Budget Central

CSU Community Discusses Options to Deal with Budget Cuts

A wide array of cost-reduction and revenue-enhancement strategies to mitigate the CSU's budget reductions were discussed last week by the Systemwide Budget Advisory Committee and members of the CSU community in a meeting that was webcast to the campuses.

The CSU is facing an additional $250 million cut to its budget in November if voters reject Gov. Jerry Brown's tax measure. The $250 million compounds an ongoing structural deficit from prior state budget cuts and if enacted, would reduce the CSU's state funding to $1.8 billion--the lowest amount in 17 years--but the CSU is serving 90,000 more students.

Everything is on the table for consideration-€”even furloughs€” given the magnitude of the situation, said CSU Executive Vice Chancellor and Chief Financial Officer Benjamin F. Quillian. He pointed out that when the CSU implemented furloughs in 2009-10, it reduced expenditures, but required considerable time to implement and slowed productivity.

Other cost-reduction strategies discussed included: consolidation of services to optimize costs€”an option that is already being considered for accounts receivable, procurement and other areas; discontinuing certain academic programs; larger class sizes; and reducing the number of faculty sabbaticals.

In addition, roughly 85 percent of the CSU's budget is devoted to personnel costs. Changing the employer/employee share of health care premiums and reductions in pay would yield significant savings. However, these options would require negotiations with labor unions and additional considerations, such as the fact that most CSU employees have not received a raise in several years.

Not all options discussed are feasible, such as closing a CSU campus or charging a higher tuition for certain campuses and/or programs, which involve legislative consideration and lengthy implementation times. Others, such as specialization of campuses, challenge the CSU's mission of accessibility.

Revenue enhancement strategies included charging more for students taking more than 16 units, adding fees for "super seniors" and multiple class repeats, and increasing master's level tuition fees and nonresident tuition fees. However, these strategies would not produce significant revenue. Additional possibilities raised were an "ability to pay" tuition structure, corporate partnerships that provide tuition funding for future company employees, and consolidating campus colleges and departments.

A second forum for members of the CSU community is being planned for June. More information.