Sacramento State President Alexander Gonzalez announced that he had accepted a proposal that would reduce the university’s budget by 3.4 percent in a budget briefing meeting Thursday.

In January, Gonzalez issued a budget call asking the deans of the university’s colleges to reduce their budgets by 7 percent. The University Budget Advisory Committee worked with deans to come up with a budget proposal for Gonzalez that found ways to reduce the 7 percent cuts and still close the structural gap in the university’s budget.

The structural gap is the difference between the university’s revenues and expenditures. Sac State is facing a $10 million structural gap for the 2008-09 school year.

The University Budget Advisory Committee recommended using carry-over funds to pay down the university’s debt. Carry-over funds are money not spent in the previous year that can be used in the next year’s budget and cannot be replenished.

The proposal calls for using $4.3 million of the more than $8 million dollars in carry-over funds to pay off the university’s loans. This is a long-term strategy that will reduce expenditures by $1.45 million a year.

The proposal also calls for increasing the university’s revenue by holding the money received from student fees in a savings account until they need to be spent and using the interest earned on those funds for expenditures. The university’s two main sources of revenue are the state’s general fund and student fees.

Provost and Vice President of Academic Affairs Joseph Sheley said this is an effort to make the university less dependent on state funding and manage its own resources. The administration has also developed a rudimentary three-year budget plan in case the state’s economic downturn continues, he said.

“This is what we need to do to keep the university above the waterline for the next few years,” Shelley said.

Todd Wilson can be reached at [email protected].