2011-03-23 "CSU faces worst fiscal situation in its history" by Nanette Asimov from "San Francisco Chronicle" newspaper
About 10,000 students will be turned away, and an untold number of employees will lose their jobs next fall across California State University's 23 campuses.
That was the grim news Tuesday out of Long Beach, where CSU trustees discussed how the university that serves more than 400,000 students will shrink amid devastating budget news from the state.
"We're facing the worst financial situation the CSU has ever had," said Trustee Bill Hauck, chairman of the university system's finance committee.
"It's very sad," said Chris Chavez, president of the California State Student Association and a senior at Cal State Long Beach. "But it comes back to what's being funded through Sacramento."
Under the current budget picture, which will grow worse for CSU if tax extensions backed by Gov. Jerry Brown aren't placed on the June ballot or are voted down, the state will cut $500 million next year from CSU's more than $2 billion allocation.
Those cuts could double if the proposed tax extensions stall, CSU Chancellor Charles Reed told the board.
"A cut of $1 billion in state support would have devastating effects on the CSU," including a long-lasting impact that would damage the state economy, he warned.
Payroll cuts in store
For now, he said, a tuition increase of 15.5 percent approved for next fall will allow the university to limit cuts to $400 million.
Much of that - $250 million - will have to come from reductions in payroll, officials said, noting that CSU has already shed 4,145 faculty members and staff positions through layoffs and attrition since the state's fiscal crisis began in 2008.
"It's sure to be pretty devastating," said Lillian Taiz, president of the California Faculty Association. "There will be many people out of work, and in this economy, that's a nightmare."
A savings of $60 million
The university will save $60 million by preventing 10,000 qualified applicants from enrolling at CSU.
"Not only will students not get a meaningful college education," Taiz said, "but kids who spent their whole high school career preparing for college will find the door slammed in their faces."
At San Francisco State University alone, officials say they expect to have to cut nearly $23 million and are looking at more than a dozen approaches.
"Our campus has been exploring cost-saving options for more than a year now and will implement a series of measures that will allow us to operate within this austere budget," spokeswoman Ellen Griffin said, but provided no specifics.
Reed said he'll also slash nearly $11 million from the budget of CSU headquarters in Long Beach.
How CSU pay compares
Although the budget reductions dominated the conversation Tuesday, the trustees also accepted a report examining how CSU's faculty and campus presidents fare in salary and benefits compared with 20 other public and private universities across the country, from Arizona State in Phoenix to Tufts University in Massachusetts.
They are paid far less on average than their peers, but their health and pension benefits are far more generous by comparison, according to the report by Mercer Consulting, which also produces compensation reports for the University of California.
CSU presidents earn less -
The report on CSU found that its 23 presidents would have to earn 52 percent more in salary and cash incentives to reach the average amount paid to presidents at the other universities. CSU presidents earn $292,830 on average, compared with $444,556 at the other schools. Similarly, CSU faculty members would have to earn 17 percent more to reach the average paid to their peers: $85,083, compared with $99,882.
But the picture changes when looking at health benefits. CSU presidents get 25 percent more in benefits than the average at the comparison universities. CSU faculty also do better, by 21 percent.
Retirement benefits also favor CSU: Presidents top the average paid to their peers by 34 percent, and faculty take home 31 percent more in retirement than the average at the comparison schools.
Generosity in health and retirement over salary may benefit employees in high tax brackets, said Adrian Griffin, assistant director of research at the California Postsecondary Education Commission.
"This raises the question of why other public universities don't do this," Griffin said.
The fact that they don't, he said, "is surprising."