CHAPEL HILL - The state needs more highly educated, skilled workers than the state's higher education system can provide, according to a report today to the group setting a future course for the UNC system.

The UNC Tomorrow Commission heard a flurry of daunting statistics about the state's economic and demographic changes.

By 2014, North Carolina will need 400,000 new workers with bachelor's degrees. But the state's public and private colleges are expected to produce only 254,000 of these workers. Colleges would have to produce more than 15,000 more graduates each year to fill the gap.

"The sheer volume of that left me breathless," said Hannah Gage, a member of the UNC Board of Governors who serves on the commission.

One issue is educating the growing Latino population -- including some illegal immigrants. That will no doubt cause political controversy.

To exclude the Hispanic population from the university is criminal, said Priscilla Taylor, who also serves on the UNC board and the commission.

"Amen," responded Martin Lancaster, president of the community college system and member of the panel. "We can't refuse to educate a single person."

Jim Woodward, former chancellor of UNC-Charlotte, said the issue goes beyond politics.

"It's an economic imperative that we attract and serve these kids," Woodward said.

Starting next month, the commission will hold 11 regional meetings around North Carolina.

The purpose: listening to business leaders, community leaders and citizens about what the state needs from its higher education system.

The university system must produce more highly trained, successful students with writing and critical thinking skills, panel members said.

Universities in depressed regions must play a greater role in transforming the economy and creating new jobs, Lancaster said.

"In Greensboro, the community is going to demand that from the university," Lancaster said. "In northeastern North Carolina, it may have to be the other way around."

The commission, made up of educational, business and community members, will complete a report by the end of this year. Then, the university will create a response next spring.

UNC President Erskine Bowles said the group's work could mean significant changes for the university.

"I want to promise you your hard work will not sit on the shelf," Bowles said.