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What's the Buzz on the Budget and its effect on student enrollment, University budget, and long-term fee plans?
<The budget information below was excerpted from President Ruben Arminana's Fall 2004 Convocation Speech. The entire speech, and the Convocation speeches by other campus leaders, can be found at www.sonoma.edu/uaffairs/convocation>
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"...the (budget) nightmare we were facing when the last academic year ended did not fully materialize. The proposed budget would have resulted in cuts to SSU of more than $5 million and a reduction in enrollment of 5% or 348 full time equivalent students (FTES). The impact of these cuts was unacceptable. Given our commitment not to lay-off any permanent employees, it would have fundamentally changed who we are as a university in terms of class offerings, class size, and progress toward a degree. Therefore, I committed $1.2 million to maintain courses and sections. To be honest, I was not sure where the money was going to come from, but I had the conviction that it had to come from somewhere. Fortunately, we have found some solutions.
Clearly, there was a clamor of public opposition to the plan of sending 7,500 CSU- admitted students to community colleges for the next two years. The Legislature responded by restoring $40.3 million to the CSU for enrollment growth and academic preparation programs.
The final budget is somewhat improved. Instead of a $5 million cut, our budget was reduced by approximately $3.5 million, with an enrollment reduction of 3% or 224 FTES. This means we had to turn away students who are eligible to enroll at this or any other CSU campus. The impact of these cuts is felt everywhere and some classes are now larger. As I have expressed before, this is unacceptable and compromises the future of California. It cannot continue much longer.
The reductions are significant and they come on top of other major reductions. In total, this University has suffered about $8 million in cuts over the past three years. If you add to these another $5 million in underfunding, the total negative impact that we are enduring amounts to more than $13 million.
What does the future hold? I have learned that in California you can never predict. But the two systems of higher education, the University of California and the California State University, reached a compact with Governor Schwarzenegger in May that regulates funding for the next six years beginning in 2005-06.
The Higher Education Compact is a floor, not a ceiling, and similar compacts with the past two governors have proven that. Unfortunately, the compacts hold, or are improved, only when the state’s finances are good. The last compact was put in abeyance during the past two difficult fiscal years. This time, Governor Schwarzenegger has assured us that the Compact will form the base of his budget for higher education in good and bad years. Chancellor Charlie Reed has expressed that “The Compact acknowledges the state’s commitment to provide adequate funding for the CSU and establishes a base that the legislature may supplement.” (Memorandum of August 2, 2004 to the CSU Board of Trustees and CSU Presidents from Charles B. Reed, Chancellor—Subject: 2004-2005 Final CSU Budget)
The Compact allows the CSU to plan for the future since it adds 3% to the base budget each year during the next two years and then 4% for the following four years. It adds an additional 1% for core academic needs each year beginning in two years, and the state will cover mandatory costs. Importantly, it recognizes and funds student enrollment at the marginal cost at a growth rate of 2.5% or approximately 10,000 students each year. In addition, it is expected that all campuses will convert to Year-Round-Operations soon, including SSU, and that the Board of Trustees will adopt an excess units policy.
In terms of fees, the Board of Trustees increased the State University Fee for undergraduate students by 14%, for graduate students by 25%, and for teaching credential students by 20%. Twenty percent of the fee increase is designated for financial aid. In future years the fees will increase by an average of 10% per year for both graduates and undergraduates.
After weeks of intense negotiations, a $103 billion budget compromise was eventually agreed upon by the Legislature and signed by the Governor two weeks into the new fiscal year. As a result, some significant progress was made to return California to more stable financial conditions, but economic stability remains precarious. The state has borrowed its way through the next two years, but it still faces a chronic imbalance of $6 billion a year. This means that economic growth has to increase significantly, further cuts to government and social programs have to be made and/or some taxes have to be increased. Facing these choices, it is important to have the stability of the Compact."
Ruben Arminana
President
slk, 8/26/04