November 2, 2010
Dear Faculty and Staff members,
I am writing today to provide updated information on the California State University (CSU) system and California State University, Northridge budgets.
On October 8, 2010, the 2010-11 California state budget was approved which, after two years of significant budget reductions, provides partial restoration of funding to the California State University system.
The 2010-11 budget increases the CSU funding by as much as $366 million, with the final amount to depend in part on the CSU's ability to attain an increased enrollment target set forth in the approved budget. The total funding for Cal State Northridge also remains uncertain because the final budget will be linked to achieved enrollment.
This budget also assumes a 10% State University Fee (SUF) increase for the current fiscal year. The CSU Board of Trustees (BOT) took action on the first 5% increase in June 2010, with the remaining 5% originally assumed to be covered by a state "buy-out" proposed by the California Assembly. The buy-out proposal was subsequently not implemented, so the BOT stated its intent to review available revenue at its November 2010 meeting to determine whether an additional fee increase will be needed. The approved budget assumes a 5% mid-year fee increase effective with the Spring 2011 semester.
Before outlining what this means for Cal State Northridge, first a brief summary of last year's budget. The CSU received a $571 million budget cut in fiscal 2009-10 and Cal State Northridge's share was $41 million. CSU student fee increases, divisional budget cuts and enrollment reductions offset $20 million of this reduction. The remaining $21 million was covered by savings of approximately $19 million associated with furloughs and the use of $2 million of reserve funds for the balance. We therefore entered fiscal 2010-11 with a $21 million unresolved budget deficit since furloughs and the use of reserve funds were not permanent fixes. Our initial budget plan for the 2010-11 fiscal year included an enrollment reduction from the CSU of 10.8% and further divisional budget cuts to help bridge this gap.
Based on the approved 2010-11 state and CSU budgets, Cal State Northridge received a revised enrollment target from the CSU (25,461 full time equivalent students), which effectively reverses the previous 10.8% enrollment target reduction. This allows Cal State Northridge to accept all eligible transfer students for the spring 2011 semester. In addition, University divisional budgets will not be reduced from their 2009-10 levels as previously planned based on this level of funding. A revised campus budget allocation for 2010-11 will be developed with appropriate consultation.
Other important budget-related information for Cal State Northridge includes the following:
- Almost two years ago, construction of the Valley Performing Arts Center was suspended for 62 days due to California's cash flow situation. The new budget provides full funding to cover the increased costs associated with that suspension. The Valley Performing Arts Center is nearing completion and we anticipate final construction costs to be slightly under budget thanks to the excellent work of Cal State Northridge staff members and our contractor.
- Pension reform was included in the new state budget which will affect most employees hired after January 15, 2011, but not current employees. The pension reform involves rolling back pension benefits for employees hired in the future to the levels in effect prior to the passage of Senate Bill 400 in 1999.
In closing, the University appreciates the commitment of the Governor and the Legislature to reinvest in the California State University, allowing the 23 CSU campuses to restore student access and to fund support services for students. However, we also remain acutely aware of the continued challenges of the current economy and its impact on the California budget. As such, the University continues to prudently manage the campus budget and maintain campus reserves to prepare us for an uncertain future.
The Campus Budget News website, from which a Budget FAQ is directly accessible, is http://www.csun.edu/campusbudgetnews. This site is also directly accessible from the campus main page. Additional information will be provided as it becomes available.
Sincerely,
Tom McCarron
Vice President for Administration and Finance
and Chief Financial Officer