Chancellor James B. Milliken

Chancellor James B. Milliken

Appointed to start on June 1, 2014, James B. Milliken serves as Chancellor of The City University of New York. »

Citizens Budget Commission: “A Conversation on the Future of Public Universities”

February 9, 2011 | Speeches and Testimony

You may have seen an attention-grabbing headline last month: “Illinois Legislators Approve 66% Tax Increase.”  If you did, you may have looked twice to make sure it said “Illinois.” 

The jump in the state’s income tax rate—from 3 percent to 5 percent (and 4.8 to 7 percent for corporate taxes)—reflects Illinois’s profound financial crisis: a budget deficit of $15 billion, and $8 billion in unpaid bills.

And Illinois is not alone.  Nationwide, our states are in serious financial trouble. 

And that means, among other things, that our country’s public higher education system is facing its own crisis. 

Across the country and here in New York, state support for public universities has been declining for the last two decades, as other interests demand more state dollars.  A recent study indicates that since 2008, at least 43 states have cut assistance to public colleges and universities and/or made large increases in tuition.  Just last week, Governor Cuomo proposed a 10 percent cut to CUNY, bringing the total reductions to the University’s operating budget since 2009 to more than $350 million—almost 14 percent of our proposed funding level for the coming year.

I have spoken before about the importance of addressing these challenges through the CUNY Compact model.  The compact emphasizes a rational tuition policy, one that calls for modest, predictable increases, and a shared partnership between government and the university—with government covering mandatory costs and the university becoming more entrepreneurial in generating revenue streams, through philanthropy, efficiencies, and public-private partnerships.

But looking ahead, the outlook for state governments remains grim.  A December Times article pointed out that “[m]any state and local governments have so much debt—several trillion dollars’ worth, with much of it off the books and hidden from view—that it could overwhelm them in the next few years.”   Financial analysts worry most about the long-term problems of a handful of states, including California, New Jersey—and New York.  As the Times article said, “New York balanced its budget this year by shortchanging its pension fund” and “delayed payments to vendors and local governments.”  In California and New Jersey, not even an Illinois-sized jump in income tax would cover the budget deficits.  There has even been talk about state bankruptcy as a solution, made possible through changes in federal or state laws.  But when I think of the large debt burdens that many states are facing, I am reminded that in New York, bonds are issued through thousands of entities.  Bankruptcy, whether or not a viable option, would pose many legal and financial challenges.

The result is that across the country, as funding decreases and tuition rises, public higher education is in crisis mode.  And let’s not forget that the vast majority of college students—nearly 80 percent—attend public institutions. 

I would suggest that we are at a national turning point, one that prompts serious questions about the future competitiveness of our country.  As states cut support for public higher education, they effectively consume their seed corn—their surest investment in the future.  Economics journalist David Leonhardt has been unequivocal about the role of education in our country, which he calls “the lifeblood of economic growth.”  As he says, “[Education] helps a society leverage every other investment it makes, be it in medicine, transportation, or alternative energy.  Education—educating more people and educating them better—appears to be the best single bet that a society can make.”

Budgets are about setting priorities.  Every budgetary shift away from higher education is a statement about the value we place on our future.  That’s never been more true than today, a time when we need more college graduates, educated to higher levels. As Harvard researchers Claudia Goldin and Lawrence Katz have pointed out, “Workers now have to read complicated documents, master blueprints, work computers, solve formulas, and use the Internet, among other tasks….To be a full-fledged member of the global economy requires higher levels of education for most workers.”

The United States, unfortunately, is losing ground. 

Goldin and Katz have shown that in the first three quarters of the 20th century, educational attainment in this country increased nonstop.  This was also, not surprisingly, a time of great economic growth.  But in the last quarter century, educational attainment has slowed considerably.

In fact, over the last three decades, the eight-year completion rate among college goers has fallen from 51 percent to 45 percent.  Among those who do receive degrees, the percent earning them within four years has also dropped, from 57 percent to 44 percent.

At the same time, other countries have made considerable educational gains.  According to the OECD [Organization for Economic Cooperation and Development], in 1995, the United States’ four-year college graduation rate was about 33 percent—well above the OECD average of 20 percent and the European Union (EU) average of about 18 percent.  But even though the U.S. graduation rate increased between 1995 and 2008, it did so at a much slower rate than those of the OECD and EU nations.  By 2008, the United States’ four-year college graduation rate of about 37 percent was slightly below the OECD and EU averages, which were about 38 percent.  In other words, in less than 15 years, we have already lost ground compared to other nations.

This is nothing less a national security issue. The United States is losing its competitive edge.  It is simply not educating enough of its citizens to the levels needed in a knowledge economy. 

There is no question that educating our citizenry is fundamental to advancing our personal and professional goals and keeping our country vibrant.  Better-educated people live longer, are healthier, earn more, have better job security, and are more civically engaged.  And our society is likewise enriched by the millions of engineers, nurses, teachers, entrepreneurs, and so many others who discover the brilliant ideas, solve the difficult problems, invent the new devices, and conceive of the new industries.

This isn’t just talk.  This isn’t just a hope.  This is what we do at CUNY every day, and why we are one of the single most important engines moving our city and state forward.

Every university will talk about its role in economic development.  But at CUNY, “workforce development” and “job creation” are not platitudes.  At the University, we recognized long ago that we needed to be active participants in shaping the labor market and preparing and credentialing New Yorkers—not only to improve the lives of our students, who are the current and future workers, but also to improve the quality of jobs and services provided to and by New Yorkers.  We’re not just building the workforce; we’re building a better workforce.  And we’re not just creating new jobs; we’re creating quality jobs.

That means working in a dynamic way with business, industry, and government.  We have built a nimble, entrepreneurial mechanism that is a true force in the New York labor market—generating everything from highly specialized research careers to entry-level jobs. 

For example, over the last decade alone, research funding at the University has tripled.  We are home to world-class researchers and to new entities like the CUNY Energy Institute at City College.  The institute was created in 2008 is developing advanced technologies to reduce oil imports and increase the efficiency and use of domestic energy resources.  Over the last two years alone, the institute has raised nearly $20 million in funding, supported 30 doctoral students, and created 20 knowledge-based jobs in New York.  Technology developed by the institute will lead to several commercial enterprises that will result in many more jobs.  Two enterprises are already in the planning stages.

At the same time, we have also implemented a “green buildings” initiative to train workers for entry-level jobs and career advancement opportunities.  For example, a “Green Maintenance for Buildings” program, with funding from the Robin Hood Foundation, provides training for entry-level positions in building operations with an emphasis on energy efficiency.   Every one of the program’s first 39 graduates has received at least one job interview.  In addition, Local 32BJ asked CUNY to help with its “1,000 Green Supers Program” by training union members to make buildings more energy efficient. 

The University has taken this kind of comprehensive approach in other fields.  Take, for example, the health care sector, which represents about 11 percent of all jobs in New York City.  CUNY’s responsibility is to prepare a sufficient number of qualified personnel to meet the health-care needs of the city’s residents.  That means approaching health care from every angle.

  • For example, the University has created a new School of Public Health to train highly skilled practitioners and researchers in urban health issues like asthma and diabetes.
  • We have developed a longstanding collaboration with the largest health care union in New York City, enabling more than 6,000 union members to enroll in CUNY programs every year.
  • And CUNY has graduated nearly 12,000 associate- and baccalaureate-level nurses over the last 12 years.

In other areas, such as small business development, the University is helping to create future jobs.  At CUNY’s Baruch College, the Field Center for Entrepreneurship, which began as a lab to help city residents start businesses, has served 10,000 clients, secured more than $83 million in debt and equity financing, and helped save more than 1,700 jobs and helped create another 2,200 jobs. 

Local small business entrepreneurs are also getting a boost from CUNY’s LaGuardia Community College, which was the first education partner selected for Goldman Sachs’10,000 Small Businesses Initiative.  LaGuardia already has a robust business services component, including an active New York State Small Business Development Center, one of six at CUNY campuses.  LaGuardia’s pilot project with Goldman was initiated last year and offers a 20-week program to help small business owners develop growth plans.  Participating businesses in the first cohort have already hired an additional 63 people and garnered more than $2 million in contracts.

And I would be remiss if I didn’t mention CUNY’s many connections to the arts in New York City, from its education of writers, musicians, performers, and so many other artists to the full calendar of cultural programs and events offered at our 23 institutions.  New York City is dependent on its creative class for its very development—both economic and cultural development.  CUNY faculty, alumni, programs, and performances contribute significantly to our tourism industry and enhance our quality of life through a never-ending supply of art, music, theater, poetry, opera, dance, film, and literary events and exhibitions. 

Name any other sector important to New York, and we are creating the jobs, workers, and innovative practices that sustain it: hospitality, media, finance, information technology, and many more. CUNY is an unparalleled force in New York’s labor market. 

But that essential role will surely be compromised by the continued decline of public support for public universities.

New York’s best economic policy is to have an educated citizenry: the entrepreneurs and change agents, the talented and innovative workforce, the public servants.  States across the country are looking for an answer—some catalytic event, a game changer—to spark economic growth.  But their economic stimulus is already here: it’s our public universities, “the lifeblood of economic growth.”  Supporting their work is the best investment in the future that New York can make.

Thank you.