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Budget Central

February 20, 2012

President’s Letter to the Campus Community

CSULB Students, Faculty and Staff:

As we rapidly approach the end of February, I feel that it is important to update you regarding our budget situation and what we are facing in the upcoming 2012–13 state budget. In the Governor's proposed 2012–13 state budget, the CSU is facing another $200 million reduction unless a November tax initiative is passed by California voters. This further reduction is in addition to the unprecedented $750 million (27 percent) recurring reduction that we have been forced to address this fiscal year.

Fortunately, by working together and through careful planning, our campus has been able to buffer some of these severe reductions through the use of some temporary resources provided by Governor Schwarzenegger and tuition fee increases which have allowed us to maintain our class schedule, provide essential student services, and protect many jobs. We have deliberately protected campus operations based on the potential that an improving economy and additional fee increases might enable us to avoid the deepest cuts. However, two recent developments have forced us to reconsider our budget planning options. First, as a result of state revenue shortfalls, there was the mid-year reduction of $100 million to the CSU in December 2011 ($7.7 million for CSULB). Although we knew we would be subject to a one-time reduction, we were not notified that it was a permanent budget reduction until January 2012 when the Governor released his proposed 2012–13 state budget. While we have covered this reduction in the current year by using university reserves, we must now make permanent budget cuts as we approach the 2012–13 fiscal year. Second, if the November initiative fails to receive voter approval, the CSU will be cut another $200 million ($15.6 million for CSULB). Together, these two permanent reductions of $300 million to the CSU would equate to a budget cut of approximately $23 million for CSULB.

We also know that next year we will have increased mandatory costs for health care, energy rates, and other adjustments totaling approximately $3 million for which we must find resources. After adding this $3 million in additional costs to the $23 million state reduction, we have to anticipate the potential of needing $26 million to address our CSULB 2012–13 budget. This is an unwanted scenario that is hitting all CSU campuses equally hard, causing much concern not only at the institutional levels but also among many of the public at-large who rely on the societal and economic contributions of the CSU.

The Governor's budget plan relies on voter approval of a tax measure that would temporarily raise income taxes on high-income earners and slightly increase the state sales tax rate. As mentioned earlier, if voters do not approve the tax measure, a series of trigger cuts would go into effect, including the additional $200 million cut to the CSU. This threat of additional cuts creates a high level of uncertainty that makes budget planning very difficult. Because the vote is scheduled for November 2012, with a trigger reduction in January 2013 if the ballot measure fails, the campus could face the potential trigger reduction of approximately $15.6 million midway through the 2012–13 fiscal year, long after enrollment and course scheduling decisions have been made.

The Governor's budget plan also proposes changes in the Cal Grant program that would save the state money. However, one proposal that raises grade point average requirements for new Cal Grant recipients would affect thousands of newly enrolled CSU students in 2012–13. Since most affected students likely have financial need, the loss of Cal Grant funding puts added pressure on campus financial aid resources. One aspect of the Cal Grant changes that we completely support are the changes to the maximum award levels going to private not-for-profit and for-profit colleges and universities. If enacted, awards to these institutions would be capped at the CSU maximum award level and would no longer exceed the grant awards allocated to CSU students.

It remains to be seen how the Governor's proposal will fare with the legislature and the public. A great deal hinges on the upcoming legislative debates over the budget, a subsequent May budget revision based on updated revenue projections, and the results of the November tax measure to increase taxes. The next couple of months will be critical for CSULB as we plan for the 2012–13 academic year.

CSULB's budget planning process has served our campus well during prior difficult periods and is admired by our peer CSU campuses and others. Our process involves broad campus representation on our Resource Planning Process Committee (RPP). RPP includes the Academic Senate Chair, several Academic Senate Council Chairs, our CFA President, a staff representative, our Associated Students President, and experienced administrators.

Open Forums

We have scheduled three open forums at which the budget situation will be presented in detail. Anyone interested in more information is welcome to attend one of the following sessions:

  • Monday, February 27, 3 – 4 pm at the Karl Anatol Center
  • Tuesday, February 28, 12 noon – 1 pm at the Barrett Athletic Administration Center (BAAC)
  • Friday, March 2, 9 – 10 am at the Barrett Athletic Administration Center (BAAC)

We will continue to inform you as more information becomes available. Despite the uncertainty that we face, we firmly believe that our university can continue to deliver on its core mission of helping students to succeed. Our fight this year on the state and federal fronts has only just begun, and we will need every vote and voice to ensure that Californians prioritize our students and children much higher than evidenced in recent years.

Thank you and GO BEACH!

F. King Alexander
President

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