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Governor Proposes Additional Cuts to CSU — Beyond $410 Million
May 28th, 2009

(May 27, 2009) –In response to the latest revised budget proposal released by Gov. Schwarzenegger, CSU Chancellor Charles B. Reed said that further cuts would cause lasting damage to the institutions’ ability to serve students.

“Reductions of the magnitude being proposed are unprecedented and unfathomable,” said Reed.  “This will have permanent and devastating consequences on student access to our universities, and to the CSU’s ability to facilitate the state’s economic recovery and future prosperity.”

As part of his May 14 budget proposal, Gov Schwarzenegger included a reduction to the state’s General Fund support for the CSU that brought CSU’s cumulative cuts to $410 million for 2008-09 and 2009-10.  That is the equivalent of a 10 percent overall budget reduction, and a 15 percent reduction in the state’s General Fund support of the university system.  However, the state’s economy has continued to deteriorate with a projected budget shortfall for next fiscal year of $24.3 billion, and the Governor has proposed additional cuts to the CSU budget of as much as $375 million over the 2008-09 and 2009-10 fiscal years.

“We are facing an unprecedented financial crisis that will require us to take many difficult actions,” said Reed.  “We are looking at every available option, but know that they will be painful and severe.  We would urge the legislature to consider how these additional cuts will permanently impact the university system’s ability to provide access to future generations of students.”

Reed has previously announced that he plans to provide an action plan in consultation with the presidents and trustees by the middle of June.

CSU has already taken a number of cost cutting measures including a salary freeze for vice president/chancellor level positions; a hiring freeze on non-essential positions; cancellation of all non-critical equipment and supplies purchases and travel restrictions for employees.  In addition, for the first time in its history, CSU declared systemwide impaction to limit the number of new students entering in fall 2009, due to the state’s inability to fully fund enrollment growth and operational needs.

Overall, the CSU’s budget includes almost $2.7 billion in state General Fund and $1.5 billion in student fee revenue.

I highly encourage you to keep up with the CSU Student
Trustee facebook group as well as the Twitter (www.twitter.com/studenttrustee)
as posting updates on these issues will become available.

Jeff Weintraub

ASI President

The Governor released two May budget summaries, one if the measures pass, one if they fail. The official “May Revise” will be released on Thursday, May 28th.

California Student Aid Commission (CSAC) and California Post-Secondary Education Commission (CPEC) -The budget proposes to reorganize, consolidate and capitalize on State Assets. In relation to Higher Education this will include the consolidation of the California Postsecondary Education Commission and the Student Aid Commission. The consolidation of the two commissions will impact student representation on the CSAC’s Loan Advisory Councils, Financial Aid Advisory Committee and CPEC. (Source: California. Dept. of Finance.2009. 2009-10 May Revision General Fund Proposal: Reorganization, Consolidations and Capitalizing on State Assets. Sacramento, California. Dept. of Finance)

Cal Grant Program (total cut $87.2 million)– The Governors proposal eliminates new awards for the Competitive Cal Grant program ($52.9 million), Freezes income eligibility ($7 million), reduces awards for students attending private institutions from $9, 708 to $8,322 ($11 million), and partially decoupling award levels from UC and CSU fee increases ($16.6 million). (Source: California. Dept. of Finance.2009. 2009-10 May Revision General Fund Proposal: Program Savings. Sacramento, California. Dept. of Finance)

Funding for the University of California and for the California State University - The May revise would reduce both segments by $510 million each in the current year. The proposal states that the amount is anticipated to be offset with State Fiscal Stabilization Fund allocations based on the formulas prescribed in federal law, of which $537 million ($268.5 million each) was allocated in April. (Source: California. Dept. of Finance.2009. 2009-10 May Revision General Fund Proposal: Major New Proposals. Sacramento, California. Dept. of Finance)

Statement from the CSU Chancellor – The California budget deficit will “…result in a $410 million reduction to the CSU’s budget according to the governor’s May 14 revision of the state budget. These deep cuts will require us to consider drastic actions such as further enrollment reductions, layoffs, additional student fee increases and the potential closure of campuses. Even if the ballot measures pass, the CSU will likely face a $292 million budget reduction for the 2009-10 fiscal year.”

IN THE EVENT THAT PROPOSITIONS 1A, 1B, 1C, 1D AND 1E FAIL ON MAY 19TH, THE GOVERNOR PROPOSES ADDITIONAL CUTS.

Summary of cuts in relation to Higher Education:

$49.9 million – Eliminate UC and CSU Outreach – This move would eliminate $31.3 million for academic preparation and education programs at UC and 18.6 million for the CSU. (Source: California. Dept. of Finance.2009. 2009-10 May Revision General Fund Proposal: May Revision Contingency Proposals - Program Savings. Sacramento, California. Dept. of Finance)

$150 million- Unallocated Reduction to UC and CSU. This move would reduce funding by $100 million for the CSU and by $50 million for the UC. (Source: California. Dept. of Finance.2009. 2009-10 May Revision

To review the entire 2009-10 May Revision General Fund Proposals go to: www.dof.ca.gov

Several important propositions will be before California voters during a special election May 19. Propositions 1A through 1E seek to stabilize California’s current financial crisis and to implement long-term budget reform. The CSU Board of Trustees has endorsed a yes vote on Propositions 1A through 1E because of the direct impact the propositions will have on the CSU if they fail to pass. 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, including the pro and con arguments for the measures, is available at http://www.voterguide.sos.ca.gov/