Revised State Budget Proposals Would Cause Lasting Damage to CSU

In response to the latest revised budget proposal released by Gov. Schwarzenegger, CSU Chancellor Charles B. Reed said further cuts would cause lasting damage to the institutions' ability to serve students.

“Reductions of the magnitude being proposed are unprecedented and unfathomable,” Reed said. “This will have permanent and devastating consequences on student access to our universities, and to the CSU's ability to facilitate the state's economic recovery and future prosperity.”

As part of his May 14 budget proposal, Gov Schwarzenegger included a reduction to the state's General Fund support for the CSU that brought CSU's cumulative cuts to $410 million for 2008-09 and 2009-10. That is the equivalent of a 10 percent overall budget reduction and a 15 percent reduction in the state's General Fund support of the university system. However, the state's economy has continued to deteriorate with a projected budget shortfall for the next fiscal year of $24.3 billion, and the Governor has proposed additional cuts to the CSU budget of as much as $375 million over the 2008-09 and 2009-10 fiscal years.    

“We are facing an unprecedented financial crisis that will require us to take many difficult actions,” Reed said. “We are looking at every available option but know that they will be painful and severe. We would urge the legislature to consider how these additional cuts will permanently impact the university system's ability to provide access to future generations of students.”  

Reed had previously announced plans to provide an action plan in consultation with the presidents and trustees by the middle of June.  

CSU has already taken a number of cost cutting measures including a salary freeze for vice president/chancellor level positions; a hiring freeze on non-essential positions; cancellation of all non-critical equipment and supplies purchases and travel restrictions for employees. In addition, for the first time in its history, CSU declared systemwide impaction to limit the number of new students entering in fall 2009, due to the state's inability to fully fund enrollment growth and operational needs.

Overall, the CSU's budget includes almost $2.7 billion in state General Fund and $1.5 billion in student fee revenue.