2004-05 Budget Cuts Will Impact Student Access and Educational Programs

Governor proposes $240 million General Fund cut for 2004-05

(Jan. 9, 2004) —Attempting to address California’s continuing budget crisis, Governor Arnold Schwarzenegger proposed cutting $240 million or 9 percent from the California State University system for the 2004-05 fiscal year, potentially limiting student access by approximately 20,000 students if the cuts are implemented as proposed.

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. California will invest less in higher education and the CSU will be faced with the prospect of accepting fewer students. The CSU, however, will not compromise quality.

“While we continue to share the pain of the state’s fiscal crisis, the public must realize that these budget reductions will negatively impact student access to the California State University because all qualified students will not be admitted,” said CSU Chancellor Charles B. Reed. “Fewer students admitted means fewer educated citizens entering the workforce to stimulate the economy and provide the jobs that the governor stressed in his State of the State address. Not investing in higher education will have a devastating impact on the state’s economic future.”

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 proposal recommends redirecting 10 percent or 4,200 of CSU first-time freshmen to the community colleges.

In the State of the State address, the governor also called for a more stable fee policy for higher education.

“The California State University’s primary mission is to provide the state’s population with the opportunity for a high-quality, affordable education,” Reed added. “We do support the governor’s message that calls for a predictable and reasonable fee policy — it makes sense for students and their families. However, the state must do its part to implement such a policy.”

The CSU Board of Trustees has recommended for years the adoption of a predictable, stable fee policy and will discuss such a plan at the March board meeting. CSU officials, however, warned that steep fee increases at the graduate level might adversely impact CSU’s production of teachers and therefore hurt the state’s school districts. Higher fees may discourage aspiring teachers from enrolling in programs that lead to teaching credentials.

The chancellor is also concerned about the proposed elimination of funding for EOP, outreach and academic preparation programs. These programs have been very successful for many less fortunate CSU students. Chancellor Reed said that the CSU would 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 so that the CSU can continue to offer high quality education.

“We will be seeking flexibility in the fee levels and in the areas the governor has suggested the cuts,” said Richard P. West, CSU executive vice chancellor and chief financial officer. “We would like the ability to take the cuts where they would least hurt students and the quality education the CSU provides.”

The governor’s proposal will be followed by the release of a budget analysis by the Legislative Analyst’s Office and 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 California State University is the largest system of senior higher education in the country, with 23 campuses, approximately 409,000 students and 44,000 faculty and staff. Since the system was created in 1961, it has awarded about 2 million degrees. The CSU is renowned for the quality of its teaching and for the job-ready graduates it produces. Its mission is to provide high-quality, affordable education to meet the ever-changing needs of the people of California. With its commitment to excellence, diversity and innovation, the CSU is the university system that is working for California. See www.calstate.edu.

Contact: Clara Potes-Fellow, 562-951-4806, cpotes-fellow@calstate.edu

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Last Updated: January 9, 2004

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