CSU Must Choose Tuition Hike or Enrollment Cut

Decision pends on tax increase measure on November ballot

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    California State University is facing the bleak choice of either raising tuition or shrinking enrollment if voters reject tax increase measures on the November ballot and a $250 million funding cut goes into effect, officials said Monday.

    Assistant Vice Chancellor Robert Turnage said the board of trustees will discuss two scenarios at its meeting Tuesday and adopt a plan in September in order to be prepared for the possibility of a loss in funds midway through the academic year.

    "The easy choices are gone so the $250 million trigger cut poses a huge challenge," Turnage told reporters on a conference call. "We have reached a point where it's nothing but difficult trade-offs."

    CSU is one of the nation's largest public university systems with 23 campuses that serve some 400,000 students. Since 2007-08, it has lost $1 billion, or 39 percent of its state funding.

    Voters in November will decide on several measures aimed at generating more revenue for education, including proposals to raise the sales tax and increasing income taxes on wealthy residents.

    If the measures fail, public education, from K-12 school districts to universities, will see funding cuts at year-end.
    Turnage outlined two proposals aimed at coping with CSU's possible cut of $250 million.

    Under one scenario, enrollment would remain stable but tuition would be raised by roughly 5 percent, or $150 per semester, starting in January. Tuition for non-California resident students would be upped by 9 percent. That would generate about $116 million in revenue.

    The rest of the funding gap would be made up by slashing employee salaries and benefits by 2.5 percent, drawing down reserves and deferring facility maintenance projects. Faculty time for research and other non-teaching projects would also be reduced in order to provide more instructional hours. That would save $25 million.

    The alternative scenario is to reduce enrollment levels, but keep tuition the same.

    Under that proposal, enrollment would be decreased by 6,000 fulltime students, or about 1.5 percent. In addition, 750 jobs would be lost due to the loss of students, and salaries and benefits would be cut by 5.25 percent.

    The measures would be implemented in January, but Turnage noted that any pay cut would require an agreement with labor unions, which may take longer to hammer out.

    The university is also mulling ways to meet the state's "tuition buyout" proposal in which the state university systems would agree to forgo tuition increases for this fall, in return receiving $125 million in extra funding for the fall of 2013.

    That plan would leave CSU with a $132 million deficit for the 2012-13 year because a 9 percent tuition increase for this fall has already gone into effect, Turnage said.

    However, Turnage said the university could offset that gap if the state Legislature allows it to use about $75 million in continuing education funds. The rest would be made up by cuts on local campuses.

    The board will make final decisions on financial issues in September, he said.

    At its meeting this week, the board is also scheduled to vote on the salaries for four new campus presidents. Two presidents are slated to receive 10 percent raises over their predecessors, while a third will earn 9 percent more. A fourth president will earn 3 percent less.

    The increases are in line with a 10 percent cap on presidential salary raises adopted by the board earlier this year after the board came under heavy fire from state legislators, students and employees for raising executive pay at a time when the university is hiking tuition and failing to pay contracted raises to faculty.

    The new policy stipulates that the amount of presidential raises must be paid for by private fundraising and campus foundations.

    "Not a dollar of student money or state money is being used for that difference," Turnage said.
     

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