January 17, 2008 Budget
TO: All Faculty and Staff
FROM: Sally Roush, Vice President, Business and Financial Affairs
Jan. 17, 2008
Budget Message #1
President Weber has asked me to brief you on information currently available about the state of California's current year 2007/08 budget, as well the 2008/09 budget. Doubtless you have seen reports in the media that the state of California has a budget shortfall of $3.3 billion in the current year. Governor Arnold Schwarzenegger has declared a fiscal emergency and has convened an emergency session of the legislature to address the problem. Further, reports are that the state will experience a minimum $10 billion shortfall in revenues in fiscal year 2008/09 for a combined deficit of $14 billion over the next 18 months.
The Governor has not recommended a mid-year 2007/08 budget reduction for the California State University. The Legislature is required to act on the fiscal emergency within 45 days of the emergency session opening date. At this time, we do not anticipate a mid-year budget reduction for 2007/08.
On Jan. 10, Governor Schwarzenegger announced his proposed 2008/09 state budget. An informative summary of the budget as it relates to the CSU has been provided by the Chancellor's Office and is available along with other information resources on the SDSU Budget Central website. I encourage you to read that message.
The Governor's 2008/09 Budget proposal is in two parts. First, the Governor proposes to ADD $213.6 million in state appropriation funding to the current CSU budget. Then, the Governor proposes to REDUCE funds to the CSU by $312.9 million for a NET REDUCTION in state appropriation of $99.3 million. In addition to the net reduction of $99.3 million, the CSU has mandatory cost increases for items such as health care, 2007/08 compensation issues and energy in the amount of $114.5 million, resulting in a total CSU negative impact of $213.8 million in 2008/09. SDSU's share of most CSU budget numbers is about 8.5 percent, so our share of the CSU negative budget impact is $18.2 million for 2008/09. This amount would be our 2008/09 budget cut under the Governor's budget proposal.
However, the Governor's budget proposal is based upon some assumptions that must be proven valid before it can be implemented. Current projections regarding state tax revenues must hold. A sufficient number of legislators from both parties must support the Governor's budget, which requires a two-thirds vote for passage. Many things can change before the state budget is finally enacted.
The President's Budget Advisory Committee (PBAC), composed of representatives from the Senate as well as members of the President's Cabinet and Associated Students, gives the President recommendations on budget matters. Additional background about the budget process, including SDSU's internal budget process, is available at SDSU Budget Central.
Because of the emerging budget situation, the President's Budget Advisory Committee has begun early discussions so that we are prepared to bring our best thinking to the process throughout the spring. I hope you will each become familiar with our university budget and stay informed as the budgetary process unfolds. We have an open, deliberative budget process that we will rely upon to develop workable recommendations.
Over the next several months a clearer picture of the state's budget will be known as well as the final effect it will have on the CSU and San Diego State University. It is important that we share information as it becomes available, and that we try to understand the issues and forces that affect us. Our goal is to be prepared to act in an informed manner as the extent of the problems we face becomes known.