Tuesday, January 10, 2012

Dire Predictions from CSU if Tax Hike Fails

The following was sent out today from the Chancellor's Office. It illustrates just how serious a funding gap the CSU is facing, along with the threat even larger cuts if the proposed sales tax increase fails to pass during the fall election.

CSU to Receive Additional $200 Million Cut if November Tax Measures Don't Pass

The California State University received no new funding in Governor Brown's 2012-13 proposed budget, thus making permanent the recent $750 million cuts to the system. Without any new funding, the system is at its lowest state funding level in 15 years, while the CSU serves 90,000 more students today.

Governor Brown's budget plan relies on the passage of a tax measure that would raise income taxes on high-income earners and increase the state sales tax. If voters do not approve the measure, a series of trigger cuts will go into effect, including an additional $200 million cut to the CSU, making the system's two-year cut $950 million—a staggering 35 percent reduction. This additional $200 million cut is equal to denying admission to 27,000 students, and it exceeds the current combined state funding of four of the smallest CSU campuses. For Cal State San Bernardino, the trigger cut would result in an additional reduction of nearly $8 million.

In two of the last four fiscal years, state support to the CSU has been reduced dramatically, forcing the CSU Board of Trustees to approve sizable tuition fee increases, reduce enrollment, implement furloughs and eliminate student programs and services—to name a few. Even with tuition fee increases, revenue from fee hikes has not kept pace with state funding cuts. For the current academic year, tuition increases raised approximately $300 million, but the CSU sustained a $750 million cut.

The CSU will continue to work with the Governor and legislature to avoid further cuts; however, if the additional $200 million trigger cuts are sustained, extremely difficult tradeoffs will be considered, including possible additional cuts to academic programs and student services, or further increases in tuition.

The CSU believes California must make public higher education a priority again; otherwise, the long-term harm is that California will find itself with far fewer college graduates to step into higher-paying, knowledge-based jobs that are necessary to the state's economic recovery.

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