Sacramento State students, faculty and staff will soon experience exactly how proposed budget cuts will affect the university. But how exactly are these cuts implemented?

In April, according to the General Budget Fund Development Process document, Sac State President Alexander Gonzalez should announce preliminary budget changes for the 2008-09 academic year to the campus.

With Gov. Arnold Schwarzenegger proposing a $312.9 million budget reduction to the California State University system and Gonzalez calling for the university’s deans to cut spending by 7 percent for the 2008-09 and 2009-10 budgets, the campus community will have its first look at the impact the state’s fiscal crisis will have on Sac State.

This will only be an initial proposal for the university’s budget for next year. The final budget, which should be set by August for the school year that starts in September, may not be in place until late September or October.

While many are involved in developing the budget for Sac State, including the CSU Chancellor’s Office, Gonzalez and the University Budget Advisory Committee, it is not final until it is passed by the state legislature and the governor signs the budget for California.

The state’s fiscal year runs from July 1 to June 30. The constitution of California requires the legislature to pass a budget with a two-thirds majority by June 15 of each year in order for the budget to be in place when the new fiscal year begins. There are no sanctions and penalties, however, for not passing a budget by the required date. Often times, especially when the state is facing money problems, the budget is not approved until well after the deadline. Last year’s state budget was not passed until Aug. 21, 2007.

The governor releases his budget proposal in January and offers a revision to his plan in mid-May, but the process of developing the yearly budget for the CSU system and Sac State begins well before that, said Emir Macari, chairperson UBAC and dean of the College of Engineering and Computer Science.

Both the CSU Chancellor’s Office and Sac State begin the budget planning process in September for the next fiscal year, at times before the budget for the current year has been finalized.

Sac State’s colleges often start the fall semester without their budget allocations for the year, said Marilyn Hopkins, dean of the College of Health and Human Services.

Starting the school year without budget allocations can make things difficult for the university’s colleges.

By the start of the fall semester, courses and sections have been scheduled, additional faculty have been hired and new equipment has been purchased, Hopkins said. When the allocations are finally made, a college may find it has already spent two-thirds of its funds for the entire school year, leaving it with far fewer resources for the spring semester, she said.

This is why the lengthy planning process is important, Macari said. The university often starts the academic year based on assumptions as to what the final budget will look like, he said.

“We have to be cautious, so the spring semester will not be affected,” Macari said.

From September through November, the UBAC, which is an advisory committee to the president that does not set campus policy, begins reviewing the previous year’s budget and developing recommendations for the president’s January budget call, Macari said.

During this same time period, the CSU Chancellor’s Office begins meeting with the Governor’s Office and the state’s Department of Finance staff to discuss the system’s financial needs for the next fiscal year, said Rodney Rideau, budget director for the CSU Chancellor’s Office.

In order to determine the CSU systems needs, the Chancellor’s Office first looks at mandatory budget increases for the coming year, Rideau said. These mandatory increases include health care costs, pensions and salary increases for faculty and staff as negotiated by bargaining units, such as unions and the California Faculty Association.

“These costs increase whether they get additional funding or not,” Rideau said.

Mandatory cost increases are then subtracted from the funds the CSU system expects to receive based on the state’s Higher Education Funding Compact, he said. The Chancellor’s budget office then begins to look at other needs, such as infrastructure, enrollment increases and technology updates to determine how to pay for them with the remaining money, Rideau said.

The CSU and the University of California systems entered into the Higher Education Funding Compact with Schwarzenegger in 2004. The compact guarantees yearly funding increases for the CSU and UC systems for basic need, including salary increases, health care benefits, maintenance costs and inflation through the 2010-11 academic year.

During this process the Chancellor’s Office is in constant communication with CSU constituency groups, university administrators, academic senates, student associations, unions and the faculty association to determine and prioritize their needs, Rideau said.

In November, the Chancellor’s Office and the Board of Trustees will approve a final budget recommendation and send the document to the governor’s office, the state Department of Finance, and legislative analysts for use in developing the state budget.

Once the governor issues his initial budget proposal in January, the Chancellor’s Office provides the CSU campuses with information on what the proposal means for the system.

It is at this point that Gonzalez issues his budget call for proposals to the Sac State colleges and divisions.

Hopkins believes her prior experience with the budget process gives her an advantage in developing the College of Health and Human Service’s budget proposal. This is her eighth year as dean and the third time she has faced budget reductions, she said.

Last week, the deans turned their budget proposals to Provost and Vice President of Academic Affairs Joseph Sheley, Macari said. The proposals are now being reviewed by the president, the provost, the university’s Budget Office, and the UBAC in preparation for Gonzalez’s preliminary budget proposal in April.

The UBAC then considers the May revision of the governor’s budget plan and makes further recommendations to the president if appropriate, Macari said.

After the May budget revision, CSU and Sac State wait for the legislature and governor to pass the state budget before issuing their final budgets for the school year.

Todd Wilson can be reached at [email protected].