May 15, 2002

Governor Gray Davis released his revised budget plan yesterday,
telling reporters he was forced to use every tool at his disposal
to address a budget shortfall now projected at $23.6 billion - a
substantial increase in the $12.5 billion estimated state deficit
at the beginning of the year.

To cover the deficit, Governor Davis proposed $8 billion in cuts,
primarily to Medi-Cal and welfare-eligible recipients.
Additionally, Governor Davis proposed increasing the Vehicle
License Fee to its 1998 levels and providing a surcharge on
cigarettes. The revised budget assumes a one billion
reimbursement by the federal government for "anti-terrorism"
measures, and $400 million in federal reimbursements of state
Medicare costs. Davis has also proposed borrowing hundreds of
millions of dollars to compensate for the bulk of the budget

Under the revised spending plan - known as the "May Revise" -
which is based on the state's actual revenues, the CSU would
receive $50.4 million less than the allocation proposed in the
Governor's January 2002-03 budget plan, which provided the CSU
with a net general fund increase of $28.1 million.  Taken
together, the result is a net reduction of $22.3 million to the
CSU budget.

The May Revise proposes a mix of spending increases and targeted
spending cuts for the CSU. The cuts include $70 million in
spending reductions, including $43 million in cutbacks designated
for information technology, instructional equipment, library
materials, and deferred maintenance (the amount of reductions in
each category would be decided by the CSU, and these reductions
could not be absorbed by other non-designated categories,
according to the state Department of Finance).  However, Governor
Davis provides a partial offset to this reduction by allocating
an additional $19.5 million to fully fund the enrollment growth
of 3,008 new full-time equivalent students (FTES). This brings
the total 2002-03 enrollment growth allocation to $98.8 million
(15,278 FTES).

CFA is proposing budget language to protect CSU instructional and
student service programs from the budget cuts, and directing the
CSU administration to adhere to minimum levels of funding
educational and student support needs.

The legislative budget subcommittees are expected to complete
their deliberations by the end of next week, and a joint budget
conference committee with Senate and Assembly representatives
will convene shortly after. The legislature is required to
complete its budget work by June 15, but the deadline has seldom
been adhered to.

Please forward any budget related documents that might be of
interest to CFA's budget campaign - especially documents that
outline campus budget reductions - to Andrew Lyons at
 or David Hawkins at . Or
phone the CFA-GRO office at (916) 441-4848.

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