When the Governor introduced the State Budget on January 10, California was facing a $14.5 billion deficit. The Governor’s Budget proposed many current year reductions, as well as a 10 percent across the board reduction in the budget year. Unlike other state programs that in addition to the 10 percent also were given addition reduction during a special session in February, higher education faced no proposed reductions in the current year.

In an attempt to close the deficit gap, the state additionally authorized the sale of the last $3.3 billion in Economic Recovery Bonds. As a result of all these efforts, the remaining deficit in the budget year is approximately $8 billion.

Given that this budget year for California has been anything but normal, on March 13, the Senate Budget Committee, in a departure from traditional practice, held a full committee hearing on the higher education budgets. Appearing before the committee were all three segments of higher education, as well as the Student Aid Commission. The hearing was designed to highlight the serious problems facing higher education as a result of the Governor’s proposed 10 percent reduction. For CSU, that reduction results in a funding gap of $386 million, only a portion of which can be covered by fee increases.

Richard West, Executive Vice Chancellor and Chief Financial Officer, testified on behalf of CSU. His remarks covered the work that CSU has been doing to increase participation of underrepresented students, to improve workforce preparation for critical areas in California, and how those efforts will be harmed by the proposed budget reductions. As a first step, CSU has closed applications for first-time freshmen at all campuses as of March 1, and will make efforts to reduce total enrollment by 10 thousand students to bring enrollment in line with funding. As expected, the committee took no action, but did ask many questions of all three segments.

The Assembly Budget Committee is hearing the budget in sub-committees, as is traditional. The sub-committee assigned to the CSU has met twice, on April 2 and April 9. At the first hearing, the system heads appeared to present an overview. Chancellor Reed covered much the same information as EVC West had covered for the Senate, and made a passionate case for CSU and its importance to the future of California’s workforce. At the second hearing, the sub-committee covered the issues again in more detail, but took no action. At this hearing, the public testimony included representatives from CFA, SETC, and many individual students telling their stories of the need for affordable education.

The next step in the budget process is the May Revision, which will be released by the Department of Finance on May 14. This new revenue and expenditure projection will be the starting point for the Legislature to finalize its actions on the budget in each house, prior to the Conference Committee which usually meets in the first part of June.