California State University Faces $312.9 Million Cut to Budget

Chancellor’s Office says Budget Fails to Fund Student Access

January 14, 2008

From the Chancellor's Office

In acknowledgement of a $14 billion budget deficit facing California, Governor Arnold Schwarzenegger has proposed a $312.9 million cut to the California State University budget approved by the California State University Board of Trustees for the 2008-09 fiscal year. The proposed budget fails to fund access for 10,000 students; $36 million in mandatory costs, including employee health benefits and compensation agreements for CSU faculty and staff.

This funding reduction comes after the CSU budget was reduced by more than $500 million earlier this decade, and has serious implications on providing the educated workforce that drives California’s economy.

“We recognize this is a difficult budget year, but these cuts will impact student access to the California State University because we will not be able to admit all the students who are qualified,” said CSU Chancellor Charles B. Reed. “As the public university that prepares the majority of California’s workforce, these budget cuts will have a direct impact on the state’s economy and on the key industries that our graduates enter such as nursing, teaching, agriculture, business, public administration and technology.”

In addition, the $73.2 million in general fund revenue needed to buy out a student fee increase is not included in this year’s budget. Based on the governor’s budget, funding of $386.1 million is needed to fund 2.5 percent enrollment growth supporting an additional 10,000 students, employee compensation, mandatory costs, and avoid a student fee increase.

“In addition, these budget cuts will potentially jeopardize the gains in enrollment of students from underserved communities that we have accomplished as a result of our K-12 and community partnerships,” added Reed. “This will have significant long-term economic and social consequences if we are not able to continue to improve the rate of college-going students in California.”

The next steps in the 2008-09 budget process will include the release of a budget analysis by the Legislative Analyst's Office and a series of legislative budget hearings. In May, the governor will submit a revised budget request based on the forecast of state revenues at that time (known as the “May Revise”). The governor also has called for a special session of the legislature to look at 2007-08 budget reductions.

Following legislative approval, the governor is supposed to approve the budget by July 1, the first day of the new fiscal year. The CSU Board of Trustees will discuss the proposed budget at its January, March and May meetings.