While Cal State Long Beach is feeling the budget crunch, the California State University board of trustees projected its plan for next year’s budget issues based on this year’s funds at yesterday’s meeting. This was the first board meeting on CSU budget cuts since July 21.
“Going forward in 2010-11, the state’s fiscal situation is, again, challenged,” said Robert Turnage, assistant vice chancellor of budget. “This far advanced, it’s very hazardous to try to forecast the economy.”
Next year’s consensus will be similar to this year’s, where strict budging will be necessary to ensure that enough funding is put aside for CSUs in case the economy does not pick up.
The trustees presented a preliminary budget proposal for the 2010-11 fiscal year. Next year’s budget is expected to be a “recovery” from this year’s budget cut.
The cut, along with a $50 million cut adopted by the Legislature, was part of a $255 million line-item veto passed last February.
In an effort to “recover” more shortages, the trustees’ “Core Compact Recovery” plan calls for an approximate $290 million additionally for the next fiscal year. The total preliminary expenditure framework for next year amounts to about $777 million. This includes $289 million for restoring state support from 2008-09.
Enrollment in CSUs has been reduced by almost 10 percent this school year. The reduced enrollment is expected to continue next school year if state funding falls short again.
Turnage said general funding is a priority. General funds serve as basic necessities for higher education. It funds improvements in student services and education instruction. The trustees are asking for $61 million to fund this service.
A compensation increase of 2.5 percent was also proposed to create a “pool” of funding.
Mandatory costs such as health and energy fees were estimated to be $61 million, and “long-term needs,” such as technology, libraries and facility maintenance, will require about $40 million.
Turnage said a more detailed plan will be proposed in November as an action item.
The last time CSU saw a “normal” funding year was 2007-08, according to Turnage.
CSUs are still hurting from current mandatory fiscal cuts. Currently, in order to alleviate the budget downfall, sacrifices have already been made through furloughs, increases in student fees, increases in non-residential fees and cuts made by individual CSU campuses under each university’s discretion.
The trustees understand the risks with the budget plan and are being cautious in planning future funding.
Robert Eaton, director of CSU financing and treasury, presented budgeting risk-mitigation strategies.
He emphasized the importance of the basic model for risk management, which is to identify potential risks, prioritize potential risks, have a current approach, evaluate where in the CSU system the risks will have the greatest effect and, lastly, to closely monitor the risks once they are detected.
The trustees remain cautious about the instability of the economy.
“We are not out of the woods yet,” said Benjamin Quillian, executive vice chancellor and chief financial officer.