Testimony, State Higher Education Committees

October 7, 2005 | Speeches and Testimony

Testimony for Chancellor Matthew Goldstein
The City University of New York
New York State Senate and Assembly Public Hearing:
Future of Public University Systems
October 7, 2005

Good morning. Chairman LaValle and Chairman Canestrari, let me begin by thanking you and the members of the Senate and Assembly Standing Committees on Higher Education for your longtime support of The City University of New York-which was demonstrated most recently by the unprecedented capital program adopted by the legislature this past session. This is a major step forward in our ability to meet the needs of the students, faculty, staff, alumni, and members of the community who use the University’s facilities year-round, and I think it is an indication of the effective partnership we are forging on behalf of the state’s students.

I believe these hearings are another step in that partnership, and I am grateful that you have provided this forum for discussion. It allows us the opportunity to focus on the serious funding needs of CUNY and SUNY in a collaborative manner, so that public higher education can be enhanced on a bipartisan basis.

This is a critical time for a conversation about the future of public higher education, both at the state and the national level. Let me point to what I see as three overriding concerns.

First, across the country, the funding of public higher education has changed dramatically. Over the last several years, the proportion of institutions’ budgets covered by public funding has decreased, while the share covered by tuition has increased. Constrained state budgets and rapid enrollment growth-which are two common results of economic downturns-have depressed state funding across the country. Nationwide, between 1980 and 2000, the share of universities’ operating expenses paid for by state tax dollars was cut by 30 percent. Since 2001 alone, enrollments in public colleges and universities nationwide have increased by almost 12 percent, while state and local appropriations have remained essentially flat in that same period.

At CUNY, we have seen a decline in direct aid over the last couple of decades. Since 1990, state appropriations to the University have declined by almost 34 percent. Last year, state aid constituted just 45.9 percent of the University’s operating budget. The result, at CUNY and nationwide, is that public institutions are struggling to meet their operating costs, and students are bearing a greater share of that burden as we increasingly rely on tuition to meet operating expenses. This has enormous consequences for the future of public higher education, as demonstrated by the next two concerns.

Second, researchers and commentators across the country are taking note of the troubling divide between the haves and the have-nots: that is, those with a college degree and those without. That divide often splits across economic lines. As USA Today reported earlier this year, only about one in 17 young people from this country’s poorest families will earn a bachelor’s degree by age 24-but better than one in two from the wealthiest families will earn that degree. This divide has serious economic and social impacts. College graduates earn significantly more than high school graduates, and they are more likely to vote, do volunteer work, and become active in their communities. They can more readily respond to downturns and opportunities alike. Unless we take concrete steps toward better inclusivity, the promise of equal opportunity that has been a cornerstone of public higher education will erode. We simply must close this unconscionable gap.

Third, higher education is now a necessity in a demanding and fast-moving global economy, but the United States is failing to meet that need. In his book, The World Is Flat, Thomas Friedman tells an anecdote that perfectly illustrates how global connectedness and new technologies have changed economic competition. When he was a child, he says, his parents used to tell him to finish his dinner because people in China and India were starving. Today, he tells his children to finish their homework because people in China and India are starving for their jobs.

In both our state and our country, we need a workforce that is highly skilled and broadly educated, one that can move flexibly to anticipate opportunities and respond with originality. However, as our own State Board of Regents has noted, we are not keeping pace with that demand. The Board cites estimates that in 15 years, the country will not be able to fill 14 million of the most skilled, highest paying jobs because there won’t be enough qualified people. Just last month, the Associated Press reported that the United States is “losing ground in education,” dropping behind other nations in the share of adults ages 25 to 34 who hold a college degree.

Given these three factors-and, as we all know, they do not represent a comprehensive overview-it is clear that the need to strengthen support for public higher education is critical to our state’s competitiveness and its economic and social viability, as well as to our national standing in today’s global environment.

With your support, the University has been working diligently to address these issues, and we have made great strides in providing an accessible, challenging education to increasing numbers of students. Indeed, I am pleased to note that the Board of Regents’ Statewide Plan for Higher Education states, in referring to the continued transformation of the University, “The movement toward an integrated university continues to engender synergies unparalleled in an urban institution of CUNY’s size.” We have been able to redirect resources toward the hiring of almost 800 additional full-time faculty over the last eight years-an impressive number, but still below what is needed to achieve the appropriate full-time/part-time ratio. We have recorded our highest enrollment in three decades, as well as an increase in the number of high-achieving students attending the University; a slate of students receiving prestigious awards and scholarships; steady gains in our retention rates; and great success in our college preparation programs. It is largely through the tenacity and talent of our students-60 percent of whom come from families earning less than $30,000 a year, and seven of 10 of whom work full- or part-time-and through our faculty’s dedication and skill that such gains continue to be recorded.

But we can no longer afford to operate in the same way. Students cannot be asked to carry a continually increasing share of the operational costs of college. State aid must be increased in order to meet both mandatory expenses and programmatic priorities. Public higher education must be a public priority, as it is a public good. We must re-envision our partnership with the state in order to ensure that every student is encouraged and enabled to pursue a college degree.

I propose a new approach to funding for The City University of New York, one that focuses on a shared investment in the future, rather than on pieced responses to economic fluctuations. The state’s universities already plan extensively for the future, developing a Master Plan every four years to articulate plans for new faculty, academic initiatives, and student services. However, while CUNY and SUNY are required to adopt Master Plans, subject to the approval of the regents and forwarded to the governor, there is no funding to support the Master Plans.

As you know, the Board of Regents and the New York State Education Department produced a Statewide Plan for Higher Education, 2004-2012. In its September 2005 presentation, the State Education Department reviewed financial support for CUNY senior colleges for 1990-91 and 2003-04 (reported as revenues for full-time equivalent students). Please refer to the attached chart, which indicates that state appropriations per FTE student are down $5,188.

The comprehensive approach I am calling for is, at its core, a compact with the state to finance the University’s Master Plan. The investment of more than a half a billion dollars in the Master Plan would be shared by the state and the University over the four-year life of the plan:

  • On the public side, the state and the city would commit to funding all of the University’s mandated costs and a portion of the costs of its investment program.
  • On the University side, the University would commit to funding the balance of the investment program, through four components:
    1. An unprecedented commitment to philanthropic funding, in order to enhance the investment initiatives;
    2. Increased productivity and efficiency measures, so that the colleges are given tools to better manage their budgets;
    3. Targeted enrollment growth; and
    4. Modest tuition increases, not to exceed the Higher Education Price Index over the life of the plan. The increases would have two major differences from those we have seen in the past. First, the revenue from the increased tuition would go exclusively toward funding the CUNY investment plan, with recommendations from students and faculty, including elected representatives, about how the money should be invested. Second, the increases in the proposed plan would not be large or unexpected. The last four senior college tuition increases have averaged more than 31 percent. Under the proposed plan, the average increase over the next four years would be 2.5 percent. And, of course, those increases would go toward improvements in program quality.

I should note, too, that nine of 10 CUNY students who come from families with income levels under $50,000 and who currently receive state Tuition Assistance (TAP) awards will see no increase in tuition payments. Financial aid programs are particularly important to our consideration of public education funding. In order for parents and students to plan for the financing of a college education, student financial aid must be protected from the annual budget battles. The state’s public policies on student aid should include safeguards that take into account the years needed for students to graduate so that the available funds are assured and families can take the necessary steps to fill in the gaps.

This compact with the state would result in a gradual shift in the funding of our public university: over time, it would reduce the proportion of operational expenses covered by tuition and give students greater participation in determining the University’s investment toward the future.

Students and their families are well aware of economic realities. But in letters, e-mails, and conversations, they make one thing clear: they don’t think it’s fair to get saddled by large, unexpected increases, especially when they have no say in what the money is used for. And they are right about that. We owe it to the students of this state to plan for our future, and their future, efficiently.

The proposed financing plan also addresses our commitment to remain accessible to all students, to encourage them to pursue a college degree, and to let them know that the state believes that they are the best investment in the future. And they are. The competitive viability of the state and the nation depends on this educated workforce. It is thus an investment with very high returns.

Chairman LaValle, Chairman Canestrari, and members of the committees, your work on behalf of the state’s universities is recognized and deeply appreciated. The University values its partnership with the state, and we now have an opportunity to forge an even greater compact, one that positions us at the forefront of the nation’s educational future. As I said a few minutes ago, this is a critical time to confront that future, and I believe we can only do that through a courageous partnership. I look forward to continuing to work closely with each of you and the entire legislature, and in concert with Acting Chancellor Ryan, to build that compact with the students and citizens of this state.