Stabilization of Future State Support. Most of the state financial resources available to public higher education, particularly for undergraduate education, are those that it already has in the over six billion dollar operating budget that represents the state's current, annual investment (in the 1995-96 fiscal year, $6.5 billion in state general funds and property taxes). California must maintain the purchasing power of this level of basic support as a precondition for accommodating current and projected enrollments. If, for instance, the state should disinvest in higher education, as it did in the early 1990s, it is unlikely that any plan for accommodating the enrollment increases projected for the next decade could succeed. If the RAND prediction is correct-if entitlements, federal and constitutional mandates and the cost of corrections force the state to reduce support of higher education below current levels-the shared responsibility approach will fail. There are, in the Center's estimation, no circumstances under which California can reduce its investment in higher education and expect enrollment increases that will preserve educational opportunity.

Support for Undergraduates. Beyond the current level of support for current enrollment levels, the state should also provide additional funds for each additional undergraduate student. However, this support should be based on the actual cost of educating each additional undergraduate student, which is significantly less expensive than including graduate students in the calculation. Further, the state share should be reduced due to the expectation of increased productivity at colleges and universities and due to an increase in the student contribution (through fees and better preparation, for instance). As a consequence, the rate of growth of state funding for additional students will be less than in the past.

Institutional Reallocation and Productivity. Under the concept of "shared responsibility," the public colleges and universities should be expected to focus their resources on the highest public priorities, to become more educationally and cost effective, to reallocate their base budgets as necessary, and to achieve academic and administrative efficiencies.

Student Preparation and Fees. Assurance of college admission for the next generation of students will require the state both to stabilize funding for the institutions and to support additional undergraduate enrollments. In return for such assurance, students should expect to bear a share of the cost of their education (see Strategy Four below) and to be better prepared for college (see Strategy Six below).

Do Not Build New Campuses; Give Priority to Maintenance and Renovation. The California Postsecondary Education Commission estimates that the capital costs of accommodating enrollment demand over the next ten years will be $4 billion, or $400 million per year, exclusive of any other capital needs.12 Based on the past practice of building new facilities for new students, this estimate is totally unrealistic for a future of scarce fiscal resources. In addition, existing campuses and buildings should be maintained and renovated. Under these circumstances, it makes little sense to embark on an era of new campus building. Plans for new campuses should be deferred for at least a decade. If the maintenance and renovation needs of existing campuses are met, if those facilities are more efficiently utilized, and if more effective use is made of the state's independent colleges and universities, the projected enrollment increases can be accommodated by existing campuses.

Classroom Use and Year-Round Operations. Making better use of student time and facilities will require greater classroom and laboratory use on public campuses during early mornings, evenings, weekends, as well as year-round study.

The public institutions and the California Postsecondary Education Commission currently estimate that most classrooms are occupied 35 to 45 hours per week.13 The capacity to accommodate Tidal Wave II enrollments can be significantly increased through more effective use of facilities. By offering courses in evenings and on weekends for at least 50 hours per week, the capacity for instruction would be substantially increased. Accommodating students in this manner is not without costs, but these costs are much less than the cost of building entirely new facilities.

Moving to year-round operations would further maximize the use of existing facilities. Currently, most summer sessions offer a minimum array of courses. In addition, most four-year public campuses do not receive a state subsidy, and therefore are at full cost to the student. Many institutions should offer a full undergraduate program during the summer, including high demand courses and requirements. The state should support student enrollment during the summer term, a cost that is included in shared responsibility projections.

In order to achieve the efficient use of facilities that will make it possible to accommodate of all qualified students, classes would be offered at less convenient times than in the past. Public colleges and universities should consider experimenting with financial incentives (e.g., tuition discounts) to encourage students to enroll in courses offered at the most inconvenient times. In addition, some institutions may wish to require students to attend at least one summer session to complete their programs.

Upper Division Courses at Community Colleges. Upper division courses leading to the baccalaureate could be offered on many community college campuses at great convenience to students and at savings of capital outlay dollars for new facilities at four-year institutions. State policy should encourage community colleges and four-year colleges, particularly the California State University, to collaborate in offering upper division courses through the bachelor's degree on selected community college campuses through electronic technology, shared faculty, or more conventional means when such offerings would be cost effective and would improve access.

Strengthening the Transfer Capacity of Community Colleges. As in the past, most Californians seeking higher education will attend the community colleges to acquire vocational skills or to prepare for transfer to a baccalaureate institution. Projections indicate that some 385,000 additional students will seek entry to the community colleges over the next ten years. This will place an enormous fiscal burden on that segment, particularly the need to expand transfer programs while maintaining and expanding programs that develop vocational skills.

To assist the community colleges in meeting the needs of transfer students without diminishing the role of vocational training, the state should provide $10 million annually as a supplementary appropriation, or $100 million over the next decade. This appropriation should not be allocated uniformly among the colleges or on any pro rata basis. Rather, the distribution of funds should recognize the burden imposed by differential growth rates among the colleges, and should also reward colleges for increasing their number of transfer students.

Student Fee Increases. Student fees should be adjusted annually. Increases in student fees should not exceed 6 percent of the prior year's student fees for the university, 5 percent at the state university and 4 percent at the community colleges. The differential limits reflect current income profiles of students in the three systems. This policy is designed to assure a student contribution to the preservation of opportunity, and to prevent dramatic fee increases in difficult budget years-for example, increases of more than 100 percent at the university and state university in the early 1990s. It is also intended to break the pattern in which some fees remain flat for four or five years only to increase dramatically over the next few years. Over the past twenty years, this pattern has meant that some student cohorts have the real cost of their education reduced each year they are in college, while the next cohorts face steep increases every year. The unpredictability of fee increases, as well as their size, were largely responsible for the enrollment declines in the early 1990s. Finally, the use of personal income growth as one basis of adjustments is intended to link increases to a measure of affordability, rather than to the state's fiscal circumstances or to the gap between institutional budget requests and state appropriations.

Student Financial Aid. The state should be responsible for meeting additional need for student financial assistance. In the recent past, most of this responsibility has fallen on students-many of whom were borrowing to pay their fees-who have, in effect, paid a surcharge on their student fees to support financial aid for other students. One consequence of this approach was that student aid given by the campuses from these surcharges increased 70 percent, nearly twice the growth of aid funded by the state.14

Program Review, Reallocation and Retention of Savings. For the state and all public campuses, constrained financial circumstances require new capacities for assessing the quality and priority of programs and activities, for eliminating redundant programs that cannot be justified, and for reallocating financial resources to the highest priority areas. Throughout most of the past three decades, neither the statewide systems nor the individual campuses have developed these capacities because the emphasis was primarily on acquiring new resources. Higher education will not be able to meet future needs for accessibility or quality if it views its current array of programs and activities as "locked in." Instead, the resources to support the priorities of the present and future must be derived by reallocation. Savings achieved by the elimination or consolidation of programs of lower quality or priority in all public higher education systems should be retained and reallocated by them.

University of California Graduate Programs. The University of California should adopt a strategy of "selective excellence" in graduate education. It should seek to maintain a limited number of the highest quality programs in every significant area of knowledge, including emerging areas. The university should not, however, maintain a comprehensive array of graduate programs at each campus. Every world-class program needs protection, not just from external critics, but from dilution by duplicative programs of lesser quality.15

Student Preparation Before and In College. If provided the opportunities, many students can begin taking college courses while in high school. In recent years the numbers of high school students successfully taking Advanced Placement examinations has significantly increased. When students take advantage of these opportunities, they accelerate their education, make better use of time, and reduce the cost of college. California high school students who intend to enter a four-year college or university should be encouraged to enroll concurrently in community college and high school, and to prepare for and take Advanced Placement courses. Colleges and universities could certify selected high school instructors to offer college-level courses for credit. And the potential of technology for delivering college courses to high school students who are ready for them should be aggressively explored. If these opportunities are widely available and students are encouraged to take advantage of them, we believe that by the year 2,000, 35 percent of first year freshmen in the state university and 45 percent of first-year freshmen at the university will have completed-in high school, in community college, by distance learning, or otherwise-one-half year of college work acceptable as credit for a bachelor's degree. By the year 2006, 60 percent of freshmen at CSU and 70 percent of freshmen at UC will have completed such work.

Availability of Required Courses. Public colleges and universities should guarantee full-time students that required courses will be available to permit students to graduate in four years. It may not be possible to offer classes at the most convenient times because of the need to make full use of facilities. Even if classes are available, public colleges and universities should provide more opportunities than at present for students to acquire credits for graduation by examination. If necessary courses are not available and students must spend additional time or take additional classes, the cost of additional classes should be assumed by the institution without charge to the student or the state.

Charge for accumulation of excess credits. A student fee surcharge should be paid by students who take units in excess of 10 percent of those required for graduation without reasonable academic justification.