January 22, 2010 Budget
TO: All SDSU Employees
FROM: Sally Roush, Vice President of Business and Financial Affairs
January 22, 2010
Budget Update #23
On Jan. 8, Gov. Arnold Schwarzenegger proposed a budget for the State of California for fiscal year 2010-11, in the context of a projected $19.9 billion shortfall over the next 18 months. While the total state budget in 2010-11 would decline by 3.7 percent, the governor's proposal for the three segments of higher education (CSU, UC and Community Colleges) restores a one-time cut in the current year and actually increases state funding for higher education in 2010-11 by 3.5 percent or $224.5 million. There are numerous other adjustments to higher education funding related to various federal stimulus funds in both 2008-09 and 2009-10. But it is our understanding that these complex adjustments have the net effect of an increase for higher education.
The proposed CSU share of the $224.5 million higher education increase in 2010-11 is $60.6 million, contingent upon the state receiving significant federal funds. This would mean an increase of approximately $5 million for San Diego State University.
However, the governor's budget proposal is dependent on receipt of $7 billion in specified new federal funds for state programs other than higher education. The governor’s proposal also assumes that CSU will implement a 10 percent increase in the state university fee. There are proposed salary reductions for state civil service employees, as well as a proposed increase in employee contributions to the retirement program. There is no information yet available from the Chancellor's Office on if or how these proposals might affect university employees. We also do not have any information on the possibility of continued furloughs in 2010-11.
The governor's initial budget proposal provides some basis for cautious optimism that there will be no repeat of the drastic funding reductions we have experienced in the current year. However, there are many pieces that must fall into place, and many months of deliberations yet to come. The governor's budget proposal is subject to adoption by the legislature, and is also subject to revision following an analysis of actual tax receipts collected by the state (the "May revise").The California Legislative Analyst has issued a report indicating that the governor's expectation of $7 billion in federal funds is highly unlikely to occur, and the failure of the state to achieve this level of federal support is the biggest threat to the higher education funding increase proposed by the governor; therefore, the possibility to lose the restored funds exists. Our optimism must be tempered with the reality that the decisions facing the governor and legislature will be extremely challenging, and in the end are likely to negatively affect the final state budget for the CSU and thus SDSU.
Our conservative budgeting and planning activities will serve us well in the event that there is another difficult year in 2010-11. As always, we will continue to monitor the budget situation carefully and will update you as information becomes available.