1. CSUB Budget Forum April 2, 2009 Information and Dialogue In the Context of Significant Long-term Reductions in State Funding 1 Horace Mitchell, PhD President President

2. Agenda 2008-09 budget2008-09 budget 2009-10 budget2009-10 budget Federal stimulus and additional reductions for 2009-10Federal stimulus and additional reductions for 2009-10 May 19 ballot measures 1A and 1CMay 19 ballot measures 1A and 1C EnrollmentEnrollment Preliminary campus planningPreliminary campus planning DiscussionDiscussion

3. “The underlying themes of the state’s budget package are complexity and contingency. The balance of the overall package, as well as the condition of the CSU support budget, are affected by interactions between the federal stimulus bill and the state budget, most of the propositions on the May 19 ballot, and continuing uncertainty about state General Fund revenues caused by the precarious nature of California’s current economy.” (Agenda Item 1, March 24-25, 2009) 3

4. 2008-09 State Budget January 2008 – Governor’s ProposalJanuary 2008 – Governor’s Proposal May 2008 – Governor’s RevisionMay 2008 – Governor’s Revision September 2008 – Budget ApprovedSeptember 2008 – Budget Approved October 2008 – Revenue Shortfall Predicted by LAOOctober 2008 – Revenue Shortfall Predicted by LAO December 2008 – State Cash flow ProblemsDecember 2008 – State Cash flow Problems –capital projects shut down –payments to vendors stopped –some Cal Grant payments stopped –cash management measures implemented –State expected to run out of cash by end of February 2009 February 2009 – Budget Agreement ApprovedFebruary 2009 – Budget Agreement Approved −Covers 17-month period through 2009-10 4

5. 2008-09 State Budget Impact on CSU General Fund reduction of $97.6MGeneral Fund reduction of $97.6M No funding for enrollment growthNo funding for enrollment growth No funding for increases in mandatory costsNo funding for increases in mandatory costs Impact on CSUB Budget reduction of $2.1MBudget reduction of $2.1M No funding for increases inNo funding for increases in mandatory costs $1.0M Total impact $3.1M 5

6. 2009-10 State Budget A.Expenditure reductions B.Revenue Enhancements 1.Tax increases 2.Borrowing 3.Revenue swaps C.Contingencies 1.State revenue projections 2.Federal stimulus bill 3.May 19 th ballot propositions 6

7. 2009-10 State Budget Impact on CSU General Fund reduction of $22MGeneral Fund reduction of $22M Additional reduction if stimulusAdditional reduction if stimulus funding not available$50M Potential cut$72M No funding for enrollment growthNo funding for enrollment growth No funding for increases in mandatory costsNo funding for increases in mandatory costs The two-year impact on CSU totals$600M 7

8. 2009-10 State Budget Impact on CSUB Budget reduction of at least$0.5MBudget reduction of at least$0.5M plus possible additional cut of$1.3M Potential cut $1.8M Potential cut $1.8M No funding for increases in mandatory costsNo funding for increases in mandatory costs 8

9. Contingencies 1.State revenue projections (March 2009) $8-10B shortfall and growing $8-10B shortfall and growing 2.Federal stimulus bill (March 2009) $10B allocation criteria not met $10B allocation criteria not met 3.May 19 th ballot propositions To be determined To be determined 9

10. Proposition 1A: Budget Stabilization Act Sales and use tax – extend one yearSales and use tax – extend one year (through 2011-12) (through 2011-12) Vehicle license fee – extend two yearsVehicle license fee – extend two years (through 2012-13) (through 2012-13) Personal income tax – extend two yearsPersonal income tax – extend two years (through 2012 tax year) (through 2012 tax year) Total estimated revenues through 2012-13 = $16B If not passed: $16B hole in current budget plan 10

11. Proposition 1C: Lottery Securitization Borrow $5B in 2009-10 from future lottery profits If not passed: $5B hole in current budget plan 11

12. If Propositions 1A and IC Do Not Pass Impact on State Additional revenue shortfall of $21BAdditional revenue shortfall of $21B in addition to current shortfall of $10B Total revenue gap $31B Total revenue gap $31B Impact on CSU Unknown, but likely to be an additional substantial budget reductionUnknown, but likely to be an additional substantial budget reduction Impact on CSUB Unknown, but likely to be an additional substantial budget reductionUnknown, but likely to be an additional substantial budget reduction Each $20M reduction to the CSU budget will likely lead to a CSUB reduction of approximately $500,000Each $20M reduction to the CSU budget will likely lead to a CSUB reduction of approximately $500,000 12

13. Enrollment CSU over-enrolled by 10,000 studentsCSU over-enrolled by 10,000 students for whom there is no state funding Enrollment reductions planned forEnrollment reductions planned for 2009-10 to reflect budgeted FTES 2009-10 to reflect budgeted FTES No enrollment growth planned forNo enrollment growth planned for 2010-11 2010-11 13

14. Preliminary Campus Planning 1.Current measures to be continued Hiring freezeHiring freeze Salary freezeSalary freeze Expenditures reductionsExpenditures reductions  travel  purchases  contracts 2.Measures under consideration Organizational realignments within divisionsOrganizational realignments within divisions Organizational realignments across divisionsOrganizational realignments across divisions Consolidation of programsConsolidation of programs Consolidation of servicesConsolidation of services Program and service reductionsProgram and service reductions 14

15. 3.Other potential measures To be determined after May 19 th electionTo be determined after May 19 th election 4.Deans and managers are being asked to develop draft 10% budget reduction scenarios for their areas of responsibility 5.Faculty and staff are being asked to suggest budget reduction measures 15

16. Discussion 16