The CSU Budget – Turning a Corner with the Chancellor

Welcome to a new academic year at the California State University. I hope that you all had an enjoyable summer term and are looking forward to a successful year on campus.

After several tough budget years, things are finally looking up for the CSU. The current year, 2004/05, will still be somewhat of a transitional year as we continue to manage budget reductions and serve all of our students. But we will manage this year with the promise of better news on the horizon.

For 2004/05, our state policymakers approved a CSU General Fund budget totaling $2.448 billion. This budget represents a net reduction of approximately $157 million less than we received last year. While this is a steep reduction, the total budget is $40.3 million more than we had originally expected. We will be able to serve 7,500 students whom we initially thought we would have to turn away, and restore funds to academic preparation and CSU outreach programs as well as the Educational Opportunity Program.

Thanks to the higher education compact that the CSU and the University of California signed with the governor, our future budgets look much more promising. The compact will allow us to plan for budget increases from 2005/06 through 2010/11 so that we can make up some of the ground we lost during the state's budget crisis. Moreover, the compact will serve as a foundation - not a ceiling - with the possibility of additional funding beyond this agreement.

Another important issue for this fall is a long-term student fee policy, which we developed after many months of consultation with students, faculty, staff, and the campus presidents. The policy proposes that the CSU will adjust resident undergraduate and post-baccalaureate fees each year, no more than 10 percent per year, until the fees reach one-third of the cost of students' education. Resident graduate fees would be gradually raised to a level equal to 150 percent of the undergraduate fee. Once the student fees reach these levels, future annual adjustments would be based on the change in California per capita income.

We believe that a predictable long-term student fee policy will help all students by protecting them from the boom-and-bust cycle that has resulted in unexpectedly large fee increases in the last two years. It will allow students and their families to plan better, and it will help our universities better manage their resources to meet students' needs. The CSU's Board of Trustees will vote on this policy at their Oct. 28 meeting.

One final note on what's new for this fall: There is a major election ahead in November, and the California State Student Association has set a goal of attracting 40,000 new voters. If you are eligible to vote and have not already registered, I encourage you to participate.

The California State University – and the state of California – have certainly weathered some difficult times but I am confident that we have finally turned a corner and we have many good years to come. I urge you to visit the CSU web page, www.calstate.edu, for more news and updates throughout the year.

Reed is the chancellor of the 23-campus California State University system.