Sacramento State President Alexander Gonzalez announced his acceptance of a proposal that would reduce the university’s budget by 3.4 percent.

In January, Gonzalez issued a budget call asking the provost and vice presidents of the university’s colleges to reduce their budgets by 7 percent.

The University Budget Advisory Committee worked with the provost and division vice presidents 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 $10.3 million structural gap for the 2008-09 school year.

The budget proposal for Sac State is based on the $312.9 million in cuts to the California State University system and a 10 percent student fee increase in Gov. Arnold Schwarzenegger’s January budget proposal. These figures could change with the May revise of the governor’s budget proposal, which will be released on May 14, said Emir Jose Macari, chair of the University Budget Advisory Committee and dean of the College of Engineering and Computer Sciences.

The cuts to the CSU system could be deeper than originally proposed due to an expected $20 billion state budget deficit, which is more than the figure used in developing the governor’s proposal.

The committee continues to meet and will revise its budget recommendations to Gonzalez depending on changes, either a higher or lower cut to the CSU system, to the proposed state budget in the May revise, Macari said.

The 3.4 percent reduction to Sac State’s budget is a campus-wide average with some divisions facing a higher or lower percentage. Informa tion Resources & Technology is facing the highest cuts at 5 percent, while Student Affairs, Athletics and Governmental & Civic Affairs are facing the lowest at 2. 1 and 0 percent respectively. Academic Affairs has been reduced in the proposal by 3.5 percent.

Information Resources & Technology is one of the newest divisions on campus to undergo a major reorganization, Macari said. The division will still be able to operate very well with a 5 percent reduction, he said.

The division of Student Affairs is receiving among the lowest reductions because it is critical to Sac State’s enrollment and retention efforts and has made great strides in improving its services in recent years, said Joseph Sheley, Sac State provost and vice president of Academic Affairs.

“We have moved (Student Affairs) up to A-level performance and we can’t step back,” Sheley said. “It is critical over the next couple of years to give the division the support it needs.”

The 3.4 percent reduction to Sac State’s budget, as opposed to 7 percent, means that the university will not need to make any drastic cuts to classes and the course schedule, Macari said.

However, the 3.5 percent reduction to Academic Affairs does mean that the university will have to alter the course schedule, Sheley said. Deans and department chairs are working on ways to create a schedule that delivers a quality education with the right mix of larger and smaller class sections that meet students’ needs, he said.

There are two major issues and constraints in this area, Sheley said. The first is an infrastructural issue – to what extent does the university have the capacity to increase the size of class sections and still deliver high-quality instruction. The second is to what extent students adapt to changes in the schedule. Students will be asked to make major decisions and be more flexible with regards to their schedules.

“This is fairly new territory,” Sheley said. “It is a huge experiment that we have to monitor closely.”

The University Budget Advisory Committee recommended using carry-over funds to pay down the university’s debt. Carry-over funds are monies 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 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 it needs 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.

In previous years, the state held on to student fees, but in a deal with the state brokered by the CSU Chancellor’s Office and the CSU Board of Trustees, the university system will be able to control and invest student fee revenues itself.

Interest earned on student fees are expected to generate approximately $1.8 million annually, Macari said. The committee has proposed putting $1.3 million of the money earned on interest into the baseline funding with the remaining $500,000 used as carry-over funds for upcoming years, he said.

Sheley said this is an effort to make the university less dependent on state funding and manage its own resources. For the first time, the administration developed a rudimentary three-year budget plan in case the state’s economic downturn continues, he said.

The campus community needs to have a vision of where it wants to be in three years and a plan for how to get there, Sheley said. Otherwise, the university will continue to be a victim of the state’s up-and-down economic cycles, he said.

In the interest of accountability and transparency, Gonzalez said the committee’s budget recommendations will be available to view on the Sac State website. Gonzalez urged the campus community to look at the recommendations and proposals.

“If you are informed and know what’s going on with the budget, you can help by giving us insights,” he said.

The University Budget Advisory Committee’s budget proposal has not been posted to the university’s website. Macari said the committee’s recommendations will not be posted until after the May revise of the governor’s proposed state budget when the committee will decide whether to make any changes or new recommendations to its proposal based on the new data.

“It was great seeing all sectors of the University on stage at the budget briefing,” Macari said. “This is the first time that faculty, staff and administrators have worked so closely together to address issues of great importance to our University. Most of credit should be given to President Gonzalez for opening up the process and moving us to a new era of trust and budgetary transparency.”

Todd Wilson can be reached at [email protected].