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The California State University (CSU) is facing an unprecedented $584 million budget reduction for the current fiscal year. The severe cut, which amounts to 20 percent, has forced the CSU Board of Trustees and Chancellor Charles B. Reed to take action to address the budget gap.

We want to update you on the critical budget issues we will encounter over the next several months as we aim to provide the highest level of service to students at Sacramento State.

“These are not easy choices,” Chancellor Reed said. “We are asking everyone to make sacrifices so that we can continue to serve as many students as possible and to preserve as many jobs as possible under very difficult circumstances.”

The CSU plan includes the following provisions:

• Systemwide furloughs, reducing $275 million in salary expenses.
• Raising student fees, offsetting $157 million of the cuts.
• Cutting enrollment by 40,000 students over the next two years.
• Cutting an additional $183 million from CSU campus budgets through a variety of cost-saving options.

How will the CSU plan affect students?

State general fund support of the CSU is almost $600 million below the level of state support provided a decade ago.  Yet the CSU is serving 100,000 more students. To preserve quality and access, and to maintain the resources needed to serve students, the CSU has been forced to take the following actions:

• Reducing CSU systemwide enrollment by 40,000 students in 2010-11; Sacramento State’s enrollment, however, has been properly managed, and the campus is well-positioned to mitigate enrollment reductions.
• Effective Fall 2009, fees for full-time undergraduates will increase by $672 for undergraduate students, $780 for teacher credential students and $828 for graduate students. This increase will be in addition to the $306 fee increase (full-time undergraduate) adopted in May.
• The undergraduate State University Fee will go from $3,354 to $4,026 per year.  Undergrads will pay approximately $4,827 per year, including the average campus fees of $801, which continues to be the lowest fee rate among comparable institutions.
• One-third of the revenue from the fee increase will be set aside for financial aid ($79 million). The remaining $157 million in fee revenue will help offset part of the $584 million budget cut.
• More than 187,000 students will be covered dollar-for-dollar for the increase through a mix of grants, fee waivers and newly expanded federal tax credits.
• The CSU is the largest recipient of Pell Awards. The federal stimulus package increased the maximum Pell Award, and as a result, the CSU will receive an additional $81 million for students. The University has 120,000 students receiving Pell Grants, so that will help a great deal.

How will the CSU plan  affect employees?

Employee salaries and benefits make up 85 percent of the CSU’s operating budget. To manage the deficit, the CSU is forced to reduce labor costs and has taken the following actions:

• The CSU has implemented a salary freeze for executives and a hiring freeze for non-essential positions. 
• The CSU is proposing to furlough its 47,000 employees, including management and executives, two days per month. This reduces spending by about $275 million - preserving 22,000 course sections or 15 percent of classes.

How will the  CSU plan impact operations?

The state budget deficit has required the CSU to curtail construction projects and modify operations as follows:

• More than 130 infrastructure projects on CSU campuses were suspended last December and restarted in April. However, the new American River Courtyard and The WELL, a recreation and wellness center, are proceeding as scheduled because they are not being built with general fund dollars.
• There is still a suspension on lease revenue bond-funded projects, including five that are CSU projects.
• The state budget has not provided funding for increased costs in energy, electricity and other operational necessities.
• The state budget has not provided funding for increased costs in employee health benefits. They have risen by $8.4 million this year.

For more information on how Sacramento State and the CSU are addressing the current budget reductions please visit Sacramento State's Budget Central.