Budget Message

Proposed State Budget Funding Cuts and Impact on CSU Long Beach

Governor Arnold Schwarzenegger’s May revision of the State budget restored $97.6 million to the California State University, reducing the $386 million gap in the state funding initially anticipated for the 2008-09 budget.

Even under the improved proposal, however, the CSU still faces a $288 million shortfall and serious fiscal challenges, as well as $124 million in mandatory cost increases for which no general fund resources exist.  These are additional expenditures that the CSU must make in 2008-09 to meet various obligations.  The proposed budget furthermore fails to fund $73.2 million necessary to avoid raising student fees by 10 percent for the 2008-09 academic year.

The proposed budget reduction – which comes in addition to $522 million in funding cuts between 2002 and 2005 – means that CSU will be unable to provide access to 10,000 qualified students. All CSU campuses have closed enrollment for first time freshmen as of March 1.

Considered the “economic engine” of California, the CSU returns $4.41 to the California economy for every $1.00 invested by the state. In addition, the CSU plays a major role in the state’s workforce in the areas of nursing, teaching, agriculture, business, public administration, and technology. It graduates 90,000 students each year, including 87 percent of education graduates, 64 percent of nurses, 65 percent of business professionals, 82 percent of those involved in public administration, and more than half of the state’s graduates in agriculture-related fields. As an example of the CSU’s impact, it is estimated that California will need 47,000 additional nurses by 2010 just to keep up with demand.

At the CSU’s current rate of economic return, the proposed budget cuts to CSU would remove more than $1 billion from the state’s economy as California leaders grapple with an ongoing budget deficit. The cuts would mean larger class sizes, less student support, and less course sections, resulting in students taking longer to graduate.

The negative impact on student access would fall disproportionately on students from underrepresented communities, erasing recent gains made in college enrollment by students from these communities. For 2008, freshman applications to CSU for Latinos are up by 21 percent and African Americans by 11 percent over previous years.

Although it is not yet known what the specific budget impact would be on CSU Long Beach, it is estimated that it would be $8.6 million to our current budget. This would affect every aspect of the campus from compensation to student rates of graduation. CSU Long Beach will be unable to accommodate 1000 qualified students in the 2008-09 academic year as a result of the proposed budget cuts.

CSU Long Beach provides an important contribution to the California economy, graduating over 8,066 students a year, including 668 teachers, 275 nurses 439 engineers and 375 scientists each year.

Locally, CSU Long Beach generates a total economic impact of $1.024 billion to the regional economy. This impact sustains 17,222 jobs in the region, and generates more than $64.8 million per year in tax revenue.