Latest Proposed Cuts to CSU Threaten Lasting Damage
July 23, 2009
CSU Puts a Plan in Place to Address Lack of State Budget Support
The California State University (CSU) is facing an unprecedented 20% (or $584 million) budget cut which has forced the Board of Trustees and Chancellor Charles B. Reed to take action to address this severe drop in state support. As alumni and supporters of Cal State Fullerton, we want to keep you up-to-date on the critical decisions that we are facing over the next several months as we aim to provide the highest level of quality and accessibility to our university.
“These are not easy choices,” said CSU Chancellor Reed. “We are asking everyone to make sacrifices so that we can continue to serve as many students as possible and to preserve as many jobs as possible under very difficult circumstances.”
What does this plan include?
- Systemwide furloughs reducing $275 million in salary expenses
- Raising student fees, offsetting $157 million of the cuts
- Cutting enrollment by 40,000 students over the next two years; and
- Cutting an additional $183 million through a variety of cost saving options.
How will this impact students?
State general fund support of the CSU is almost $600 million below the level of state support provided a decade ago. Yet the CSU is serving 100,000 more students than it did a decade ago. To preserve quality and access and to maintain the resources needed to serve students, the CSU has been forced to take the following actions:
- Enrollment will be reduced by 40,000 students in 2010-11.
- Enrollment for winter and spring 2010 is closed.
- Effective fall 2009, fees for full-time undergraduates will increase by $672 for undergraduate students, $780 for teacher credential students and $828 for graduate students. This increase will be in addition to the $306 fee increase (fulltime undergraduate) adopted in May.
- The undergraduate State University Fee will go from $3,354, to $4,026 per year. Including the average campus fees of $801, undergrads would pay approximately $4,827 per year, which continues to be the lowest fee rate among comparable institutions.
- One-third of the revenue from the fee increase will be set aside for financial aid ($79 million). The remaining $157 million in fee revenue will help offset part of the $584 million budget cut.
- Families who make $75,000 or less will not pay any fees. More than 187,000 students will be covered dollar-for-dollar for the increase through a mix of grants, fee waivers and newly expanded federal tax credits.
- The CSU is the largest recipient of Pell Awards. The federal stimulus package increased the maximum Pell Award and, as a result, the CSU will receive an additional $81 million for students. The university has 120,000 students receiving Pell Grants so that will help a great deal.
How will this impact CSU employees?
Employee salaries and benefits make up 85 percent of the CSU’s operating budget. To manage the deficit, the CSU is forced to reduce labor costs and has taken the following actions:
- The CSU has implemented a salary freeze for executives and a hiring freeze for non-essential positions.
- The CSU is proposing to furlough its 47,000 employees, including management and executives, two days per month. This reduces spending by about $275 million - preserving 22,000 course sections or 15 percent of classes.
How will this impact CSU operations?
The state budget deficit has required the CSU to curtail construction projects and modify operations as follows:
- More than 130 infrastructure projects on CSU campuses were suspended last December and restarted in April.
- There is still a suspension on lease revenue bond funded projects, including five of which are CSU projects.
- The state budget has not provided funding for increased costs in energy, electricity and other operational necessities.
- The state budget has not provided funding for increased costs in employee health benefits which have risen by $8.4 million this year.
For more information on how Cal State Fullerton and the CSU are addressing the current budget reductions, please visit CSU Budget Central.
