The following information and updates occurred during the 2008-09 budget year.
CSUB President Horace Mitchell held a budget forum for staff and faculty on June 15 to provide information regarding the impact of the state's budget on CSU and CSUB. The CSU is currently planning for a reduction of $583 million in 2009-10. Locally, that means a $13.2 million reduction at CSUB. The president emphasized these numbers are for planning purposes and much is yet to be determined. The agenda for the budget forum included the current budget problem, CSU priorities, potential solutions, processes and timelines, enrollment, and the campus consultation processes. The PowerPoint presentation is available here:
The CSU is facing one of the greatest challenges in its history. Governor Schwarzenegger has proposed a series of budget reductions to the system as part of his effort to address the state's estimated $24.3 billion deficit. The latest budget proposal would reduce CSU's budget as much as $785 million over a two-year period.
The CSU system and CSUB will be forced to make very hard decisions, and there will be no good options. CSU Chancellor Reed has indicated his intent to develop an action plan in consultation with the campus presidents and the CSU board of trustees by the middle of June with two goals: continue to serve students and protect as many jobs as possible.
Additionally, CSU has asked the legislature to consider
- finalizing reductions quickly. The longer we wait the harder these cuts will be on students, faculty and staff.
- granting flexibility by making cuts "unallocated," which would allow the system and campuses greater flexibility to meet local needs; and
- approving the CSU capital outlay budget proposed by the governor for lease-revenue bonds for the CSU projects, which in turn will create nearly 3,500 jobs during the current economic crisis.
With voters rejecting five propositions aimed at reforming California's budget, the CSU will face a $410 million cut to its 2009-10 budget that will impact its ability to serve students and maintain its operations. Propositions 1A-1E were created to provide new revenues to help balance the state's General Fund budget over the next several years. Their defeat by voters in the May 19 special election means the state will now face a revenue shortfall of $21.3 billion, a gap which Gov. Schwarzenegger has proposed closing through a variety of cuts and other actions.
"A $410 million reduction will severely impact our ability to provide student access to our universities, maintain our work force, preserve services, and protect the quality of our institutions," said CSU Chancellor Charles B. Reed. "These are all hard decisions and there are no good options. I will be meeting with the campus presidents to address these fiscal issues and to develop a plan of action in consultation with our Board of Trustees."
The CSU has implemented several cost-savings measures including a salary freeze for vice presidents and above, a hiring freeze, and travel and purchasing restrictions. In addition, the CSU took steps to limit the number of new students admitted in fall 2009 based on the state's inability to fund enrollment growth and the CSU's operational needs. The CSU's budget is approximately $4.2 billion, with $2.7 billion from state General Funds and $1.5 billion in student fee revenue. The proposed $410 million reduction represents a 15 percent cut in General Fund support.
CSUB President Horace Mitchell held budget forums for staff and faculty on April 2 to provide information regarding the impact of the state's budget on the CSUB budget. Topics included the current budget, the 2009-10 budget, federal stimulus and additional reductions for 2009-10, May 19 ballot measures, enrollment, and preliminary campus planning. The PowerPoint presentation is available here:
- CSUB Budget Forum Presentation
- CSUB Budget Forum Video - For Faculty
- CSUB Budget Forum Video - For Staff
Additionally, the following three spreadsheets were referenced:
One month after state lawmakers passed a budget, the Legislative Analyst's Office predicts that the budget is already $8 billion short due to the state's deteriorating economy. The shortfall may grow in future years—from $12.6 billion in 2010-11 to $26 billion in 2013-14—because many of the solutions adopted in the budget are temporary.
Overall, the fiscal impact to the CSU over the last two years is $600 million in cost obligations or basic workload needs that the state has been unable to fund. This includes funding for enrollment growth, faculty and staff compensation increases, and CSU's operational needs. The shortfalls come at a time when the CSU is seeing large spikes in applications because record numbers of students are graduating from California high schools and laid off workers are looking to retrain.
The CSU Board of Trustees have endorsed five of the propositions that will come before voters in a May 19 special election. Recognizing the state's unprecedented fiscal crisis, the trustees agreed to support Propositions 1A through 1E saying the measures will help solve the state's critical budget problems. Most of the measures provide new revenues to help balance the state's General Fund budget over the next several years. This directly impacts the CSU as two-thirds of its budget comes from the state General Fund. More information is available on the state's elections website: [Link]http://www.voterguide.sos.ca.gov/.
On February 20, Gov. Arnold Schwarzenegger and state legislators reached a long-sought agreement on a state budget that contains a mix of tax increases and spending cuts aimed at closing the state's estimated $42 billion budget deficit. The budget is a 17-month plan that addresses the remaining months of the current 2008-09 fiscal year and the 2009-10 fiscal year which begins July 1. Here is what the budget means for the CSU:
- The budget reduces state general fund support to the CSU by $97.6 million for the current 2008-09 fiscal year, placing the CSU $313 million below its operational needs.
- The budget falls short of operational needs for the 2009-10 fiscal year by $283 million. These cuts could grow by an additional $50 million depending on the size and scope of the economic stimulus package.
- The Legislature will discuss in upcoming budget subcommittee hearings the following CSU-related proposals that were not included in the enacted budget:
- $325 million proposed from lease-revenue bonds for six capital outlay projects;
- $3.6 million for a new cohort of 340 bachelor of science in nursing students.
Although the severity of the state's fiscal crisis required difficult decisions by the legislature, the budget will negatively impact CSU's ability to maintain quality and services for its 450,000 students. CSU is currently serving 10,000 students for whom the state provides no funding and has been forced to reduce enrollment levels by 10,000 this coming fall. CSU has also implemented several cost saving measures including freezing salaries for employees at the vice president level and above, restricting travel, deferring purchases, and holding vacant positions.
The CSU is exempt from the furlough orders now in effect for state agencies and is not planning furloughs at this time, but will continue to closely monitor its risk to further budget cuts as the details of the economic stimulus plan are analyzed.
On December 31, the governor released a summary of his 2009-10 budget proposal. This early notification, made in advance of the formal budget release in January, underscored the urgent nature of the state's economic downturn and the necessity of immediate action by the governor and the legislature to shore up the state's finances to maintain statewide operations. The state faces a staggering budget shortfall between now and the end of 2009-10 of almost $42 billion unless the governor and the legislature take rapid corrective action.
The CSU has taken actions to reduce costs while doing everything possible to protect students, faculty and staff and to preserve the quality of our universities. These actions have included steps to limit the number of new students admitted in fall 2009 based on the state's inability to fully fund enrollment growth and CSU's operational needs. The chancellor has also instituted mandatory travel restrictions for employees; the cancellation of all non-critical equipment and supply purchases; and a hiring freeze on all positions except those essential to the operation of the university.
In addition, salaries have been frozen for all vice president level positions and above including presidents' and vice chancellors' salaries and the CSU chancellor.
The CSU has also been forced to suspend and shut down state-funded design and construction projects on all of our campuses in response to the state's freezing of $600 million in general- obligation and lease revenue bonds used to finance these projects. Unfortunately, hundreds of projects will be affected including libraries, performing arts centers, classrooms, administration buildings, seismic upgrades, laboratories and more
The 2008-09 Budget Act provides the same level of state funding for the CSU as it received in 2007-08, which is $215 million less than its operational needs. This means no funding was provided for enrollment growth or increased operational costs.
In addition, Gov. Schwarzenegger has proposed reducing the CSU's current year budget by $97.6 million, which includes an earlier requested $31.3 million one-time reduction. These cuts come as the state tries to close an estimated $11.2 billion deficit.
Because of the deteriorating state budget, for the first time in CSU's history, a systemwide impaction has been declared. Simply put, impaction means that the CSU has more fully eligible applicants than it is able to support with its current funding. It is estimated that the CSU is currently providing access to 10,000 students for whom it receives no state funding. Declaring system-wide impaction will require CSU campuses to manage student enrollment down to the level for which it receives funding by applying additional admissions criteria.
At CSU Bakersfield, the systemwide declaration will have little impact. We will not be reducing the number of students on our campus. In fact, we can accommodate a small growth in enrollment. We will continue to admit all eligible first-time freshmen and qualified upper division transfer students. We will continue to accept applications for first-time freshman through March 1, 2009.
However, like all CSU campuses, we cannot admit more students than the state has funded. We must be able to provide adequate classes, instruction, support services and facilities. The quality of our educational program and experience for students is paramount. CSUB will still continue to admit all eligible first-time freshmen and qualified transfer students.
The information below summarizes the ongoing budget activity and its impact on the CSU and CSUB.
Thanks to the sustained efforts of CSU supporters, state funding for the system and its 23 campuses was held at 2007-08 budget levels. While this may appear to indicate no forward progress in meeting the 21st century challenges confronting the nation's largest institution for baccalaureate and master's degree education, achieving a statewide commitment to reverse $97.6 million of previously recommended cuts to the CSU budget represents a key accomplishment in an extremely weak and hostile fiscal environment.
While welcome under the circumstances, the approved state budget still places major funding challenges upon CSU. State funding for the university's budget remains flat between fiscal years, even though the Governor's workload budget identifies additional needs of roughly $215 million, given our mandatory costs, enrollment growth and compensation lags for our employees.
For more information about the budget and its impact on the CSU: