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May 20, 2010. Budget Shortfall Projected in January Budget $(19.9) Special Session Solutions 1.4 Achieved Federal Funding 0.7 Revenue Decline (0.6) Cost.

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Presentation on theme: "May 20, 2010. Budget Shortfall Projected in January Budget $(19.9) Special Session Solutions 1.4 Achieved Federal Funding 0.7 Revenue Decline (0.6) Cost."— Presentation transcript:

1 May 20, 2010

2 Budget Shortfall Projected in January Budget $(19.9) Special Session Solutions 1.4 Achieved Federal Funding 0.7 Revenue Decline (0.6) Cost Increases (0.5) Increase in Reserve (0.2) Projected Budget Shortfall as of $(19.1) January % Total May % Total Expenditure Reductions $ % $ % Federal Funds % % Alternative Funding % % Other Revenues.6 3.0% % Total Budget Solutions $19.9 $19.1 Projected State Budget Shortfall Proposed State Budget Solutions 2 For further details, please see references listed on back page.

3 Recognizes revenues are lower than earlier projections, special session solutions were limited, and federal funding is lower than anticipated Proposes deep expenditure reductions and program eliminations, particularly to social and health care programs Includes wholesale elimination of welfare and child care programs, 60 percent cut in local mental health services, cuts in- home supportive services for the elderly, blind or disabled, large cuts to Medi-Cal, and policy change that could result in early release of some convicted criminals Assumes $1.6 billion of new loans, loan repayment extensions, and transfers from special funds 3 For further details, please see references listed on back page.

4 Continues to make higher education a priority Proposes to restore $305 million ($255 + $50) of the $571 million that was reduced from CSU budget in Proposes to increase funding by $60.6 million for reinstatement of enrollment This funding IS NO LONGER contingent on the receipt of additional federal funding of $6.9 billion for programs outside higher education If either of the funding proposals ($305M and/or $60.6M) survives the legislative process, It would mean a lesser budget cut and enrollment reduction than we are currently planning, but It would not eliminate all budget cuts or enrollment reductions for FY For further details, please see references listed on back page.

5 Republicans in the Legislature were generally complimentary of the proposal, largely because it does not include any tax increases Democrats in the Legislature were highly critical: Senate President Pro Tem Darrell Steinberg: called the proposals “heartless” “[The Democrats] will not pass a budget that eliminates welfare programs at this level. They will not be party to devastating children and families – period” Senate Budget Chairwoman Denise Ducheny: “negotiations over this budget could be long and brutal” “ [the Democrats] are less interested in getting the budget done by the June 30 deadline than in getting it done right” The Legislative Analyst Office assessment: Their view of revenue estimates and overall budget problem are similar to Governor’s view Consideration should be given to alternative spending reductions (such as universities (see reference #5 on page 10 for details), trial courts, public safety) rather than drastic cuts Consideration should be given to adopting selected revenue increases 5

6 CSULB Response to Governor’s May Revise Budget Proposal: Governor’s proposed funding increases for CSU must still survive legislative process and so remain very uncertain at this time There is no information yet as to how the CSU would allocate any additional state funding if received If CSU funding proposal survives, the campus would have a lesser budget cut and enrollment reduction than we are currently planning Because of the great uncertainty of receiving the proposed augmentations, the Chancellor has not amended the direction given to campuses to proceed with original budget planning assumptions 6

7 Unresolved permanent budget problem from $(20,106,543) Recalculation of budget reduction(3,887,400) Enrollment downsizing fee revenue loss (3,044 FTES)(9,554,045) Mandatory costs(1,650,000) State reductions0 Total budget problem$(35,197,988) Enrollment downsizing instructional savings (3,044 FTES)$6,057,560 Revenues from student fee increase (10%)$8,238,239 Revenues from nonresident tuition increase (10%)$1,042,767 Total solutions$15,338,566 Unresolved Budget Shortfall$(19,859,422) 7 Assumptions = no furloughs, some mandatory costs, no state reductions, 10% fee increases

8 Solutions to budget shortfall Operating Divisions % of Budget Pro Rata Reduction Academic Affairs69.6% $11,029,627 Administration and Finance19.0% 3,012,928 Student Services6.1%967,616 University Relations and Development2.7% 433,035 Athletics1.8% 282,677 President's Office0.8% 133,539 Total Division Reductions100.0%$15,859,422 University Wide Anticipated Savings$4,000,000 Total Budget Reductions$19,859,422 8

9 The Governor’s May Revise Budget is as good as could be hoped for the CSU. It appears less likely that we will be assigned budget cuts beyond what has already been anticipated and planned. Therefore, we are not altering current campus planning assumptions. At this time, there is no expectation that furloughs will continue. Any extension of furloughs is subject to collective bargaining. It will probably be September or October before budget is finalized. If additional funding is provided in the final budget, CSULB would expect to open for Spring 2011 enrollment. If no additional funding is provided, Spring 2011 will be closed to all students. 9 For further details, please see references listed on back page.

10 1.Governor’s January Budget Proposal – January 8, LAO Report – Overview of the Governor’s Budget – January 12, Governor’s May Revision Budget Proposal – May 14, LAO Report – Overview of the May Revision – May 18, LAO Report – Budget: Higher Education – February 25,


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