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California State University, Long BeachCalifornia State University, Long Beach

Governor's Proposed Budget - Jan 2011

On January 10, 2011, Governor Brown released his proposed 2011-12 state budget addressing an estimated $26 billion budget deficit. The Governor’s proposal includes a $500 million – or 18 percent – reduction in state support to the CSU. The Governor’s budget depends upon voter approval in June of a ballot initiative to extend current taxes. Democrats strongly support the Governor’s proposal – including the cut to the CSU – while most Republicans support budget reductions in the proposal, but do not support tax extensions. Because of these circumstances, the $500 million CSU cut appears to be the “best case” scenario. If tax extensions proposed by the Governor are not placed on a June ballot or do not receive voter approval, the CSU may face additional reductions beyond the proposed $500 million cut for 2011-12, a “worse case”.

Best Case Scenario

In the “best case” scenario, we currently expect the CSULB share of Governor Brown’s proposed CSU reduction to be about $40 million. This amount could be larger, depending on how the CSU system allocates the reduction to campuses. Two factors will help mitigate this reduction. First, we will receive additional student fee revenues resulting from the 10 percent fee increase effective Fall 2011 approved by the Board of Trustees last November. Net mitigation to the campus is less than 10 percent, however, because one third of additional student fee revenue will be set aside for State University Grants to assist financially needy students. Second, because the campus took a conservative approach to budget planning last fall, the late budget restoration made by Governor Schwarzenneger was set aside and therefore is available to offset Governor Brown’s proposed cuts. We must also plan for mandatory campus cost increases for health benefits and for new space and energy costs primarily related to the new Hall of Science. After taking all of these factors into consideration, we have anticipated a very preliminary estimated campus budget shortfall of about $5 million in this very best case scenario. The possible $5 million reduction would come on top of very steep reductions the campus took in both fiscal years 2008-09 and 2009-10.

CSULB’s enrollment target for 2011-12 is a modest increase from our current year enrollment. In the “best case” we are confident that we will be able to support the schedule of classes and serve these students. Importantly, student fees are now at a high enough level that enrollment growth contributes positively to our net operating budget.

Worse Case Scenario

If tax extensions proposed by the Governor are not placed on a June ballot or do not receive voter approval, we will find ourselves in a “worse case” and the campus budget shortfall would worsen dramatically. As we plan for this scenario, there are significant unknowns, such as actions that the state or Trustees might undertake to mitigate such a large additional reduction. In this scenario, our preliminary estimate puts the net campus reduction (assuming some mitigation at the system level) in the $15 million range, although frankly this is little more than an educated guess. In this situation, there will be no easy options.

The Resource Planning Process (RPP) Task Force and the operating divisions will begin planning soon for these scenarios. In Academic Affairs, the deans will soon begin planning and the Provost and his staff will engage in broad consultation. Preliminary conversations with the President’s Cabinet, the Academic Senate Executive Committee, and University Resources Council have begun. Suggestions from others will be accepted by email to budget@csulb.edu. Prior to the conclusion of the spring semester, we will share with the campus a broad outline of the results of our planning efforts. If any group would like an update sooner, please contact the office of Provost Para (5-4129) or Vice President Stephens (5-1658).

CSULB has a lot about which to be proud. Our graduation rates remain at historic highs, and compared to similar institutions across the United States, we do an impressive job serving underrepresented students. Student life is more vibrant than ever with the opening of our Recreation and Wellness Center. Despite major reductions already levied, we have sustained our schedule of classes and most services to students, something some of our sister CSU campuses have not managed to do. The faculty continues to bring distinction to the university with scholarly, creative achievements. CSULB is engaged in the community and around the globe. Campus services are of high quality and continue to improve. We are beginning to make progress in sustainability. Faculty, staff, administrators and students are justly proud of The Beach. We do not wish to retreat on these remarkable achievements. Budget challenges may slow progress, but we are determined to continue our trajectory of rising excellence.

Go Beach!