Often considered the most prestigious university in the California State University system, California Polytechnic State University, San Luis Obispo, is also dramatically emblematic of the entire state of California budget meltdown.

Cal Poly could be forced to trim its budget by more than $33 million this fiscal year, even though students voted overwhelmingly in favor of increasing their own student fees back in March — a source of some financial relief still stalled at the state level.

And budget uncertainty for the other two tri-county state universities, University of California, Santa Barbara, and California State University, Channel Islands, only continued when state lawmakers failed to strike a compromise by the June 30 state budget deadline. The morning after those failed budget negotiations, officials at the universities spoke with the Business Times about the difficulties of planning a campus budget when the state doesn’t even have one.

“We’re still guessing at what the UC budget will be,” UCSB Executive Vice Chancellor Gene Lucas said the morning of July 1. “The lack of a state budget makes it really hard to plan ours.”

“Planning is very hard without real numbers from the state,” agreed Larry Kelley, Cal Poly vice president of administration and finance. “We continue to watch the numbers and the state budget in its development.”

In Cal State system, planning a budget with few hard numbers

The CSU Chancellor’s Office released a statement on June 23 calling for the California Faculty Association to bring a two-day a month unpaid furlough consideration before its members for vote as a way to ease the projected $584 million CSU deficit. Currently about 80 percent of CSU’s budget goes toward employee salary and benefits. The proposed two-day a month furlough would apply to all of its employees, including management and executive positions, with the exception of public safety personnel.

The CSU includes Cal Poly and California State university Channel Islands near Camarillo. Both will have to deal with cuts to their operating budget, which means less class availability and equipment for students.

At Cal Poly, Kelley and Robert Koob, provost and vice president for academic affairs, sent an e-mail to all campus employees on June 29 reassuring them that CSU employees will not receive IOUs as other state employees may have to, although the furlough option is under consideration. “We continue to be committed to doing the best we can under the circumstances to serve our students during these difficult times and to preserving jobs for our employees,” the e-mail said, noting that the furlough option would help protect “the maximum number of jobs.”

Cal Poly faces an estimated $33 million to $34 million budget shortfall — or 15 percent of its operating budget — in the coming school year, Kelly said.  To date it has imposed a hiring freeze on all staff positions, restricted travel and cancelled non-essential equipment and supply purchases.

Anticipating the impending budget crisis, students were asked to submit an advisory vote to Cal Poly President Warren Baker on March 11 and 12 on a proposal to increase college based fees to $362 per quarter for full-time students, effective this fall. The vote passed with 78 percent yes votes by 47 percent of the student body — a significant sign that Cal Poly students are willing to foot more of the bill for their own education.

That proposal, however, was stalled by California Education Chancellor Charles Reed, who advised Baker to hold off on implementing the fee increase until the state budget is finalized, even though students started registering for their fall classes in May. As of Wednesday morning, Kelley said no new developments have been made on the student fee proposal. “We’re still holding off until we know what the state’s doing,” he said, noting that planning fall quarter classes was difficult without knowing whether the university will have the added student fee revenue.

Provost Koob has said that Cal Poly’s budget dilemma stems from years of compounded shortfalls. Despite enrollment increases mandated by the chancellor’s office, the state has repeatedly failed to deliver on its promise of providing Cal Poly with state funding to match the increase in the number of students – a situation administrators often refer to as “over-enrollment.”

As a result of its continued over-enrollment, Cal Poly has experienced significant budget shortfalls over the past several years, totaling approximately $25 million, according to the original fee increase proposal. If allowed to go through, the additional student fees would generate almost $7 million in revenues for Cal Poly in the coming school year. Once fully implemented, it will represent more than $20 million in additional funding.

“I still think the long-term for Cal Poly is very bright. We have a lot of demand for our graduates in the workforce,” Kelley said. “But right now we have to ride out this budget situation and it’s very difficult to plan for the long-term with so much confusion in the short-term.”

CSU Chancellor Reed and campus presidents from the 23 universities met last month to discuss the budget. No details were finalized and discussions will continue with the Board of Trustees at a special meeting on July 7 and a regularly scheduled meeting on July 21.

A different UC, ‘A smaller UCSB’

Just down the coast from Cal Poly, UCSB is in a similarly precarious position, facing between $40 million and $45 million in budget cuts for the upcoming school year. Whatever happens at the state level, Lucas said the future is going to see a “smaller UCSB.”

The UC system as a whole faces an unprecedented $800 million funding shortfall for the 2009-10 school year. An already-approved student fee increase of 9.3 percent will generate approximately $211 million for the UC system, covering about one quarter of its shortfall.

System-wide pay reductions would save the UC system another estimated $195 million. UC officials will have to decide later this month whether those savings will come through direct pay cuts, furloughs or a combination of the two.

UC workers have been giving their input as to how to make those pay reductions through town hall meetings, online surveys and discussion boards and e-mails to UC President Mark Yudof. In a memo on Tuesday, Yudof said employees strongly prefer the furlough option of two unpaid days off a month.

“Our goal is to meet our budget reductions for this year by getting a little smaller, while still remaining a top-tier California research institute. That’s what’s tricky,” Lucas said. “UCSB is going to change. The entire California public university system is going to change.”

Are you a subscriber? If not, sign up today for a four-week FREE trial or subscribe and receive the 2009 Book of Lists free with your purchase.