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California Association of Private Postsecondary Schools

Cal State Ponders 2 Paths to Deal With Possibly $250-Million More in Cuts

07/17/2012

The Chronicle of Higher Education - July 16, 2012 - by Lee Gardner

Preserve access or preserve price: Those are the options the California State University system's Board of Trustees faces to deal with a possible $250-million reduction in state funds for the coming year, according to the university's assistant vice chancellor of budget, Robert Turnage.

During a news conference on Monday, Mr. Turnage previewed details of two contingency plans, prepared by the board's finance committee, that will be presented to the trustees at their bimonthly meeting on Tuesday. Both options will lead to substantial cuts, Mr. Turnage said, and both options are "unpalatable."

"Given the stresses that have already been created by prior cuts to this university, the easy choices are gone," Mr. Turnage said. If a state ballot measure to raise income and sales taxes fails in November, the Cal State system would face a $250-million "trigger cut," which would present the system with a "huge challenge," Mr. Turnage said. An additional $250-million cut would lower total state support to the Cal State system to $1.8-billion, down from $3-billion in the 2007-8 academic year, a 39-percent drop in just five years.

The state's three-tier higher-education system, including the University of California system and the California Community Colleges, faces a combined $800-million in cuts if the ballot initiative fails.

The options were devised in part after the board's finance committee projected this year that a 3-percent reduction in enrollment—about 12,000 students—would be necessary if the ballot measure failed, Mr. Turnage said.

Preserving access for the more than 339,000 full-time students projected to enroll in the 23 Cal State campuses in 2012-13, as well as for students in 2013-14, would require the Board of Trustees to propose a resolution at its September meeting calling for a fee increase to take effect if the ballot initiative fails. The "trigger on a trigger" increase would add about 5 percent, or about $150, to the system's fees per full-time student each semester, effective in the spring of 2013. The preserving-access option would also require a 2.5-percent cut in pay and benefits to Cal State faculty members and other employees systemwide, Mr. Turnage said.

The preserving-price option would keep fees at current levels for the next two years but would lead to cuts in enrollment, staff, and pay and benefits, Mr. Turnage said.

Enrollment would be lowered by 1.5 percent—about 6,000 students—beginning in 2013-14, but "what reduces your expenditures is having fewer people employed," Mr. Turnage said. The preserving-price option calls for 750 employees to be let go systemwide, Mr. Turnage said. Remaining employees would face a reduction in pay and benefits of 5.25 percent.

Mr. Turnage acknowledged that any change in the status and conditions of employees would "require collective bargaining," making the timing of any proposed cuts "hard to predict."

Both options have other cuts and adjustments in common, including a 9-percent increase in fees for out-of-state and foreign students.

The Board of Trustees will consider the proposals after their presentation on Tuesday, and will vote on a course of action at its next meeting, in September, the last scheduled meeting before the November 6 election.

"We have reached the point where it's nothing but difficult trade-offs," Mr. Turnage said. "We'll have budgetary problems in the next year even if the thing passes, but at least our prospects for improving in the next few years and being able to restore enrollments are going to be served well."