A Message from Chancellor Charles B. Reed

A Message from Chancellor Charles B. Reed
Chancellor Charles B. Reed

Dear Colleagues:

As we close out the 2003/04 academic year, I want to thank you for the work that you do for the California State University. Your commitment to the CSU and its mission, especially during these challenging budget times, is what allows our institution to remain strong and effective.

Let me take this opportunity to share some information with you about new budget developments at the CSU:

Earlier this month, the California State University and the University of California reached a higher education compact with Governor Schwarzenegger. This agreement is similar to funding agreements that we have had with previous governors. It will provide the CSU with increased funding beginning in 2005/06 and continuing through 2010/11. In the first two years, the increase will be 3 percent to our base budget, and in the subsequent years the increase will be 4 percent per year. During the last three years of the compact, the state will provide an additional 1 percent increase to the prior year's base for core academic support needs. In addition, we will be able to increase student enrollment by 2.5 percent per year beginning in 2005/06.

This compact agreement signals a turnaround in our budget after several difficult years. It promises us a strong state commitment to higher education, and it will give us a “floor” that we can work from to allow for additional budget increases in the future.

As for 2004/05, the details of the state's budget remain under discussion in Sacramento. Earlier this month, the governor released the May Revise of his 2004/05 budget. We were pleased to learn that the May Revise did not call for the CSU to take any additional cuts beyond the $240 million reduction that the governor proposed in January.

Nevertheless, 2004/05 will be another difficult budget year.

To mitigate the budget cuts, the CSU has been planning and implementing several measures such as freezing vacant positions and deferring non-essential costs such as professional development and travel.

Additionally, the governor's budget calls for student fee increases, which the CSU's Board of Trustees approved last week after much discussion with students and other members of the CSU community.

Although the decision to raise fees is always a difficult one, the fee increase will allow us to serve more students and preserve more faculty and staff positions. In fact, absent the approximately $100 million in revenue generated from the fee increase, the CSU would be forced to cut enrollment by an additional 13,500 full-time equivalent students and lose more than 1,500 faculty and staff.

For 2004/05, student fees will increase by 14 percent or $288 for undergraduates, 20 percent or $450 for teaching credential candidates, and 25 percent or $564 for graduate students. Twenty percent of the fee increase will be set aside for financial aid. The good news is that the May Revise added $10.4 million for Cal Grants, which will cover the 14 percent fee increase for as many as 38,000 undergraduate students.

Additionally, our Board of Trustees is developing a long-term fee policy that will help students and their families better plan for college costs over the years.

Legislators are expected to continue working on the 2004/05 budget for at least another month. We will be asking for their continued support for public higher education and reminding them that an investment in higher education is an investment in this state's future.

I will send you another update when we have a final budget for 2004/05.

In the meantime, please continue to watch the CSU's web site, www.calstate.edu, for the latest budget news. Thank you again for helping to make the California State University such an outstanding institution of higher education.


Charles B. Reed