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University Update

University Update

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TO: SDSU Faculty and Staff
 
FROM: Elliot Hirshman, President
Nancy Marlin, Provost

Sally Roush, Vice President of Business and Financial Affairs

August 22, 2011

Budget Update #34

We are writing to update you on the most recent developments in the California budget process and the additional impacts of these developments on our 2011/12 budget. As you may recall, the President’s Budget Advisory Committee recommended, and President Weber approved, a preliminary 2011/12 budget in June. This budget was based on the planned CSU budget reduction of $500 million in state appropriation and additional unfunded mandatory costs. At SDSU, after applying $6.1 million in centrally reserved base budget dollars, this resulted in a $35.3 million reduction to be distributed proportionately across the University’s major divisions.

Subsequent to that action, the final State budget was approved which included an additional $150 million reduction to the CSU. To mitigate the effects of this additional budget reduction, the CSU Board of Trustees voted to increase tuition fees by an additional 12% effective fall 2011. Even with the tuition fee increase the reduction in our state appropriation resulted in an additional reduction of $1.9 million to our 2011/12 budget. Thus for 2011/12 there has been a total reduction of approximately $43 million of which $37 million is distributed to the divisions.

On July 28, PBAC met and unanimously recommended the additional reduction be distributed proportionately across the University’s divisions. President Hirshman approved that recommendation.

Two important aspects of our situation merit comment. First, In 2010/2011, SDSU received an increase of $25 million in state appropriation and tuition fee revenues. Based on careful planning undertaken in 2010/2011, these funds remain largely unobligated and were applied against the current reductions. There remains, however, an additional $18 million in reductions that will significantly impact our divisions this year.

Second, in response to increases in tuition fees, funding of our State University Grant (SUG) program has increased. This program supports access for our neediest students. In 2011/12 funding for these grants increased by $8.5 million, bringing the total program funding to $40.3 million. Through these additional allocations, we have assured that access and excellence continue to be central principles at San Diego State University.

Looking ahead, the 2011/12 budget includes a “trigger” provision related to state revenue estimates. In December, the State Department of Finance will determine whether or not the state’s actual revenues are tracking with the estimates. If the revenues are down by $1 billion, the CSU will be faced with an additional $100 million cut and this will produce an estimated $8.5 million reduction to our budget. In anticipation of this possible reduction, we have accumulated one-time funds, centrally and in the divisions, that we can use to cover the referenced reduction in the current year.

As we review this period, one thing is clear: SDSU has benefitted enormously from the dedication of our university community that has worked together, wisely and well, to advance our core mission while implementing these difficult budget cuts. Despite significant challenges, thanks to the excellent collective work of faculty, staff and administrators we continue to meet the needs of our students, advance our research and creative endeavors, and support our community. Most importantly, we remain committed to the ideals of higher education and our common purpose.

To these ends, we will continue to focus on developing budget strategies aimed a fulfilling those ideals, including supporting the professional growth and development of our talented faculty and staff members. Even with the challenges we face, such investments are essential to the long-term health and welfare of our community. We will be pursuing these plans in the next month and will be sharing specific proposals with the university community during the fall semester. We will continue to share with you any new budget information.