SF State News {University Communications}

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Budget update from the Chancellor's Office

Note: The following e-mail was sent on 5/16/11 to all faculty and staff.


Dear colleague,

Following is a budget update from the Chancellor's Office, for your information.


--Robert A. Corrigan, president


CSU Will Face $1 Billion Cut Without Tax Extensions

The CSU will receive a $1 billion cut to its 2011-12 budget if Gov. Jerry Brown’s proposal to extend temporary taxes is rejected. Earlier this year, the legislature approved the governor’s January proposal for a $500 million reduction in state funding for the CSU. The governor’s May Revision of the state budget, presented today, maintains that funding level but also states that an additional reduction of $500 million will be necessary if the governor’s proposed tax extensions are not enacted.


The tax extensions depend on a bipartisan vote of the legislature and are subject to final approval by the state’s voters. Without these revenues, the governor has repeatedly stated that severe additional cuts to higher education and other programs will be needed to balance the budget.


CSU Chancellor Charles B. Reed said a $1 billion cut, which is 36 percent of the CSU’s budget, “would inflict lasting damages to the university. There will undoubtedly be severe and painful choices we would have to make to address such a massive funding reduction."


The CSU last week outlined a contingency plan to address a potential $1 billion in state support and said it would "wait list" applications for winter and spring 2012, estimating it could turn away 20,000 qualified applicants who would otherwise enroll for the winter/spring 2012 terms.


In addition, depending on the status of the state budget in July, the CSU Board of Trustees could be asked to take action at its July 12 meeting to authorize a contingent tuition fee increase of up to an additional 32 percent (on top of the 10 percent increase already approved for fall 2011). The amount of any increase would depend on the final outcome of the state budget. For full time undergraduates, a 32 percent hike would mean an increase of as much as $1,566 or a total of $6,450 in tuition fees per year.


In managing the approved $500 million cut, the CSU will enroll 10,000 fewer students this fall, apply an estimated $146 million in revenue from a tuition fee increase already approved, reduce campus budgets by $281 million, and cut the Chancellor's Office budget by nearly $11 million.


Since the state's fiscal crisis began in 2008-09, the CSU has reduced its employees by almost 9 percent and the Chancellor's office has reduced management personnel by 11 percent. Additional strategies to address decreased state funding have included employee furloughs, increased tuition fees, enrollment cuts and other cost cutting measures.


The CSU has also made strides to become more efficient. Federal data shows that 10 of the 20 most efficient large campuses in the country are CSU campuses, in terms of institutional spending per student. However, officials stress that the university system cannot address a $1 billion budget reduction in one year with efficiencies alone.


"Additional budget cuts to the California State University will only put the state further behind in its economic recovery," concluded Reed. "It is unrealistic to think that California will regain its Golden State stature without an educated workforce."


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