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| Chancellor Charles B. Reed |
Welcome back to a new year and a new term at the California State University. I want to take this opportunity to bring you up to date on the latest news on the state budget.
On Jan. 10, Gov. Schwarzenegger released his proposed 2005/06 budget. We are extremely pleased that this budget honors the higher education compact that he agreed to last spring with the CSU and the University of California systems. The budget proposes $211.7 million in new revenue for the CSU, which increases by 4.4 percent the CSU's General Fund support. If approved, the proposed budget increase would provide state General Fund revenue of approximately $2.6 billion for the CSU.
The budget would provide a 2.5 percent increase for enrollment growth, or $63.7 million to serve an additional 10,000 students in 2005/06. It also includes a general operations increase that will provide $88.1 million to support an average 3.5 percent compensation increase (which will have to be bargained) for faculty and staff, effective July 1, 2005. Based on the compact, the CSU would also receive $101.2 million in student fee revenue generated by a student fee increase that will be effective in fall 2005.
To put these figures in context, consider that over the past three years, the CSU has seen a net budget reduction of $522 million that has resulted in enrollment reductions, cuts in student services, and an inability to make progress on a growing faculty and staff salary gap. The compact funding provided in the governor's budget would allow us to begin to improve student access, employee compensation, and our ability to meet mandatory costs for health and dental benefits, new space, and increasing insurance and energy costs.
Once these pieces are back in place, we can continue to focus on our primary purpose: to offer a wide range of educational opportunities for California's students and produce well-prepared graduates for California. As we learned in the impact study released last fall, the CSU plays a major role in the development of our state's key industries and helps California remain competitive in the global economy. When the CSU flourishes, everyone wins.
The next steps for the budget process include a review by the Legislative Analyst's Office in February and budget subcommittee meetings in the legislature during March and April. In May, the governor will release the May Revise to his budget. The official deadline for budget adoption is at the end of June.
I will send another update when the governor releases the May Revise. In the meantime, I encourage you to visit www.calstate.edu to read more about the budget, the positive contributions the CSU makes, and the latest CSU news. To sign up for the CSU Leader, the CSU's weekly e-newsletter, please visit www.calstate.edu/CSULeader. I also encourage you to continue sharing the news about the incredible impact of the CSU and its campuses with your friends and colleagues around the state.
Thank you again for all that you do for the California State University, and best wishes for a positive, productive 2005.
Charles B. Reed
Chancellor
The California State University