Gov. Arnold Schwarzenegger and state legislators reached a long-sought agreement on a state budget in late February that contains a mix of tax increases, spending cuts, borrowing and federal stimulus revenue assumptions 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. The 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.