BUDGET UPDATE –


BUDGET UPDATE -
Patricia L. Farris

Vice President for Administrative Affairs

Before we begin the planning process for the development of next year's (2004/05) operating budget, I thought it might be helpful to update the campus community on the status of the current year (2003/04) budget.

The Governor signed this year's California State Budget in July and the funds have been received on the campus. In fact, allocations to the divisions, following the recommendations of the Division and University Budget Advisory Committees and approved by the President, have already taken place.

The final permanent reduction to Cal Poly Pomona's 2003/04 operating budget amounted to $25,503,452 or approximately 14 percent. This figure represents general budget cuts as well as unfunded mandates. At the same time, Cal Poly Pomona will increase in enrollment this year by 3.1 percent or 543 FTES, including last year's unfunded over-enrollment. We did receive funding this year in the amount of $13,677,700 to cover some of the costs associated with serving and teaching these new students. Included in this figure is just under $8,000,000 in expected new revenue from the fee increase imposed as of Fall Quarter.

Therefore, the ultimate fiscal impact of the budget reductions in 2003/04 to Cal Poly Pomona is $11,825,752 fewer dollars (- 6.5 percent) and 543 additional students (+ 3.1 percent) to serve.

In anticipation of the potential budget challenges, the campus budget advisory committees (Division and University) began planning two years ago and established reserves where possible to help us weather the storm we knew was coming. Through careful planning we were able to reduce the 2002/03 budget enough to cover the required cuts, as well as set aside $5,802,050 in reserve for 2003/04.

After applying those funds to the final reduction figure for this year, we still had a substantial hole to fill. After much discussion, the University Budget Advisory Committee forwarded a recommended budget reduction strategy to the President in May 2003. The President approved the strategy and it is being implemented. That strategy includes: a reduction in operating funds that cover supplies, equipment, etc.; a reduction in funds available to hire student assistants; a reduction in travel funds; a reduction in payroll expense to be achieved by not filling select/identified vacant positions; and, other reductions as recommended by the various Division Budget Advisory Committees. Throughout our process, two objectives were kept at the forefront of our deliberations: to provide quality instruction and service to all of our students and to protect employee positions as much as possible.

As it turned out, the final current year budget cuts are approximately $1.5 million less than what we had planned for. Therefore, we have $1.5 million in reserve for further budget cuts that will surely come next year (2004/05).

All the budget reductions I have been discussing in this memo are permanent reductions to our operations budget. As a partial mitigation to the cuts this year, one-time funds including the one-time expenditure of some of the above-mentioned reserve dollars were allocated to assist the various units of the campus in their efforts to deliver instruction and services. The availability of these one-time funds is a tribute to the skillful management of all those individuals responsible for budgets on our campus.

As we begin our planning for 2004/05, we need to be cognizant of the serious problems we face, given the projected $8-12 billion remaining budget deficit facing California. Further, the budget language approved by the Legislature and signed by the Governor calls for no enrollment growth next year which will mean that no new dollars will be allocated to the campuses. In addition, one-time funds used to partially mitigate the current year reductions will no longer be available. Now, more than ever, we will need to work together to ensure that our students are provided the quality education they deserve and the quality education for which Cal Poly Pomona is known.

An unknown, of course, is the impact of the outcome of the recall election in October. The impact to Cal Poly Pomona will be directly influenced by the way in which the state leadership decides to address the budget deficit the state is facing.

I will be calling the University Budget Advisory Committee (UBAC) together very soon to begin our discussions on the development of the 2004/05 budget. The Division Budget Advisory Committees will also be gearing up very soon. I encourage you to participate, whenever possible, in the budget planning efforts in your department/college/division.

I will keep you updated as I receive information. While there will be much discussion in the media, my guess is that we will not have any reliable information until after the first of the year. If you have any questions, concerns or comments please e-mail me at plfarrris@cpp.edu. Also, I want to remind you that there is an online information resource under Administrative Affairs' Web page (www.cpp.edu/%7Eadm_affairs/budget/). There you will find prior and current year budget information, as well as the calendar and minutes of UBAC's meetings.

Patricia L. Farris
Vice President for Administrative Affairs