· The governor’s proposed January budget leaves the CSU
with a net reduction of $172 million.
· Over the past three years, the CSU has assumed a total
net budget reduction of $562.6 million – a 21.6 percent reduction to the
· Today the governor is releasing the May Revise – the
next significant step in budget process.
On Tuesday, the CSU and the UC have agreed to a new
Compact with Governor Schwarzenegger that will provide the CSU with
increased funding beginning in 2005/06 and continuing through 2010/11. In
the first two years the increase will be 3 percent to our base budget, and
in the subsequent years the increase will be 4 percent per year.
This agreement will mean that the CSU will be able to
increase student enrollment by 2.5 percent per year beginning in 2005/06,
and we can begin to stem the decreases we have experienced the past years.
We still have a difficult year ahead of us, 2005/05, but
with the Compact, there is a brighter future for the entire California State
· And we will not face additional budget cuts beyond the
reduction proposed in the governor's January budget as we feared.
· We were also concerned about the ability of the CSU
president’s to apply cuts where they believe it is most appropriate, and as
far away from the classroom as possible.
· The CSU will take all its cuts in enrollment reduction
(about 23,000 students) so that it can maintain quality for existing
· Student access is a special concern to me as an alumna
of the CSU system.
· The gap between the cost of educating a CSU student and
the amount of General Funds invested per full-time equivalent student has
grown from $900 to over $1,900 in four years.
· This says to me that the state’s commitment to
affordable, accessible higher education and the Master Plan is at risk.
· Aside from its impact on individual students, the
state’s declining investment in the CSU has reduced our ability to:
o Prepare well-trained employees;
o Create new jobs in our economy;
o Increase state revenues (through higher wages and
increased consumer spending)
· The CSU has planned several scenarios to mitigate these
cuts, including raising student fees, reducing enrollment, freezing vacant
positions and reducing positions.
· Taking a longer view, we are currently looking at
long-term student fee policy
· We have reached a general agreement that undergraduate
student fees should be adjusted on an annual basis over a period of years
until they reach a certain percentage of the average cost of education per
· It will be difficult to set a percentage, but we
believe that the percentage level range should be between 25 and 33 percent.
· After that, fees would be adjusted annually based on
the California per-capita income or the Higher Education Price Index.
· This will let students and their families plan better
for college costs over the years.
Although most of the compact does not apply to 2004/05,
student fees are mentioned specifically. The compact proposes a three-year
level of fee increases for CSU and UC undergraduate students that will average
10 percent in each of the coming three years. In 2004/05 student fees will
increase 14 percent, and in 2005/06 and 2007/07, they will increase 8 percent
· During this budget crisis, we must continue to
emphasize that the California State University is the state's economic
· We must remind policymakers that more educated workers
means higher tax revenues, greater productivity and less reliance on
· The CSU is an investment, not an expense.
· Also, the CSU has done everything in its power in the
last several years to manage hundreds of millions of reductions and unfunded
costs during a period of increasing enrollment.
· Our priority will continue to be to provide "authentic
access" to students – meaning that they will be able to get the course
sections and services they need to graduate on time.
· We will focus on maintaining the level of quality that
Californians expect of and demand from the CSU.
As I stated, the budget of the CSU is very complex and
ever changing – we do have as part of our web page "Budget Central" that is
very current and informative.
Effective Trustees are ones that listen according to the
Association of Governing boards to I would like to do that now.
Also, in these tough budget times my ear is about all I
At this time I would be happy to take any questions and
also I would like to hear your thoughts.