Proposed budget could add funds, cut programs

Staff Reports
The Collegian

The California State University system could see a nearly $300 million increase if Gov. Arnold Schwarzenegger’s budget is adopted.

The increase would fully fund the trustees’ budget request for 2007-2008.

After three years of cuts in the budget that resulted in a $500 million loss to the university system, Schwarzenegger’s proposed budget touches on crucial funding issues the CSU system faces.

An assumed $123 million in student fee revenue is included in the governor’s budget, which will come from the anticipated 2.5 percent enrollment growth, and increasing student fees by 10 percent.

“We believe that the fiscal benefits of many of the budget’s key proposals are overstated,” Legislative Analyst Elizabeth Hill wrote in her annual critique of the spending plan, kicking off months of negotiations in the capital. “While any budget is subject to risks and uncertainties, we believe that the number and magnitude of these risks is unusually high.”

Hill said Schwarzenegger’s budget depends on uncertain property tax revenue increases and income from a housing market on the rebound in the second half of the year

Richard Raphael, executive managing director and head of state ratings for Fitch Ratings in New York, said the governor’s budget does not reduce spending as much as it appears on the surface.

While the governor’s budget will provide $4.3 billion for the CSU system, it will also include a $7 million cut from funding currently used to support CSU campus-based outreach programs.

CSU Chancellor Charles B. Reed said in a press release there are concerns over the reduction in outreach programs.

“We will renew our efforts with the Governor and the legislature to demonstrate the overwhelming benefit of Outreach Programs on student success to graduation,” Reed said.

Some of the other highlights of the CSU budget include $28 million for health care benefit increases, $77.9 million for a student enrollment increase of 11,000 students (a 2.5 percent growth) and $38.8 million for State University Grants and financial aid that can match the growing number of students and student fees.

One CSU request not met was an additional one percent funding for a plan stretching over several years to reduce the salary gaps between CSU employees and national standards.

Priorities for CSU funding were developed largely from focusing on long-term goals and needs of the university, and meeting with members of the Board of Trustees, CSU Academic Senate representatives, campus presidents and members of the System Budget Advisory Committee.

Over the next several months, the governor’s budget will be reviewed. The official deadline for budget adoption is June 15. An executive summary of the 2007-08 Support Budget can be accessed at http://www.calstate.edu/budget/2007_08budindex/supportbdgt_book1/support_budget1.pdf.

Associated Press writer Aaron C. Davis contributed to this report.

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