Tax initiative may decide fate of CSU system
California voters may soon have the opportunity to relieve the burden of the California State University system – or further asphyxiate it. A possible upcoming California special election could cause further budget problems for SF State and the cash-strapped California State University system.
Gov. Jerry Brown has proposed a special statewide election on tax extensions for June 7 that would implement a sales, vehicle and income tax increase amounting to $12.5 billion. The tax initiative would curtail the effects of the state’s massive $28 billion budget deficit. The measure would reinstate tax increases implemented in 2009 that are set to expire July 1.
According to the California Budget Project, the new proposed tax increases, which include a one percent sales tax increase, would take effect through 2016. If not approved, it would have devastating effects on the CSU system.
“This is causing huge problems for SF State and the other CSU campuses,” said SF State Academic Senate chair Shawn Whalen. “The failure of the governor and the legislature to get the tax extensions only makes matters worse.”
Originally slated for June 7, the March 31 deadline to hold the election on the first Tuesday in June passed without agreement in the California State Legislature. No date has been finalized.
If an election is held and voters do not approve of tax extensions, California would likely operate on an all-cuts budget, meaning that the state would lessen its multi-billion dollar deficit solely through spending cuts.
Public education–namely the University of California, CSU and community colleges–would feel the brunt of this.
Without the tax extensions, there will likely be an additional $500 million cut to the CSU system. This would equate to a roughly $35 million cut to SF State, according to Whalen. If that happens, Whalen anticipates a student fee increase around 25 to 30 percent and large reductions in class sections.
Based on Brown’s initial proposed budget, the CSU is already facing a likely $500 million reduction of funds that would take effect for the 2011-12 academic year.
According to the CSU Chancellor’s Office, the first proposed $500 million cut would bring CSU budget levels to the same level of financial state support as the 1999-00 fiscal year. However, the number of students attending schools in the CSU system has increased by 70,000 since then.
If the tax extension is not approved, another $500 million cut would bring CSU funding to its 1996-97 level–back when the system served 100,000 fewer students than it does today. SF State is already operating at a $50 million deficit.
One of many consequences of the cost-cutting measures would be a 10,000-student reduction to the population of the 23-campus CSU system.
Historically, California voters have been reluctant in approving any tax hikes. Since 1980, Californians have approved only one measure in a special election to increase taxes– Proposition 172 in 1993, which raised the state sales tax by 0.5 percent.
“An additional reduction of CSU’s budget by $500 million would be yet another pathetic display of the elected representatives,” said SF State finance lecturer John C. Green. “They are just deferring dealing with reality and the necessary difficult decisions in order to avoid upsetting the electorate and jeopardizing their continual reelection.”
Despite the unsettling news, University spokeswoman Ellen Griffin has admitted that concern may be premature as nothing has been finalized.
“It is too early to speculate where and how cuts would be made at SF State,” Griffin said.
Ramon Castellblanch, head of the California Faculty Association and assistant professor of health education sees the current situation as similar to the one SF State faced last year.
“For our campus, this means a budget similar to the one of our furlough year (in 2009-10); but this time without the furloughs,” Castellblanch said. “That means student fee hikes and/or a huge number of sections being cut for our fall semester.”
According to the CSU Budget Office, the average full-time SF State yearly undergraduate resident fees have increased from $1,428 in 2000-01 to $4,230 for the 2010-11 term, a nearly 200 percent increase.
Despite the likelihood of rising student fees, Castellblanch added that teaching jobs are safe.
“We have been told by our administration that it would not mean lay-offs for tenure and tenure-track faculty,” he said.
Regardless of whether the tax extensions pass, SF State students will have to grapple with the likelihood of higher tuition and fewer class options, particularly underclassmen.
“I’m trying my best to be able to graduate in four years,” said Nedal Saba, 18, a business major. “I’m disappointed that I would have to pay more.”
Saba admits that he’s had a difficult time finding classes in his first year at SF State.
“I’m disappointed,” Saba said. “It seems like every semester, they’re (SF State) raising tuition.”
Luckily, students relying on financial aid need not worry – for now.
“Typically, 20 percent of any student fee increases are set aside to ensure that the most needy students are still covered by state university grants,” Whalen said. “So the all-cuts budget wouldn’t decrease the aid dispersed to students unless the legislature cut Cal Grants.”
Cal Grant funding has been suspended in the past, such as when Gov. Arnold Schwarzenegger temporarily halted it in July 2008 when the state had not adopted a budget. But as of yet, financial aid has not been affected.
“Obviously, the situation sucks,” said Juan Cruz, 18, a computer-science major who relies on financial aid. “If financial aid doesn’t help me as much as it has, the higher tuition would force me to work more.”