Frequently Asked Questions About the CSU Budget
What is the CSU's budget outlook for 2004/05? Will student fees increase? What about financial aid? Can the CSU use Foundation or other non-state money to make up for the budget cuts? What are the next steps in the budget process? How will the CSU manage these cuts? Will the budget cuts force the CSU to implement layoffs in 2004-05? Will there be a Golden Handshake offered to CSU employees?
1. What is the CSU's budget outlook for 2004/05?	Top
For fiscal year 2004/05, Gov. Arnold Schwarzenegger has proposed cutting $240 million or 9 percent from the California State University system, potentially reducing student access by approximately 20,000 students. The proposed cut, together with the 2003-04 general fund budget cut of $531 million, brings the total two-year general fund cut to the CSU to $771 million, or a 28.8 percent reduction in student support. The governor's budget also forces the CSU to significantly reduce spending in university operations by keeping $57.4 million of 2004-05 mandatory cost increases unfunded. These costs include collective bargaining commitments, rate increases in health benefits and insurance, and energy costs increases. The CSU may be required to reduce enrollment by approximately 20,000 students. In addition, the governor's proposal recommends redirecting 10 percent or 4,200 of CSU first-time freshmen to the community colleges.
2. Will student fees increase?	Top
The Governor's budget proposes a 10 percent fee increase for undergraduate students, which would raise the State University Fee from $2,046 to $2,250 per year; a 40 percent increase for graduate fees, which would increase this fee from $2,256 to $3,156 per year; and a 20 percent fee increase for nonresident students, which would raise this fee from $8,460 to $10,170 per year. In addition, in his State of the State address, the governor called for a more stable fee policy for higher education. The CSU Board of Trustees has recommended for years the adoption of a predictable, stable fee policy and will discuss such a plan at its March board meeting. CSU officials, however, warned that steep fee increases at the graduate level could potentially discourage many CSU teacher candidates and those considering the profession from entering the field. This, in turn, could impact CSU's ability to produce the highly qualified teachers needed throughout California. All fee increases have to be approved by the CSU Board of Trustees.
3. What about financial aid?	Top
The Governor's proposed 2004/05 budget earmarks 20 percent of the fee increase for financial aid. This a reduction from the CSU Board of Trustee's policy of directing one-third of fee increases for financial aid. Trustees are expected to discuss this issue at their March board meeting. Complete information on applying for financial aid at the CSU is available here: http://www.csumentor.edu/FinAid/. Answers to frequently asked financial aid questions from the California Postsecondary Education Commission (CPEC) are available here: http://www.cpec.ca.gov/CollegeGuide/SearchGuide.asp. The deadline to apply for financial aid is March 2.
4. Can the CSU use Foundation or other non-state money to make up for the budget cuts?	Top
No. The state of California has an obligation and an ongoing commitment to fund the CSU support budget in the interest of meeting student access and providing a quality education for students admitted to the CSU. The CSU's General Fund budget, despite severe cuts, provides enrollment funding, student fee revenue, financial aid resources, and essential funding flexibility in an effort to maintain this ongoing commitment. External support received by the university through endowments, contracts, and grants are typically received in the form of restricted funds for specific campus-based or donor-sponsored activities. The CSU is not able to commit these funds to pay for annual recurring costs. Even if it could, it would not be wise, considering that the amount of external support that individual campuses receive varies from year to year.
5. What are the next steps in the budget process?	Top
The governor's proposal was followed by the release of a budget analysis by the Legislative Analyst's Office. Next will come several legislative budget hearings. In May, the governor will submit a revised budget, and after legislative approval, the governor is supposed to adopt a budget by July 1, 2004. The CSU will be working with the Governor's Office, the Department of Finance and legislators during the next several months to make this budget proposal work for CSU students and employees.
6. How will the CSU manage these cuts?	Top
The CSU and the 23 campus presidents have been planning for budget reductions for more than 18 months. Most recently, CSU Chancellor Reed asked his executive team to comply with the state's hiring freeze and asked that no new contracts for non-essential services or purchases of equipment be awarded. In addition, the Chancellor is asking all employees to defer expenditures for non-essential travel (such as seminars, conferences or training); reduce expenses related to meetings and closely monitor expenditures for supplies and services. In the following months the CSU will continue finding ways to use resources more efficiently so that it can focus on its mission of providing high quality, accessible education to students.
7. Will the budget cuts force the CSU to implement layoffs in 2004-05?	Top
The budget cuts may ultimately result in some reductions to staff, but the number and types of positions have not been determined at this point.
8. Will there be a Golden Handshake offered to CSU employees?	Top
A golden handshake (which gives retiring faculty additional years of service) was one of the issues included in the recent tentative agreement reached between the California Faculty Association and the CSU to extend the current contract until June 30, 2005. The contract is available here: http://www.calstate.edu/LaborRel/Contracts_HTML/CFA_CONTRACT/CFA_reopener_012704.pdf The CSU has not made any such arrangements with its other unions at this point.
Do you have a question about the budget we haven't covered here? Send it to budgetQA@calstate.edu for possible inclusion in an updated version of "Frequently Asked Questions About the CSU Budget".
Last updated: January 21, 2004