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It's early November and we are well into the 2009-2010 fiscal year here at Cal State Northridge. Many, many of you have, over the last weeks and months, asked me when we're going to know specific information about the 2010-11 budget year. You want to know when we're going to have information in order to plan better and make decisions in your department. You want to know when we're going to have information so that you can understand the consequences here at Cal State Northridge.
I'm going to try to provide for you a description of the timeline by which we hope to know something concrete for the 2010-11 year, and more importantly, I'm going to provide for you information about our planning efforts here at Cal State Northridge.
Well, let me begin by very briefly reviewing the budget situation for 2009-10, because that lays the foundation for us, for our plans for 2010-11.
If you go to the campus budget website, you will see these numbers. The campus experienced a $41 million reduction for this fiscal year. We addressed this reduction in the following ways. $19 million in one- time -- very important, one-time -- savings from the budget furlough program that most employees are experiencing. We also garnered $13 million in additional revenue from the student fee increases that the Board of Trustees approved. That left $9 million for the campus to take as additional budget reductions. $2 million of that came from the campus reserves. $7 million was allocated on a pro rata basis across the divisions.
We also reduced a fair amount of dollars this year by a 3,000 headcount reduction in our student enrollment. So obviously, functions directly associated with those students -- teaching of classes through the hiring of part-time faculty, hiring of additional individuals to help with services to students -- were obvious places that the campus made reductions.
Each Vice President in the University in his or her own division has made appropriate reductions. They're pretty obvious. They've stopped expensive purchases. They've held positions vacant if somebody leaves. In many cases they are simply not filling those positions. They have also stopped doing some new projects and have not taken on some additional projects in order to conserve dollars.
Within each of their divisions they've made these choices and these decisions, but I also want to assure you that the Vice Presidents across the university have kept each other informed in order to be sure that a budget reduction in one division didn't cause unanticipated consequences in another division of the University.
So that's the 2009-2010 year.
We now turn to thinking about 2010-11 and 2011-12, and I will say that we approached that planning with very little concrete information and considerable ambiguity.
The timeline for the preparation of a campus budget is usually triggered by the first salvo in the development of the State budget, which is in January when the Governor releases his budget message, which is a set of recommendations that he makes for the State for the following year. So this January, Governor Schwarzenegger will make his budget recommendations for the State for the 2010-11 year. That's oftentimes a very, very good predictor of where the CSU and ultimately Cal State Northridge will end up at the end of a pretty long budget process.
Between January and May, of course, there is analytical work and there is political work that goes on with respect to the Governor's budget recommendations. In May, the Legislature and the Governor turn in earnest to the development of a final State budget because the Governor, at that point in time, issues a revision to his budget recommendation that is based on the accurate, or more accurate I should say, revenue projection for the State. That then becomes the basis, this May revision, for final action by the Legislature, and in theory that budget is finalized at the end of June. In reality those budgets are not typically finalized until later in the summer.
We don't know a lot about what the Governor is going to recommend in that budget yet. We do know that his Director of Finance has indicated that the State will in all likelihood, in a best-case scenario, enter the deliberations for the 2010-11 budget with at least a $7.5 billion deficit. That becomes pretty important to us at Cal State Northridge as we look at the future and our planning for 2010-11 and 2011-12.
Again, let me say we are planning for 2010-11 and 2011-12, but we are doing so with very little concrete information and considerable ambiguity about what in fact is going to be the reality of our budget.
There are a couple of key figures that I want to lay out for you. First, and most importantly, we have $19 million that were one-time savings for the campus this year. So we must begin any planning with the recognition that the campus budget must be reduced by minimally that $19 million.
In addition, we know that we've got almost an 11% reduction in enrollment that we're going to take, mandated by the Chancellor's Office. That translates into a loss of $11 million dollars in student fee revenue that the campus would have if we had that additional enrollment. So, if you're adding, that is 11 and 19, that is $30 million at a minimum that we have to look to account for in our planning for the 2010-11 budget year.
Now there are multiple ways in which that $30 million is affected. There is a possibility that the Board of Trustees will increase the student fees, which would then bring additional revenue to the campus. The Board is going to consider a proposal at its board meeting shortly here in November in which they are going to ask the State of California to provide new money equivalent to what would be a 10% fee increase. If the campus would get that additional money that would ironically just about offset the $11 million dollar loss in fees that we're going to have from the reduction in our enrollment.
Now, you'll probably note that I've said nothing so far about the possibility of additional reductions from the State of California to the CSU and to Cal State Northridge, and we must also consider that as a very, very real possibility.
So, if you're tracking this very complicated maze of possible reductions and possible revenue increases, you know that we are looking at, in the very, very best-case scenario, $19 million dollars as a reduction, and you can figure out pretty easily that we can be looking at a number of other scenarios in which there are far deeper cuts that are given to us here at Cal State Northridge.
So, the situation: uncertain in terms of information, highly ambiguous.
The reality however is that we must plan now. We can't wait until June or July or August. We can't even wait until January, when the Governor's budget message is issued, to begin to plan for how Cal State Northridge will manage the 2010-11 and 2011-12 budget.
So, the Vice Presidents of the University are working at this point to plan for our budgets using multiple scenarios. We, of course, hope that that best-case scenario is the one that we are actually going to be implementing. But the reality is that this campus will be in much better shape if we also consider the alternatives which are less positive for us but will allow us to have a plan that we can implement in a far more orderly and careful way if, in fact, the budget reductions, or the budget scenarios that are actually given to us, are more difficult than the best-case scenario.
So, we're planning. That's a really important message to all of you. And we're looking at different ways in which the campus can reduce its expenditures.
Many of you participated, in fact, in one of the ways in which we have asked you to help us plan for the future. We had a Campus Budget Suggestion webpage that a lot of people on the campus offered us suggestions to consider.
There are quite a few of these suggestions, and as we said when we began that process, we are really not able to respond to every single one of the suggestions that have been given to us. But we are going to put a summary of those suggestions up on the budget webpage shortly, and I urge you to have a look at them to give you some idea of the types of suggestions that we received.
There are many that involve actions by individuals, such things as simple as turning off the lights when you leave your office, or you leave your classroom, at the end of the day.
There are also suggestions for departments. For example, instead of buying multiple printers, have one major copy machine, move all your printing to that copy machine, so that you don't have the expenditure of the hardware. And there's also some information that that is a more economical way to make copies.
There were also a lot of suggestions at the University level. At the University level, for example, many individuals suggested modifying our utilities so that our electrical system shuts down, for example, when we leave a room, or that we don't water as often as we have been.
For those suggestions that need to be implemented at a department level, they have been sent to the appropriate Vice Presidents for action and follow up. For those suggestions that can take place at a University level, we of course are looking at whether or not there is any cost to implement those suggestions and whether or not we have any other barriers or obstacles in order to try to achieve the savings that individuals think we might achieve. But these suggestions have been very, very, very, very helpful.
Now the question on most of your minds is really around the furlough program and whether or not the campus will need to move to layoffs. So, let me proceed to very carefully try to address what I heard in my conversations with many of you about your concerns.
Let me start with the furlough program. The furlough programs that we have had this year were intended to be a one-time 2009-2010 program to produce one-time savings, giving each campus in the CSU the opportunity to make considered judgments about how to reduce their base budgets.
If there is going to be a furlough program for anybody in the CSU for the 2010-11 year, that would have to be negotiated at the request and initiation of either state-wide union leadership and/or the Chancellor's Office. There are a couple of important things to know about a potential furlough program. And that is that it cannot be imposed unilaterally by the Chancellor. Those programs must be and would be negotiated at the system level with representatives of labor as well as the Chancellor's Office. In addition, it is really important for me to say to all of you, Cal State Northridge cannot, no campus in the CSU can, implement the furlough program on its own.
Then, on to the more difficult question and concern about layoffs. You know that my core value is to protect as many jobs here at Cal State Northridge as we can. It's a core value that I have. It's a core value shared by the leadership team here at Cal State Northridge. And I can assure you that in making our decisions we are going to be guided by that core value.
I also have to say that I can't make promises, simply because I don’t have enough information. We don't have enough information about whether or not the campus will have additional reductions for next year. We don't know whether or not we are going to have additional revenue.
So, I offer you the description of our values, my commitment to try and act on those values, but with the qualifier that the State budget situation presents so many unknown factors to us at this point that we're going to have to wait until we have more concrete information as we move forward.
I want to say that I recognize that this has been a very, very difficult time for everybody associated with California State University, Northridge. The increased fees that students have had to pay, the furloughs that almost all of our employees have experienced, the budget reductions we have had to take across the University and, probably most importantly, the uncertainty and the anxiety about our future, contributes to a very, very trying and taxing set of circumstances for all of us.
I want to thank you for being willing to stick with this University, your jobs, but most importantly our commitment to the students who go to Cal State Northridge. That's really, I think, what keeps all of us going as we work our way through this very, very ambiguous and difficult period of time in the University.
I thank you for your work. I thank you for your patience and willingness to endure the anxiety. I look forward to someday in the future when the budget messages that I can deliver are far more upbeat, optimistic and frankly even more specific in terms of what it is Cal State Northridge is going to have in terms of its resources.
We're going to move through this year with confidence, with a commitment to the University. We're going to use our regular consultation processes and governance groups to make sure that the campus community has an opportunity to comment.
Most importantly I would say to you, thank you and move forward with me and others here as we fulfill the mission of California State University, Northridge.
Thank you so much.