State Budget Agreement Restores Critical Funding for Higher Education

Contact: Clara Potes-Fellow, (562) 951-4800, cpotes-fellow@calstate.edu

(August 2, 2004)—Gov. Arnold Schwarzenegger and legislative leaders have agreed to restore $40.3 million to the California State University to increase enrollment in the 2004/05 academic year, and fully fund previous allocations CSU provided for student outreach, academic preparation and educational opportunity programs.

The initial 2004/05 budget released in January called for $297 million in unfunded mandatory costs and state General Fund reductions at the CSU. The cut forced the CSU to deny access to 23,000 students, make significant cuts in student services and programs, and decrease staff and faculty.

“The higher education compact signed with the governor played a pivotal role in reaching the results we have today. It restored the state’s commitment to funding higher education even during difficult fiscal times, and set a floor for the governor and the legislators to provide additional funding to the CSU,” said CSU Chancellor Charles B. Reed. “Without the compact, which recognizes that the state is obligated to provide sufficient funding per student to provide the courses and quality student services to those students admitted, this funding recovery would have not occurred this year.”

“We want to express our sincere appreciation for the support we have received from the governor and the legislature in addressing the CSU funding priorities,” Reed said. “This funding will allow CSU to enroll an additional 7,500 students in the spring 2005 term and ensure that they receive the necessary support services to be successful at our campuses.”

The final CSU 2004/05 General Fund budget is $2,447,958,000. The budget passed by the legislature includes new student fee revenue of approximately $102 million. This new fee revenue is generated by a 14% fee increase for undergraduates, 20% for teacher credential students and 25% for graduate students. The $40.3 million restoration includes $33.3 million for a 1.87 percent enrollment increase (7,500 students). In addition, the CSU will receive $7 million to restore funds to academic preparation programs. This still leaves a total net cut to the CSU of roughly $157 million in unfunded costs and General Fund reductions for 2004/05, which includes the elimination of funding initially provided for counseling services to freshmen redirected to community colleges.

“We had discussed with the 23 campus presidents the possibility of receiving additional enrollment funding and have been assured by all of our campuses that we can accommodate these students in the 2004-05 academic year,” said Richard P. West, CSU executive vice chancellor and chief financial officer. “With the budget approved by the governor and the legislature, the CSU can admit eligible students who apply by the specified admissions deadlines. Most of the additional 7,500 students included in the final budget will enroll at our campuses in spring 2005.”

CSU students will also benefit from the restoration of 5,400 competitive Cal Grant awards that were reestablished as part of this budget agreement. The new budget rejects a $5.4 million reduction in competitive Cal Grant awards included in the governor’s budget proposal, and restores $22 million to the Cal Grant Program for student access at private universities.

In addition to this budget agreement, the CSU is planning to admit another 10,000 students in the 2005-06 academic year, based on the higher education compact agreement with the governor. Under the compact, the CSU also will receive an increase of 3 percent to the CSU’s state General Fund base budget to fund mandatory costs and faculty and staff compensation.

“The compact’s long-term funding will allow our campuses to plan enrollment growth consistent with our goal to restore student access to the levels called for in the Master Plan for Higher Education,” Chancellor Reed said.

The California State University is the largest system of senior higher education in the country, with 23 campuses, approximately 409,000 students and 44,000 faculty and staff. Since the system was created in 1961, it has awarded about 2 million degrees, about 77,000 annually. The CSU is renowned for the quality of its teaching and for the job-ready graduates it produces. Its mission is to provide high-quality, affordable education to meet the ever-changing needs of the people of California. With its commitment to excellence, diversity and innovation, the CSU is the university system that is working for California. See www.calstate.edu

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Last Updated: August 2, 2004

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