November 10, 2008 Budget
TO: All Faculty and Staff
FROM: Sally Roush
Nov. 10 , 2008
Budget Message #12
On Nov. 6, Governor Schwarzenegger called a special session of the Legislature to consider proposals he has put forth to deal with an estimated $11.2 billion shortfall in the state's revenues. As a result, the California State University has been assigned a third reduction of $66.3 million, in the current fiscal year. SDSU's share of this third reduction would be $5.2 million.
You may recall that at the time SDSU adopted its 2008/09 budget, the Legislature and Governor had not acted on a budget for the state. The budget finally adopted by the state provided $97.6 million more for the CSU than SDSU had anticipated.
When the final state budget was adopted, the President's Budget Advisory Committee recommended, and the President approved, holding centrally the difference between SDSU's planned budget reduction ($12.3 million) and the actual initial reduction ($4.4 million). Shortly after the adoption of the state budget, the Governor imposed a $31.3 million second budget reduction on the CSU. PBAC recommended, and the President approved, absorbing this second reduction of $2.5 million at SDSU from the amount being held centrally.
PBAC will meet on November 20 to deliberate and make a recommendation to the President about this third reduction, if in fact a third reduction is agreed upon and implemented by the Legislature and Governor. The combination of the first, second and third reductions equate to the total $12 million budget reduction SDSU originally planned in June.
This third reduction proposed by the Governor for the CSU is "undesignated," meaning that the CSU can determine how to implement the reduction. The CSU is not subject to the furlough of one day per month and other employee related measures being discussed for state civil service workers, and the Trustees are not proposing that the CSU take a furlough approach. In fact, the CSU will pass on to the individual universities a proportionate reduction without restriction as to how the reduction is implemented.
Pending PBACs recommendation and the President's approval, SDSU could handle this third reduction out of the centrally held funds, without imposing midyear reductions on our operating divisions and departments. However, it is uncertain what the final outcome of the special legislative session will be, so the 3%, 5% and 7% reduction scenarios remain an important planning exercise to be prepared in case we get worse news than we have to date.
Looking ahead, the State of California is being severely impacted by economic pressures nationwide as well as the consequences of not resolving the state's ongoing structural budget problems. The Governor's Department of Finance projects additional revenue shortfalls in fiscal year 2009/10 if the underlying problems are not effectively addressed. SDSU is one of many state supported critical services negatively affected. I urge you to continue your efforts through the Alliance for the CSU, and to remain informed as developments occur.