June 12, 2009 Budget
TO: All SDSU Employees
FROM: Sally Roush, Vice President of Business and Financial Affairs
June 12, 2009
Budget Update #17
In the previous budget update, published at the time of the Governor's May 14 budget revision, our preliminary estimates were that SDSU's budget reduction could be as much as $22 million. We have refined this number to be $20.4 million to address the reductions contained in the May 14 revise.
However, following the failure of ballot measures 1A through E, the state Legislative Analyst's Office and the Department of Finance have agreed that the state actually faces a statewide gap in excess of $24 billion. The Governor recently presented the Legislature a new budget proposal with solutions consisting entirely of budget reductions, including additional reductions to higher education. As a result, the California State University Chancellor's Office estimates the system is now facing a budget reduction in 2009/10 of as much as $583.8 million.
Clearly, this is a sobering prospect.
As you know, California's budget must ultimately be adopted by the Legislature. It is often the case that SDSU must adopt a budget prior to the final state budget being approved. This year is no exception, but the challenge is considerably larger as the range of possible state budget outcomes is much greater. The President's Budget Advisory Committee (PBAC) and the Senate Committee on Academic Resources and Planning have both met and reviewed the information we currently have. Committee members are in agreement on the importance of taking action to address our budget situation. On June 11, PBAC voted on a recommendation to the President to address an SDSU budget reduction of $20.4 million, with the realization that an additional reduction is a virtual certainty. The President has approved the recommendation, which assigns the $20.4 million budget reduction across the university's divisions based on each division's proportion of total operating costs (excluding such institutional items as financial aid, liability insurance and utility expenditures).
As state budget deliberations continue, many things can come to bear on the final budget outcome, either positive or negative. PBAC will be convened as needed as state budget details emerge, and if necessary will issue a revised recommendation to the President when the state's budget is complete.
To be prepared for possible further budget reductions, the CSU has initiated changes to Title 5 of the California Code of Regulations for management, executive and non-represented personnel to modify provisions related to furloughs, salary reductions and unpaid holidays. The timing of this change is to meet a 45-day notice requirement should action be needed at the July 21 CSU Board of Trustees meeting. These changes establish tools that could be used to help minimize further budget reductions; but until we know the full extent of the problem, we do not know if it will be necessary to rely on these measures to meet SDSU's additional budget reduction requirement.
Our commitment to provide a quality education for our students remains our highest priority in the face of the daunting challenge before us. I remain confident SDSU will meet this challenge by continuing to work together for the better good of our students, faculty and staff. During a previous budget reduction, the University Senate adopted some principles that still express and guide our actions today.
I am confident in the value of that advice for the period ahead.