California State University Board of Trustees hear details of plan to close $584M budget deficit
Trustees of the California State University heard
details of the massive $584 million budget cut facing the CSU for the
next fiscal year, and discussed a range of options including employee
furloughs, enrollment reductions and potential student fee increases
needed to address the deficit. State general fund support of the CSU
for 2009-10 is expected to be $1.6 billion, which is $500 million
below the level of state support provided a decade ago.
"We have never before seen such a devastating cut in a single year,"
said CSU Chancellor Charles B. Reed. "I am really concerned because
the CSU system has a national reputation for access, quality and
diversity."
CSU Board Chair Jeffrey Bleich emphasized the purpose of the meeting
was to lay out all of the options. "This is going to be a terrible
situation for California and for this board," he said. "We all need
to understand what we're dealing with and the timing and tools that
we have available to address the budget situation."
Employee salaries and benefits account for 85.9 percent of the CSU's
operating budget, which means that large expenditure cuts will
require significant reductions in labor costs, explained Robert
Turnage, CSU assistant vice chancellor for budget. The overall goals
of the effort to close the budget gap are to serve as many students
as possible with quality instruction and to protect as many jobs as
possible. However, Turnage also stressed that the enormity of the
budget problem means that there is no single solution.
"We are facing a historic downturn in state revenues," said Turnage.
"No single option can solve the problem, and the problem will extend
beyond 2009-10. The realities of operating our campuses require
moving forward, even if action on the state budget is delayed."
To illustrate the magnitude of the cuts, the $584 million is
equivalent to the funding provided by the state for about 95,000
students or approximately the number of students CSU graduates each
year. Turnage emphasized that it is likely that the state will take
a long time to recover, and that any plan for the CSU needs to
anticipate fiscal uncertainty for at least the next 24 months.
Employee Furloughs
Trustees also heard an update on the CSU's meetings with its labor
unions to discuss an option to furlough all employees for two days
per month as one part of the effort to address the budget crisis. To
date, CSU has reached a tentative agreement with the California State
University Employees Union (CSUEU) that represents more than 16,000
non-academic employees. Applied systemwide, a two day furlough per
month for all 47,000 CSU employees would generate approximately $275
million toward the $584 million deficit. In addition, it would save
22,000 classes - or about 15 percent - that would otherwise need to
be cancelled for the coming academic year.
In addition, members of the Academic Professionals of California,
that represents 2,400 student services employees, have also voted to
begin negotiating furloughs. Furloughs for approximately 5,000
management, executives, presidents, and non-represented are expected
to begin August 1, 2009 following board action on July 21 to change
state regulations.
To date, approximately 21,000 of CSU's overall workforce of 47,000
employees have committed to furloughs as one part of the overall
effort to address the massive deficit. CSU has met with the
California Faculty Association (CFA) to discuss the furlough option,
but to date, no vote of its members has been scheduled. There are
approximately 23,000 faculty personnel, but only dues-paying members
of the faculty union are allowed to participate in a vote. Employees
in the public safety labor unit will be exempt from furloughs, and
several other collective bargaining units have either rejected
furloughs or are still negotiating with the CSU on the option.
"We know that furloughs save jobs, protect retirement and keep health
benefits in place," said Reed. "There are no savings in furloughs.
Furloughs cut expenses, and will allow us to preserve as many jobs as
possible and to offer as many course sections as possible."
A furlough
ihttp://www.calstate.edu/PA/News/2009/documents/furlough- factsheet.pd
f >s a mandated period of time off without pay. Furloughs differ from
salary reductions and pay cuts in that they are temporary and do not
affect employment status, or health benefit eligibility or pay rate
for retirement benefits. Employees are required not to work on
furlough days.
Enrollment Cuts and Student Fees
Trustees also were briefed about planned enrollment reductions for
2010-2011. Chancellor Reed announced that campuses will be closed
for spring 2010 enrollment and will close winter 2010 admissions.
Overall, CSU will look to reduce its enrollment by 32,000 students
systemwide for 2010-2011 through a combination of enrollment
management tools used last fall such as increased grade point
averages for out-of-area applicants.
There will also be a fee increase considered at the July 21 board
meeting that will go into effect for fall 2009. While the exact
amount of the fee increase has not been finalized, increases in
financial aid included in the federal stimulus package will likely
cover any fee increase for 187,000 of CSU's 450,000 students. In
addition, CSU expects to receive an additional $81 million in Pell
awards for its neediest students, and would also set aside one-third
of any fee increase toward financial aid. Tax credits, increased
work study and student loan improvements will also help to offset the
fee increase for many students.
Next Steps
Chancellor Reed reiterated that CSU is running out of time to plan
for the beginning of the new academic year, since many personnel
decisions require a minimum of 45 days notice. "I have got to ask
the presidents to move forward with their plans on how they will deal
with the budget cuts on their campus, and we need to follow the
contract provisions to reduce our workforce," said Reed. Campus
presidents are due to submit their campus plans within the next two
weeks. The CSU Board of Trustees will vote on the entire action plan
to address the $584 million deficit at its July 21 meeting.
###
About the California State University
The California State University<http://www.calstate.edu /> is the
largest system of senior higher education in the country, with 23
campuses, approximately 450,000 students and 46,000 faculty and
staff. Since the system was created in 1961, it has awarded nearly
2.5 million degrees, about 90,000 annually. Its mission is to provide
high-quality, affordable education to meet the ever-changing needs of
the people of California. With its commitment to excellence,
diversity and innovation, the CSU is the university system that is
working for California.
details of the massive $584 million budget cut facing the CSU for the
next fiscal year, and discussed a range of options including employee
furloughs, enrollment reductions and potential student fee increases
needed to address the deficit. State general fund support of the CSU
for 2009-10 is expected to be $1.6 billion, which is $500 million
below the level of state support provided a decade ago.
"We have never before seen such a devastating cut in a single year,"
said CSU Chancellor Charles B. Reed. "I am really concerned because
the CSU system has a national reputation for access, quality and
diversity."
CSU Board Chair Jeffrey Bleich emphasized the purpose of the meeting
was to lay out all of the options. "This is going to be a terrible
situation for California and for this board," he said. "We all need
to understand what we're dealing with and the timing and tools that
we have available to address the budget situation."
Employee salaries and benefits account for 85.9 percent of the CSU's
operating budget, which means that large expenditure cuts will
require significant reductions in labor costs, explained Robert
Turnage, CSU assistant vice chancellor for budget. The overall goals
of the effort to close the budget gap are to serve as many students
as possible with quality instruction and to protect as many jobs as
possible. However, Turnage also stressed that the enormity of the
budget problem means that there is no single solution.
"We are facing a historic downturn in state revenues," said Turnage.
"No single option can solve the problem, and the problem will extend
beyond 2009-10. The realities of operating our campuses require
moving forward, even if action on the state budget is delayed."
To illustrate the magnitude of the cuts, the $584 million is
equivalent to the funding provided by the state for about 95,000
students or approximately the number of students CSU graduates each
year. Turnage emphasized that it is likely that the state will take
a long time to recover, and that any plan for the CSU needs to
anticipate fiscal uncertainty for at least the next 24 months.
Employee Furloughs
Trustees also heard an update on the CSU's meetings with its labor
unions to discuss an option to furlough all employees for two days
per month as one part of the effort to address the budget crisis. To
date, CSU has reached a tentative agreement with the California State
University Employees Union (CSUEU) that represents more than 16,000
non-academic employees. Applied systemwide, a two day furlough per
month for all 47,000 CSU employees would generate approximately $275
million toward the $584 million deficit. In addition, it would save
22,000 classes - or about 15 percent - that would otherwise need to
be cancelled for the coming academic year.
In addition, members of the Academic Professionals of California,
that represents 2,400 student services employees, have also voted to
begin negotiating furloughs. Furloughs for approximately 5,000
management, executives, presidents, and non-represented are expected
to begin August 1, 2009 following board action on July 21 to change
state regulations.
To date, approximately 21,000 of CSU's overall workforce of 47,000
employees have committed to furloughs as one part of the overall
effort to address the massive deficit. CSU has met with the
California Faculty Association (CFA) to discuss the furlough option,
but to date, no vote of its members has been scheduled. There are
approximately 23,000 faculty personnel, but only dues-paying members
of the faculty union are allowed to participate in a vote. Employees
in the public safety labor unit will be exempt from furloughs, and
several other collective bargaining units have either rejected
furloughs or are still negotiating with the CSU on the option.
"We know that furloughs save jobs, protect retirement and keep health
benefits in place," said Reed. "There are no savings in furloughs.
Furloughs cut expenses, and will allow us to preserve as many jobs as
possible and to offer as many course sections as possible."
A furlough
ihttp://www.calstate.edu/PA/
f
salary reductions and pay cuts in that they are temporary and do not
affect employment status, or health benefit eligibility or pay rate
for retirement benefits. Employees are required not to work on
furlough days.
Enrollment Cuts and Student Fees
Trustees also were briefed about planned enrollment reductions for
2010-2011. Chancellor Reed announced that campuses will be closed
for spring 2010 enrollment and will close winter 2010 admissions.
Overall, CSU will look to reduce its enrollment by 32,000 students
systemwide for 2010-2011 through a combination of enrollment
management tools used last fall such as increased grade point
averages for out-of-area applicants.
There will also be a fee increase considered at the July 21 board
meeting that will go into effect for fall 2009. While the exact
amount of the fee increase has not been finalized, increases in
financial aid included in the federal stimulus package will likely
cover any fee increase for 187,000 of CSU's 450,000 students. In
addition, CSU expects to receive an additional $81 million in Pell
awards for its neediest students, and would also set aside one-third
of any fee increase toward financial aid. Tax credits, increased
work study and student loan improvements will also help to offset the
fee increase for many students.
Next Steps
Chancellor Reed reiterated that CSU is running out of time to plan
for the beginning of the new academic year, since many personnel
decisions require a minimum of 45 days notice. "I have got to ask
the presidents to move forward with their plans on how they will deal
with the budget cuts on their campus, and we need to follow the
contract provisions to reduce our workforce," said Reed. Campus
presidents are due to submit their campus plans within the next two
weeks. The CSU Board of Trustees will vote on the entire action plan
to address the $584 million deficit at its July 21 meeting.
###
About the California State University
The California State University<http://www.
largest system of senior higher education in the country, with 23
campuses, approximately 450,000 students and 46,000 faculty and
staff. Since the system was created in 1961, it has awarded nearly
2.5 million degrees, about 90,000 annually. Its mission is to provide
high-quality, affordable education to meet the ever-changing needs of
the people of California. With its commitment to excellence,
diversity and innovation, the CSU is the university system that is
working for California.
I have a child in CSU system. It should have taken only four years, but after five years he still did not graduate. When asked why he stated that school not offering the class, class is full or class is canceled. Now he doesn't know how long it will take to graduate and he needs only about 15 units. He is not alone. There are to many young men and women that need a few classed and unable to get because of the budget cut.
As concerned parent I would like to know how my child and others like him can graduate get their diplomas and move on with their lives.
By cutting classes you at CSU system shattering their dreams.
These students don't know what to do, wait, forget the education or .... what?
I was paying for 5 years for my child education. Know you want to tell me that I waisted my money? I think it's not right.
Give these generation the chance to get to their dreams.