Three of the state's leading higher education officials gathered Tuesday to elaborate on what they've known for months: Major financial woes face the University of California, and won't be leaving any time soon.

UC President Mark Yudof came to UC Berkeley to join Chancellor Robert Birgeneau and Christopher Edley, Jr., dean of Boalt Hall School of Law, in a panel discussion of the obstacles the UC system faces in continuing to provide high-quality public education on an increasingly thin budget.

With the university losing millions of dollars in recent months and bracing to lose millions more, Yudof told the nearly 50 scholars and officials in Pauley Ballroom, "Higher education is not treated as a public good anymore."

As the nation's leading public university, UC Berkeley is under unique pressure to compete with Harvard University and other private institutions that do not rely on state funding and boast considerably larger endowments, Birgeneau said.

Harvard's endowment has severely declined since midyear, when it stood at $36.9 billion. But it still dwarfs that of UC Berkeley, which was $2.9 billion as of mid-November.

And while 85 percent of UC Berkeley undergraduates come from within California, administrators have said that the number of out-of-state students rose this year and will likely increase next year to reach a higher tuition target. Other state universities, such as the University of Michigan, have long admitted large numbers of outside students.

"The trade-off, frankly and harshly, is between poor in-state students and wealthy out-of-state students," Birgeneau said.

The drop in state funding that has plagued the UC system is likely to plunge even further, exacerbated by the nationwide recession. Gov. Arnold Schwarzenegger, who last month proposed cutting $65.5 million from the university, declared a fiscal emergency in California on Monday.

Outside the panel discussion last night, more than 30 UC service workers marched around the Martin Luther King, Jr. Student Union building, calling for higher wages.

"The protesters out front should be paid more," Yudof said, adding that the university now spends 40 percent less per student than it did in 1990. "How do you pay for them with 40 percent less?"

Yudof, who was sworn in as president of the UC system this summer, proposed that the federal government support public universities by building infrastructure, such as classrooms, laboratories and buildings. Not only would development projects enhance campuses, he said, but they would also create jobs.

Looking beyond the UC system, Edley said he perceives public education throughout the state as "broken" overall.

"The vast majority of students leave without having achieved a certificate, much less a degree," he said.

Edley served as an adviser to Barack Obama during his campaign and is now on the president-elect's transition advisory board.

Dan Farber, a professor at Boalt Hall School of Law, said that he left last night's panel discussion impressed-but worried for the future of higher education in California.

"It's remarkable that the campus and UC have managed to maintain their quality while being starved to death," he said.

Tags: STATE BUDGET, MARK YUDOF, CHANCELLOR ROBERT BIRGENEAU