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University Update

University Update

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November 15, 2012

University Update

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

Vice Presidents Sally Roush, Mary Ruth Carleton and James Kitchen

The passage of Proposition 30 results in two important changes which affect SDSU's fiscal year 2012-13 operating fund budget.

First, the university began this fiscal year with the conservative assumption that Proposition 30 would not pass. Under this conservative approach, the university planned to absorb a budget reduction of $18.5 million in the current fiscal year. We took this conservative approach to avoid the disruptive outcome of being forced to implement a large budget reduction at mid-year. With the passage of Proposition 30, the CSU has rescinded the referenced budget reduction.

Second, in September, the Board of Trustees approved a retroactive tuition reduction of 9% contingent upon the passage of Proposition 30. Given the passage of Proposition 30 and the retroactive tuition reduction, our tuition revenue will be reduced by approximately $14.1 million in FY 2012-13. While we did not anticipate this reduction in our tuition revenue at the outset of the fiscal year, this unexpected outcome again demonstrates the importance of taking a conservative budget approach in the current fiscal and political environment.

Given these outcomes, and after adjustments for institutional obligations (e.g. State University Grant and unfunded mandates), SDSU will have approximately $5 million available in the current fiscal year. It is important to remember that the university took a $6.2 million base budget reduction centrally to reduce the divisional budget reductions and addressing this obligation is a priority. The President's Budget Advisory Committee (PBAC) will meet on November 15 to discuss a recommendation for a revised budget for this year. Action recommended to and approved by the President will be reported in our next university budget update.

While many unknowns remain, we are cautiously optimistic that our financial circumstances will improve in FY 2013-14. Once a more definitive picture emerges and our strategic plan is finalized, PBAC will begin discussions about the 2013/14 budget and ways we can invest in the priorities recommended in the strategic plan.

As always, we are grateful for the dedicated efforts of all members of the university community as we strive to maintain and strengthen our programs during this challenging time.