We present findings from a case study on California’s higher education sector that explores the relationships between public policy, state contexts, and higher education performance over the past two decades (2000–2020). Through the collection of primary and secondary data, including interviews with 16 policymakers, education policy leaders, and researchers inside and outside of California, we document the development, manifestation, and implications of three primary faultlines: (a) Persistent disparities by race, socioeconomic status, and geography that combine to sharply limit individual educational and economic opportunity for many within the state. Any measure of performance in higher education must address how higher education closes these disparities relative to the magnitude of the disparities in the population. (b) Fragmentation, or the policy-related phenomena and structures that contribute to a lack of alignment and synchronicity in the statewide approach to postsecondary education. (c) Volatility, or extreme variations and unpredictability in state and local funding for higher education, with impacts that extend into institutional resource allocations and family budgets. Our case study documents a need for sustained state policy leadership in higher education or sustained public stewardship of higher education. Year-over-year, session-by-session, and sector-by-sector agreements fall short in addressing the deep faultlines outlined in this report. We make several recommendations for how public policy can begin to address these issues and better meet the needs of the state’s populous.