms to a two-thirds supermajority approval by both chambers of the state government. In effect, Proposition 13 hampers any new revenue generation by the state, because political stalemate in the California legislature dooms such measures, as seen with the 2009 budget debates. In contrast, voters in Oregon passed a referendum on 26 January 2010 to increase taxes on families with higher income and corporations to help close its budget gap of over $700 million, including funds for public education. Earlier in January, Governor Schwarzenegger proposed changes in the state allocation formulas that would decrease spending for prisons and increase spending for the state's public universities. However, it remains to be seen whether gridlock in the state legislature will block the enactment of such proposals.

Providing opportunities for high-quality education to its citizens is a laudable goal for any government and one that has repeatedly produced benefits and higher living standards. Voters and legislators across the state should recognize the value and necessity of training the skilled workforce needed to keep California competitive in the global economy. In short, you get what you pay for—now is not the time to be cheap.