This is flat out false. Most "public" university systems are only partially being supported by state funds, with the remainder coming from the students and other revenue sources:
http://www.acenet.edu/the-presidency...he-bottom.aspx
University of California system:
http://budget.universityofcalifornia.edu/?page_id=5
University of Virginia
http://www.washingtonpost.com/local/...9d0_story.html
University of Texas
http://giving.utexas.edu/why-give/wh...-your-support/
Now, the UT example is a little misleading, because the States share of the budget shrank, but the schools budget exploded in those 30 years. Not to belabor the point any further, but the idea that state schools are 100% state funded is just wrong.