Governor Arnold Schwarzenegger's May Revision of the state budget reduced the $386 million gap in state funding initially anticipated for the 2008-09 CSU budget by $97.6 million. Even under the improved proposal, the CSU still faces $288 million in reduced funding and serious fiscal challenges, including $114 million in mandatory cost increases for which no general fund resources exist. There is still time to advocate a change in next year's budget.