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Addressing the budget crisis with innovation and transformation

  • August 3, 2009

While we have been sharing the news for quite some time in our campus budget forums and e-mail communiqués that severe cuts were imminent, it still hit hard on July 21 when the California State University Board of Trustees adopted a series of budget-slashing measures forced on them by the state’s worst fiscal crisis in a generation.

The move reminds us that it will be through creativity and innovation by faculty, staff, administrators, and students working together that we will meet the challenges ahead.

Faced with $564 million in cuts to a university system already severely underfunded, the trustees adopted plans that included campus budget cuts, furloughs for employees, fee increases for students, and enrollment reductions for the next two years. 

Even though our 2009-10 budget will be nearly 17 percent less than 2008-09, and next year our student population must be reduced by 9.5 percent (about 1,400 students), our budget principles continue to guide us as we work to maintain academic quality, protect as many jobs as we can while meeting our enrollment target, and make decisions from a strategic viewpoint.

We dare not dwell on gloomy news, or cling to fossilized paradigms of how to make the best use of our remaining resources. How we deal with this period of shared sacrifice, and how we prepare for our inevitable resurgence, will make a powerful statement about the commitment to regional stewardship California State University, East Bay expects from itself in the 21st century. And we definitely cannot afford to be tinkering with the old ways of doing things instead of exploring how we can be transformative.

Students Remain the Top Priority

At all times during this process we will focus on our top priority: to teach as many students as possible while maintaining academic quality. The fee increase will be a burden for many students and their families, particularly on our campuses, where generally 50 percent of our students get financial aid. Our projections show that as many as 58 percent of our fall quarter students will receive this assistance, and applications are still being processed by a busy and efficient Division of Financial Aid.

What will be helpful to our neediest students is a 13 percent increase in the maximum Pell Grant award. The State University Grant, which 3,800 of our students receive, will be aligned so recipients experience no increase in their fees.

About 187,000 CSU students receiving aid will not be affected by the fee increases, and those families who make $75,000 or less will not pay any fees. In addition, every member of this fall’s freshman class, the largest in our history, is eligible to borrow a minimum of $5,500 in the Stafford Loan Program. Sophomores, juniors, seniors, and teacher credential candidates are able to borrow a minimum of $7,500 annually, and graduate students can borrow more than $20,000.

While I do not wish to discount the financial impact the fee increase will have on our students, I am confident that those with the greatest need will still receive enough grant aid to cover annual registration fees, books and supplies. 

Moving Ahead

It is clear we will not be able to advance the university as quickly toward our seven strategic mandates in the coming years as we had hoped. Progress will be understandably slower the less time we have to contribute. But we will continue to make progress, such as the recent realignment of reporting functions for administrative units in the former Division of Student Affairs.

How successful we are in the coming years may well be determined by how we address four questions:

•    What educational delivery models will both maintain quality and improve efficiency for the university’s future?

•    What service delivery models will enhance quality and improve efficiency for the university’s future?

•    What is the appropriate size and shape of the university going forward?

•    How can traditional and alternative revenue streams be maximized in support of our mission?

Our answers to these questions in the coming months and years will determine our success in transforming the university within these fiscal constraints and demonstrate our ability to be a regional leader, an anchor institution for the Bay Area. Working with such dedicated and motivated professionals, I know that we are up to the task.

Strategic Partnerships

Among the areas where we continue to develop opportunities are in our strategic regional partnerships, such as those with national laboratories, faith-based organizations, school districts, corporations, and foundations. Our Office of Research and Sponsored Programs has taken the lead in many of these efforts, logging more than $15 million in grant awards received or pending based on 2008-09 activity.

For example, last month the university accepted a $137,000 grant from the Genentech Foundation to support Professor David Stronck’s East Bay Biotechnology Education Partnership. Since 1997, Professor Stronck has received more than $1 million from Genentech to support this important work of training high school faculty to teach biotechnology.

The role of the Division of Continuing and International Education continues to expand, last year bringing $6 million in gross revenue to the university while offering more than 60 degree and certificate programs. Among its tasks, the division manages our busy Oakland Professional Development and Conference Center and manages a $1 million endowment in support of the Osher Lifelong Learning Institute.

Our campuses will continue to develop other funding sources not dependent on the state budget.

Over the past three years the California State University Foundation has worked hard to improve its fiscal performance, not only to ensure its own viability but also to enhance its ability to provide revenue to the university. The primary improvements have come in commercial services such as contracts for food service, the bookstore, and vending. The foundation has increased its profitability by almost 700 percent from 2006.

University Advancement continues to develop new friends and donors for short- and long-term initiatives. In their work with individual supporters in 2008-09, for the first time our fund-raisers topped the $1 million mark in bequests committed by donors interested in making Cal State East Bay a part of their legacy.

Ground was broken in May on the new Recreation and Wellness Center a $32 million project financed by student fees established in consultation with the Associated Students, Inc. and other student groups in 2007. We expect to break ground next year on an addition to the Pioneer Heights student housing complex, financed with bonds based upon the revenue from student residents.

Yes, even though we will have fewer students over the next several years, we are still preparing new housing because of changes in the type of students we will serve. The number of post-baccalaureate students will be reduced, we will identify and graduate seniors who have many more units than they need for degree completion, and we will re-tool agreements with community colleges so we receive transfer students better prepared to move efficiently through our degree programs.

I remember my final comment to an open forum of students, faculty and staff three and a half years ago when I was a candidate for president at Cal State East Bay: that given a challenge I would rather roll up my sleeves than be wringing my hands. It was an honor and a privilege to later accept the president’s position and then discover that the people I would work with side by side felt the same way.

I urge each of you to roll up your sleeves and join us. I share the anxiety of not knowing what the future holds for us at this time, but I can’t imagine facing such unprecedented challenges without the University family here that has transformed Cal State East Bay into the successful institution it is today.

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