State & CSU Budget Update


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AUHSD Budget Information Alliance for the CSU
California State Budget
CSULB Information

May 15, 2008

Dear CSULB Students, Faculty and Staff:


Yesterday afternoon Governor Schwarzenegger released his “May Revise” adjusted 2008-09 State Budget Proposal, which included an updated state revenue and expenditure projection.  As you probably know, in recent years the CSU has participated in a Higher Education Compact Agreement with the Governor that provided for annual budget increases for enrollment growth and mandatory cost increases.  For several years, this Compact brought much needed support and stability to our campus.  This past fall the CSU proposed to the Governor a budget plan consistent with this Compact that included increases necessary to provide for anticipated enrollment growth, mandatory fixed costs, and salary enhancements.  However, in January in response to a mounting state budget deficit, the Governor proposed “across the board” budget reductions approximating 10 percent for all State General Fund programs.  This prompted the CSU to initiate planning for a budget problem totaling $313 million ($386 million without a student fee increase), which included a state budget reduction of nearly $100 million and unfunded, but unavoidable, increases for health benefits, mandatory costs, and compensation of about $213 million.  Our campus, in turn, planned for a budget problem totaling $16 million, which represents a combination of the state budget reduction to CSULB of approximately $7.4 million and unfunded, but unavoidable, increases in health benefit costs, compensation, and mandatory costs of approximately $8.6 million.

On Wednesday the Governor revised his budget proposal, restoring $100 million to the CSU budget, but still not funding mandatory cost increases.  This is good news and we are very grateful that the Governor has recognized the importance of education as a state investment instead of simply viewing us as a state expenditure.  However, this action does not solve our entire budget problem.  The CSU must still deal with $213 million in unfunded mandatory costs which equate locally to an $8.6 million problem for CSULB.

In addition to not being a comprehensive solution, the Governor’s proposal is simply a recommendation and is subject to the actions of the Legislature, which is likely to make changes in the revised budget.  The Legislature may reduce the restored funding or it could choose to target some or all of any restored funding to a specific purpose.  Whatever is ultimately decided as a final budget by the Legislature is not expected to be completed until well into the fall semester.  Despite this fact, we applaud the Governor’s May revision and the restoration of funding for the CSU and our public education colleagues.  We now hope that the State Legislature will also work in the coming months to protect education and the CSU from the very harmful cuts.

Furthermore, on Wednesday the CSU Board of Trustees approved the $276 per year fee increase for CSU students.  We had long assumed that this fee increase would be enacted unless the State Legislature acted to buy out the $73 million student fee.  This has not occurred, so in order to provide appropriate planning and lead time for students prior to the fall semester, the new student fee resolution was presented and approved by the Board on Wednesday morning.  

This budget process is long from over.  We must respond to the Governor’s revised proposal optimistically, but with caution and prudence.  As is the long tradition on our campus, consultation will continue to play a key role in how resource decisions are made.  The Governor’s support of education as expressed in his revised proposal is most welcomed.  We deeply appreciate his recognition of higher education’s critical role in the future success of our great state.  However, there is still a strong sense among all of CSU’s constituent groups that for us to fulfill the challenge of sustaining California’s economy, restoring the remaining $213 million of the Higher Education Compact to the CSU is essential.  Therefore, the CSU Alliance will continue pushing hard to make even more progress in the months to come.

I will be sure to keep you informed as the process moves forward and any new budgetary information becomes available.  Your continued interest and support is greatly appreciated.

GO BEACH!

F. King Alexander
President, California State University, Long Beach