State funding support for the California State University will be cut by an additional $100 million for this year, on top of a $650 million reduction already in place, as a result of lower-than-projected state revenues. The additional cut reduces CSU funding to $2 billion and represents a 27 percent year-to-year reduction in state support.
"It is disheartening to say the least when your budget is cut by an initial $650 million, but to face an additional $100 million reduction mid-year makes things extremely challenging," said CSU Chancellor Charles B. Reed. "We were aware that this was a possibility, and our campuses have been planning accordingly. However, the uncertainty of the overall fiscal outlook for the state is not encouraging, and the CSU has run out of good options."
The $2 billion in state funding allocated to the CSU for the 2011-2012 budget is the lowest level of state support the system has received since 1997-1998, but the university currently serves an additional 90,000 compared to that year.
The CSU had previously announced that it will not raise tuition mid-year, even with the additional $100 million cut. To get through the remaining months of this fiscal year, campuses will need to take short-term measures such as drawing on one-time reserves, delaying equipment purchases and facility maintenance work. However, starting with the next fiscal year, extremely difficult longer-term tradeoffs will have to be considered, including the possibility of additional cuts to academic programs or further increases in tuition.
For the past three years, CSU has instituted a number of cost savings measures including decreased enrollment, employee layoffs and furloughs, deferred maintenance, travel restrictions, better use of information technology and other efforts.
In two of the last four fiscal years, state funding to the CSU has been dramatically reduced, forcing the board to approve sizable tuition fee increases. However, increases in revenue from tuition hikes – after setting aside one-third for financial aid – have not kept pace with state funding cuts. For the current fiscal year 2011-2012, tuition increases raised approximately $300 million, but CSU's budget has now been cut by $750 million.