Budget Update, December 20, 2011
Dear Colleagues and Students,
Well, I imagine when you saw a budget message from me this close to Christmas, you must have thought it was really bad news to cause me to interrupt your break to talk budgets. Actually, I have very good news and I just really want to send this before something happens to change it. You see, I don’t think in the 3 years, 1 month, and 15 days that I’ve been president, I’ve ever sent a message with good budget news. I’m almost giddy at the prospect.
First a small disclaimer: As when the budget news was bad, there is still a LOT of baseball left to be played before the state’s budgets are final. Although the state’s revenues are picking up, legislative debates about what cuts should be restored first, the senior property tax exemption debate, and the impact of the Lobato case on K-12 funding each represent places into which our good news could evaporate.
However … the 2nd quarter revenue estimates have just been released and both the Legislative Council and the Office of State Planning & Budgets see significant improvement in state revenues — between $79M and $231M for the rest of this fiscal year (I imagine they’ll use these funds to rebuild state reserves of various kinds) and between $331M and $442M for the upcoming (FY12-13) fiscal year. The FY12-13 fiscal year is what we are beginning to plan for with Provost Miranda’s Strategic Planning retreat and our January Planning & Budget Hearings.
Although nothing has been finalized and won’t be for some time, the Governor’s initial plan is to decrease the proposed cuts to higher education for next year (FY12-13) by 50%, including reducing some of the proposed funding cuts to student financial aid. A rough estimate of the impact of these changes — if they come to pass — on CSU is a savings of $6M. Under the current budget planning, we were modeling a 3% salary increase, keeping tuition increases to 9% for resident undergraduates, 3% for non-resident undergraduates, and 5% for graduate students — all well below the 12% CCHE-approved limits, and a $5.4M E&G (education & general fund) reduction. The roughly $6M impact of the state’s cuts being halved will, I’m sure feature prominently in our campus discussions about budget cuts, salary increases, tuition increases, and how to manage the interplay of all three.
As always, we’ll do everything we can to keep you informed as things move forward, and I encourage all of you to be engaged with our campus planning and budget process.
In the meantime, I hope you all have a peaceful holiday.
Dr. Tony Frank