The Little Hoover Commission, the state’s independent oversight agency, spent more than 12 months and nearly 75 pages on a new report identifying the shortcomings in California’s higher education system and calling for a new strategy to develop the highly educated workforce needed to grow and sustain our economy.

Few will argue with the commission’s conclusion that California’s higher education system is not working as it should – or that the state needs a new strategy to repair this vital economic engine. But no engine can run on fumes. And that is what the commission is suggesting with its failure to recommend new funding for our financially strapped public colleges and universities.

As the Little Hoover Commission itself points out, slashes in spending have meant higher education enrollments could not keep pace with population growth. California community colleges have turned away more than 600,000 students in recent years.

Students can’t get the classes they need to graduate because of cutbacks in course offerings. And community college students can no longer count on the state’s promise that they can transfer to a University of California (UC) or California State University (CSU) if they complete their requirements.

The future for the entire state is troubling. A system that was the envy of the world can’t meet California’s needs for a trained workforce. By 2025, the state will need 2.3 million more graduates with degrees, certificates and diplomas than it is on track to produce today. To reach that goal, California’s public colleges and universities will need to produce 40% more graduates each year than they do today.

We need only follow the money to understand how we arrived at this point. General fund spending for the UCs has been cut in half, dropping from about $20,000 per student in the early 1970s to less than $10,000 in 2011-12. The decline for California State University (CSU) students is equally precipitous, falling from nearly $11,000 per student in 1998-99 to $6,500 in 2011-12.

To their credit, Gov. Brown and the Legislature have begun to reverse these losses. They increased general fund revenues for higher education by 5 percent. But that will net only about a 2.5% increase overall because general fund revenues only pay about half the cost of educating UC and CSU students. Tuition and fees pay the other half, and they were frozen.

While the increases are appreciated, they’re not enough to allow UC and CSU to take the necessary steps to turn around the decline in course offerings, enrollments and hiring.

As co-chairs of the California Coalition for Public Higher Education and graduates of the state’s public higher education system, we recommend the governor and Legislature invest an additional $250 million each in California’s Community College, California State University and University of California systems.

This still won’t make up for all their losses. The 2011-12 state budget slashed $1.5 billion from the UCs and the CSUs general fund revenues. This year’s increase won’t make up for those losses either. Even with the $750 million we recommend for the state’s higher education system, the UCs and CSUs will still be below their previous funding levels.

With an economic recovery well underway, the Legislative Analyst’s Office is predicting $3 billion more in tax revenues than the governor proposed in his budget. This will give the state the revenues it needs to boost higher education funding and still achieve the governor’s goal of setting aside a “rainy day” budget reserve.

Public universities and colleges can also innovate and save. They’ve already adopted many cost-saving measures, including limiting salaries and administration and eliminating non-essential programs. The Little Hoover Commission called for more accountability and efficiencies – and those can certainly be achieved.

It also proposed incentives to encourage the development of online courses to clear the logjam in the basic courses needed for graduation. This is a laudable recommendation, although the early tests of online courses show they are certainly not a panacea.

Without a much-needed infusion of new funding, the state’s public colleges and universities may be forced to turn to other revenue sources that reduce – rather than increase—Californians’ access to higher education.

Already, UCLA announced last year that the Anderson School of Business would take its prestigious MBA program private, ending its reliance on public funding and substituting private contributions and higher tuition.

The future for our students and our state’s economy depends on the investments we make today in our higher education system. We can improve graduation rates, keep California’s brightest students here and restore the state’s promise of an affordable and accessible college education. By refueling this vital economic engine, we can ensure we will have the workforce we need for job growth and a more prosperous state.

Dick Ackerman and Mel Levine co-chair the California Coalition for Public Higher Education. Ackerman is a former California State Senator and Assemblyman, and Levine is a former U.S. Congressman and State Assemblyman.

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Cross-posted at Sacramento Bee.