BUDGET MESSAGE - February 20, 2009

To All Faculty and Staff Members,

Earlier today the Governor signed the budget amendment which addresses the more than $41 billion state deficit. This budget plan covers approximately 17 months, the balance of the current fiscal year 2008-09 (ending June 30, 2009) and the fiscal year 2009-10 (ending June 30, 2010).

The budget effect for the CSU system is as follows: The budget is reduced by $97 million this fiscal year, $31 million of which will be restored in 2009-10. This is consistent with the budget proposal made by the Governor in late December. However, if the Federal Economic Stimulus package does not provide a certain threshold of funding to California, the CSU faces the possibility of an additional $50 million budget cut in 2009-10. We anticipate having a better understanding of how this will be determined in the next 45 days.

It is important to note that the entire state budget remains very uncertain. Major pieces of the budget “puzzle” will depend on actions by the voters in a special election being scheduled for May 19th and actual state revenues over the next 17 months will be sensitive to the uncertain course of California’s economy. In other words, we could face further budget cuts.

What does this all mean for Cal State Northridge? The University’s 2008-09 budget already incorporated our share of the $97 million cut, approximately $6.6 million, so no additional budget adjustments are necessary for the remainder of this fiscal year. We will start building our 2009-10 budget based on the approved California budget which will incorporate our share of the $66 million and possible $50 million cuts to the CSU, $4.6 million and $3.5 million respectively. The state budget assumes the CSU Board of Trustees will increase student fees by 10% in 2009-10, the University will absorb additional cost increases such as health benefits and energy costs, and that enrollment will be reduced (at Cal State Northridge by approximately 1,800 full-time equivalent students).

We are still unsure how long it will be before there is sufficient cash flow to resume construction of the Valley Performing Arts Center. Chaparral Hall (Science 5) construction was not halted and remains on schedule to be completed for the Fall 2009 semester.

It is also important to note that the 2009-10 budget, for the second straight year, does not include the $217 million compact funding which would have provided funding for enrollment growth of 2.5%, increases in employee compensation, and other inflationary increases to the CSU’s costs of doing business. Given the realities of California’s economy, this is unfortunate but not surprising.

The Sacramento Bee has a calculator to help estimate how this budget might impact you personally at http://www.sacbee.com/1098/story/1627728.html.

We have faced and endured similar challenges in the past and will do so again. Thank you for your continued efforts and commitment to our University.

Tom McCarron
Vice President for Administration and Finance and CFO