The report offered ways to keep the state budget balanced while meeting the needs of a growing population over the next two decades. Currently, the state has an infrastructure of schools, roads, housing and water systems built to serve 25 million residents. Yet the population is expected to reach nearly 50 million in the next 20 years. Lockyer said one idea would be to stop public funding of the University of California, which would save $7 billion a year by 2027-28. This would require the university to set its own budget and raise revenue through student fees or fundraising. The report also suggested going after the $670 million a year lost in sales tax from Internet and mail-order transactions. It also suggested closing some tax breaks to construction and professional services, and increasing the top income tax rate by 1 percent to generate $4.5 billion a year.  The Sacramento Bee contributed to this story