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State Budget Crisis Update

Implications for Cal State Campuses

February 4, 2009

Payments Delayed and Furloughs Enacted, CSU Exempt

As the governor and legislators continue to negotiate over a budget plan to close the state’s estimated $42 billion budget deficit, State Controller John Chiang this week began delaying payments to state programs, vendors and other businesses for 30 days. If a budget accord is not reached, the controller has warned that these delays could be extended or he may be forced to begin issuing IOUs.

Under the State Constitution, however, the state has an obligation to meet its payment to public schools and public higher education systems. Therefore, the Chanellor's Office reports, CSU employees will continue to be paid. To see a list of priority payments, visit the state controller's website.

Gov. Arnold Schwarzenegger’s December Executive Order requiring furloughs two days per month for state civil service employees will be implemented Friday. Last week, a Superior Court judge rejected arguments from several state employee unions alleging that the governor’s action was illegal and unconstitutional. Since the court’s ruling, the governor has expanded the scope of the furlough plan by sending the required documents to the State Controller’s Office to furlough employees of the state constitutional officers (lieutenant governor, attorney general, state treasurer, state controller, secretary of state, superintendent of public instruction and members of the Board of Equalization).

The CSU is outside of the governor's direct jurisdiction and exempt from his furlough orders.

Nonetheless, the governor’s executive order requests that the CSU, University of California and California Community Colleges implement similar measures. The CSU is not planning furloughs at this time, but it has implemented several cost-saving measures, including: limiting student enrollment for fall 2009, freezing executive-level salaries, restricting travel, deferring purchases and holding vacant positions.

The longer the state delays reaching a budget compromise, the more at risk the CSU is to deeper budget cuts that will significantly affect programs, services, payroll and personnel. The chancellor, vice chancellors and campus presidents have been meeting regularly to plan operations under a variety of different budget scenarios.

Change in Cal Grant Disbursements

While many CSU students were preparing for delays in financial aid, due to the state’s budget crisis, the California Student Aid Commission said last week that it would initiate spring semester advances, but not at the full amount.

The California Student Aid Commission will pay 85 percent of the Cal Grants for spring semester, rather than the usual 95 percent based on consultations with the State Controller’s Office. Because the 85 percent disbursement may not fully cover need, the CSU has committed to defer the collection of the state university fee for students who experience delays receiving Cal Grants. This action is to ensure that the CSU’s financially neediest students, who rely on Cal Grant A and B awards to cover their state university fee, are able to enroll for and continue their studies during the spring semester.

Enrollment Update

Two key dates are approaching for prospective CSU students. First-time freshmen have until March 1 to apply to CSU campuses that are still open: Bakersfield, Dominguez Hills, East Bay, Humboldt, Los Angeles, Maritime Academy, Monterey Bay, Sacramento and San Bernardino.

Students can find up-to-date information at In addition, the Free Application for Federal Student Aid, commonly known as the “FAFSA” form, must be filed by March 2. Students can apply at

The March dates will be underscored when the CSU’s chancellor, presidents and other officials visit 68 churches during CSU’s upcoming Super Sunday. The annual college planning and outreach event takes place at 41 churches in Northern California Feb. 15, and 27 churches in Southern California Feb. 22. On both Sundays, CSU leaders will take to the pulpit to encourage students and families to start preparing for college as early as sixth grade. Cal State Fullerton President Milton A. Gordon will be speaking before congregations at Glory Christian Fellowship Church in Carson, and Vice President for Student Affairs Robert Palmer will be speaking at Long Beach Worship Center Community Church. For more information, go to


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