Budget FAQ 2010

Q1: How much of the CSU budget comes from the State General Fund?
A1: The CSU receives about 70% of its operating budget from the state’s General Fund. The rest of the operating budget comes from a variety of sources, including parking fees, student health center fees, housing, grants, and alumni contributions.

Q2: What is the latest information on the FY 2010/11 state budget?
A2. In January, the Governor presented his proposed state budget, designed to deal with a projected deficit of $18.9 billion in FY 2010/11. The deficit includes $6.6 billion in the current budget year (FY 2009/10) and $12.3 billion in FY 2010/11. The Governor is proposing a budget reserve of $1 billion, which is why the projected deficit is often reported as $19.9 billion. In the spring, the legislature will begin to deliberate on the Governor’s proposed budget, with the new fiscal year set to start on July 1.

Q3: How is the Governor proposing to deal with the deficit?
A3: The Governor hopes to receive $6.9 billion in new federal funds. He is also proposing $8.5 billion in spending cuts and $4.5 billion in fund shifts and other revenues. Rather than continue three-day-per-month furloughs for state civil service workers, he’s proposing to cut state worker pay and benefits by $1.6 billion:

• Reduce state civil service pay by 5 percent (this does not apply to CSU employees)
• Increase state civil service retirement contributions by an additional 5 percent of salary (this does not apply to CSU employees)
• Reducing state employers’ contributions by an equal amount (this does not apply to CSU employees)
• Requiring state departments, other than constitutional offices, to reduce personnel costs by 5 percent by July 1, 2010 (this does not directly apply to the CSU, but the Governor has asked the CSU to do the same)
• Reduce costs for state employees’ health coverage by contracting directly with a lower-cost health insurance provider or PERS, effective January, 2011 (this could affect CSU employees)
• Use the savings generated by this shift to “pre-fund” retiree health care costs

Q4: How does the Governor's budget proposal affect the CSU?
A4: Governor Schwarzenegger’s proposal is a step in the right direction, as he’s proposing to restore $305 million of the one-time cuts made to the CSU budget in FY 2009/10. In addition, he’s proposing $60.6 million for increased student enrollment of 2.5%, contingent on a federal stimulus funds trigger. There is also $11.9 million for technical adjustments. This would provide a total of $377 million for the CSU. As CSUEU President Pat Gantt wrote in a letter to CSU Chancellor Reed on January 21, 2010, "the proposed restoration of $305 million is a significant step to move the CSU system back to the funding level that it rightfully deserves."

Q5: How likely is it that California will receive enough federal stimulus dollars to obtain the $60.6 million for enrollment?
A5: Unlikely. As even the state's legislative analyst has stated, "The likelihood of Washington agreeing to all of the governor’s requests is almost non-existent."  On February 1, 2010, President Obama proposed a $3.8 trillion federal budget, which provides only about $1.5 billion to California.  The California Department of Finance called it "a down payment on what California is owed." According to the governor's budget, if federal funds do fall short, the following draconian cuts would be triggered:

• The elimination of in-home supportive services (IHSS) to 430,000 low-income disabled and elderly Californians
• The elimination of the Healthy Families program, which provides healthcare to nearly one million low-income children
• The elimination of CalWorks, the state's welfare program, which provides cash assistance, employment services and childcare to low-income families. More than 1 million children and approximately 310,000 parents would be affected
• An additional 5% cut in state civil service employee salaries
• No funding for additional student enrollment at CSU or UC

Q6: Would the restoration of $305 million to the CSU's budget mean that there would be no need for furloughs or layoffs in FY 2010?
A6: [Updated March 30, 2010] Chancellor Reed has provided no clear guidance on this question. In FY 2009/10, the CSU determined that $275 million would be saved by furloughs and reductions in the workforce. CSUEU President Pat Gantt wrote a letter to Chancellor Reed on January 21, 2010, asking whether the $305 million restoration would be enough to remove the need for furloughs and prevent the threat of systemwide layoffs for FY 2010. On February 5, he received a response on behalf of Chancellor Reed that provided no detail on the $305 million; presumably the CSU needs more time to evaluate potential impacts. In the meantime, three chapters have received layoff notices. CSUEU’s current agreement with the CSU for two furlough days per month expires on June 30, 2010. Depending on what happens with the CSU budget, CSUEU will survey our members to determine whether or not we bargain a new furlough agreement for FY 2010.

Q7: What will it take for that $305 million in funding to be restored to the CSU budget?
A7: Between now and July 1, the legislature will no doubt engage in a long, arduous budget fight. The CSU doesn’t know now, and probably won't know until at least May 15 or later, whether the CSU will receive the $305 million. It is clear that the lobbying efforts of CSUEU, CFA and the entire CSU community have paid off in convincing the governor and many legislators of the importance of the CSU. CSUEU members and their allies now need to work vigorously to continue to tell the story about the value of the CSU to the state of California. Participate in ongoing lobbying efforts in support of funding for higher education.

Q8: What happens if the CSU receives less than the $305 million in restoration funds?
A8: We likely would be looking at the strong possibility of layoffs (beyond the three chapters that have already received notices) and/or considering the possibility of negotiating furloughs for an additional year. For this reason, we need to take action in support of adequate CSU funding.

Q9: What do polls show about public support for higher education?
A9: The latest poll conducted by the Public Policy Institute of California shows that 65% of California's likely voters oppose further cuts to higher education. Fifty percent would pay higher taxes to support current funding for higher education. Two-thirds of Californians would pay higher taxes to avoid cuts in K-12 education.

Q10: What caused the budget mess we are in today?
A10: Many point both to Proposition 13, which froze many forms of corporate and residential property taxes, and to the two-thirds requirement to pass a budget, which makes it easier for legislators at the ideological fringes to hold up any budget agreements. But there are many other potential explanations. For instance, at a budget briefing sponsored by the Public Policy Institute of California on January 28, 2010, Senator Denise Ducheny explained it this way: California’s structural budget deficit was created in 2003, when Governor Schwarzenegger cut the vehicle license fee (VLF), which accounts for $6 billion in lost revenue each year.

Q11: What is the process for the adoption of a state budget?
A11: It begins every January with the Governor’s budget proposal. The budget bill is not final until it is voted on and passed by both the Assembly and the Senate and signed by the Governor. The deadline is supposedly June 30 of each year, but often that deadline slips by several weeks.

Q12: When will we know if further layoffs are needed?
A12: After campuses learn what their budget targets are, we should be better able to answer this question. CSUEU is in constant contact with the Chancellor's Office regarding budget and layoff-related issues.

Q13: Who decides if a layoff is needed?
A13: The final determination is made by each campus president at the 23 campuses, and Chancellor Charles Reed at the Office of the Chancellor, after the appropriate consultation with their respective management teams.

Q14: How and when will I know if I’m being laid off?
A14: If any campus announces layoffs, their first course of action is to inform the Office of the Chancellor, which contacts CSUEU headquarters. CSUEU will be told the number of layoffs, by bargaining unit, prior to any notices going out to individual employees. The official notice must go the CSUEU headquarters first, not to chapter officers.

Q15: How will I know when layoffs start?
A15: CSUEU will post regular updates on the Budget Central section of our website.

Q16: I'm a temporary or probationary employee. Does this affect me?
A16: It could. Layoffs are by classification. If layoffs are enacted on any campus, temporary and probationary employees within a classification targeted for layoff are laid off before any permanent employees in that classification. The non-reappointment of a temporary employee is not considered to be a layoff.

Q17: Where can I find more information about my rights under the contract?
A17: The Budget Central section of our website. The left column on that page includes a Know Your Rights flyer about layoffs in both English and Spanish.