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Budget Central

July 9, 2012 new

President's Letter to the Campus Community

Dear CSULB Faculty and Staff:

Recently Governor Brown approved the 2012-13 state budget. As anticipated, the budget continues to rely on the expectation that voters will approve temporary tax increases at the ballot box in November 2012. If the November tax initiative is not approved by the voters, the CSU would be subject to the previously announced trigger reduction of $250 million in January 2013. This further reduction—added to the unprecedented $750 million reduction made during the last fiscal year—means that state support for the CSU would be cut by $1 billion, or 35 percent over the past 24 months. In other words, CSULB would go from receiving 42 percent of our revenues from the state of California to less than 20 percent in two short years. These cuts would also place California at pre-1965 funding levels when measuring state investment effort for public higher education per $1,000 of state per personal income.

An important late development in the budget package is also a delayed tuition fee “buy out” for the CSU and UC. This “buy out” would provide additional state appropriations of $125 million to each university system under two conditions: (1) the governor’s tax initiative must be passed and enacted, and (2) the university must reset its tuition fee rates for the 2012-13 academic year back to the levels in effect for the 2011-12 year.  However, the additional $125 million in state appropriations are for the 2013-14 fiscal year, not the 2012-13 year. Since the CSU has already implemented a tuition fee increase for 2012-13, the Board would have to rescind the previously approved tuition fee increase of $498/year effective Fall 2012. While the $125 million base appropriation in 2013-14 would cover the majority of the ongoing loss from resetting tuition fee rates to 2011-12 levels, it would not compensate for the one-time $125 million hole in the CSU’s operating budget for 2012-13.

It is expected that the Board will discuss whether to rescind the Fall 2012 tuition fee increase at the July Board of Trustees meeting, but no decision is expected until the September Board meeting. While campus efforts to improve operational efficiencies and evaluate administrative services and programs will continue, the magnitude of these reductions requires some decisions and directions by the Board.

On a more positive note, I am pleased to announce that the federal government has voted to extend the previously lowered student loan subsidized interest rate at 3.4 percent. If you recall this rate was scheduled to double to 6.8% on July 1 if nothing was done to extend the lower rate. The extension is for one year, and we will no doubt hear much more about this issue in the late spring of this coming year. Furthermore, the proposal to raise the grade point average requirement for new Cal Grant recipients in 2012-13 was not included in the final state budget. However, approximately 50,000 CSU students are affected by the reduction of the Cal Grant B access award from $1,551 to $1,473, a reduction of $78 per recipient.

Unfortunately, Californians everywhere will be affected by these massive educational reductions. The quality of our future economy in California is directly related to the educational investments that are made in support of our children and higher education students. Your support in these matters has never been needed more than now.

We will share any new information with you as soon as it is made available.  Thank you for your commitment to our students and CSULB.

Go Beach!

F. King Alexander
President

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