Campus: CSU Office of the Chancellor -- October 22, 2001
CSU Trustees Approve Budget with Cautious Eye to Future
A skidding state economy and events of September 11 have combined to cause the California State University Board of Trustees to approve a 2002/03 budget request today with a 9.4 percent increase to support thousands of additional students but with the recognition that they will have serious discussions in the coming months about the reality of future state funding.
"We've gone from a mild recession to a severely under-performing state economy," said CSU Chancellor Charles B. Reed. "As we structure this budget, we have to keep our eye on quality and access; those two items are non-negotiable at the California State University."
The trustees' somber discussion of the state's budget picture – estimates currently go as high as a $14 billion deficit – cast a gloom over the fact that the CSU is serving more students than ever – an estimated 313,000 full-time equivalent students are currently enrolled, which includes 7,700 more than expected and who are unfunded in this year's budget. The demand will be even higher next year.
"The whole CSU family has to come together to get through this downturn, which will be deep," Reed said. "The next 24 to 36 months will be hard on everybody."
The budget approved by the trustees will now be forwarded to the Department of Finance for inclusion in the governor's budget that is released in January. Between now and January, CSU administrators will be meeting with Finance officials to make the case for the state fully funding the Partnership Agreement that has been in place the past seven years. That agreement includes a 4 percent increase in the General fund base; 1 percent increase for long-term budget needs; and full funding of enrollment growth, estimated to be 4 percent next year (12,030 new full-time equivalent students). Trustees also are asking for a 4 percent salary increase for its 42,000 faculty and staff, which would total $89.5 million.
The trustees' budget proposal calls for a $245.4 million General Fund increase, plus $23 million in fee revenue from new students, which would be a total 9.4 percent increase of $269 million. That increase would raise the CSU base budget to $3.7 billion in 2002/03.
"It is important for the CSU to submit a full partnership level budget to provide access and expand services to students," said Richard West, executive vice chancellor and chief financial officer. "We are not now proposing a student fee increase." The current State University Fee for a full-time student is $1,428 annually, plus another estimated $400 in campus fees. CSU's fees are among the lowest in the country.
Trustees will discuss the budget again at their November 13-14 meeting in Long Beach.
"We need to start early and be sensible in our planning," said Trustee Tony Vitti. "Quality and access need to be stressed."
Trustee Denny Campbell said there was the possibility of a student fee increase, if state revenues really plummeted.
"This is a grim situation that we, and the entire state budget are faced with," said Trustee Bill Hauck.
The governor has asked state agencies to implement hiring freezes and prepare budgets with cuts ranging from 3-15 percent for next year. The CSU has not been asked to prepare formal scenarios, but has been asked to work with the Department of Finance on budget possibilities. Finance also has asked state entities, including the CSU and the University of California, to contribute to the current year savings of $150 million on a statewide basis.
Executive Vice Chancellor West said a 10 percent reduction in CSU's General Fund allocation would mean $260 million less in our budget, and 15 percent would mean a $390 million hole in the budget. Given that 76-80 percent of CSU's budget is in salaries, some of the impact inevitably would fall on faculty and staff.
In CSU's discussions with Finance, West said that he has stressed what budget cuts would do to services for students. "We cannot absorb anything approaching 4-5 percent without it impacting programs and instruction," West said.
Besides the enrollment and salary increases, other highlights of the 2002/03 budget request include:
The Board of Trustees also approved a 2002/03 lottery revenue budget of $42.8 million with a $5 million reserve.
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