The California State University Employee Update
Friday, October 8, 2010

Legislature Approves Budget that Restores $199 Million to CSU
After a marathon session, state lawmakers today approved a 2010-2011 budget that restores $199 million to the California State University and provides an additional $60.6 million for enrollment growth.

The $87.5 billion state budget, which closes a $17.9 billion gap, now goes to the governor for his signature.

The $199 million restoration to the CSU serves to back-fill part of a "one-time cut" of $305 million made to the university's 2009-10 general fund base. The additional $60.6 million will fund enrollment growth across the 23-campus system. The CSU has been forced to reduce enrollment by approximately 40,000 students since 2008 due to severe budget cuts. The CSU recently announced it would admit up to 30,000 new students for the winter and spring 2011 terms and this additional support will be used to fund that enrollment growth.

The CSU will also receive $106 million in one-time federal stimulus funding which will be used to help the CSU meet its payroll. In turn, the CSU will use monies from state support and student fee revenues previously set aside for payroll to admit new students and restore courses that were previously cut due to budget reductions.

The final budget will increase the CSU's General Fund support to $2.62 billion from $2.35 billion (in 2009-2010), marking the first restoration of state funding to the CSU since 2007.

The state budget also includes pension reform that will affect state employees, including CSU employees, who are hired beginning in November 2010, but does not apply to current employees.

The changes—which roll back pension benefits to levels that existed prior to the adoption of Senate Bill 400, end pension "spiking" and increase transparency—would impact future CSU employees, as well as other state employees. Details of how future employees will be impacted will be communicated once the CSU receives more information from the state.

"We thank the Governor and the legislature for their commitment to reinvest in higher education, and appreciate the increase in state funding support for the CSU," said CSU Chancellor Charles B. Reed. "Like the rest of California, the last two years have been extremely challenging for us, but our mission is to educate the future workforce of California, and despite these ongoing challenges the CSU will continue to provide both access and service to students."

Last year's level of state support was the lowest for the CSU since 1999-2000 ($2.25 billion), and although the CSU will see an increase in state funding, the level of support is still at approximately 2005-2006 levels ($2.62 billion). Despite receiving an increase over the previous year's level of state support, the CSU still faces fiscal obligations including mandatory cost increases such as health care benefits and energy that the general fund increase will not cover.