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Provost and Vice President for Academic Affairs

Academic Affairs Budget Message

May 2, 2018
Debra S. Larson, Provost and Vice President for Academic Affairs

Last week, President Hutchinson sent a message to the campus describing the University’s financial situation.  I am following her message to provide you with specific details about our situation in the Division of Academic Affairs.

We will not know the final allocation to the CSU from the State until the State’s budget is signed in mid-June.  Even if the CSU realizes its full request, the Division still has budgetary challenges because of our multi-year practice of deficit spending.  The table below provides a year-by-year summary of changes in the Division’s reserves.  Our projections for 2018-19 – if we continue as is and assume full funding – show that the Division’s reserves will dwindle to $5.3 million, too low to cover one month of payroll and benefits.  A reserve is considered healthy when it is equivalent to five months of operating costs.   I hope you appreciate the nature of our precarious position.   

Over the years, the Division has realized programming and project benefits partially supported by the spend-down of our one-time general funds (also known as reserves). These benefits have been many and include:

  • upgraded classrooms, new computers, and infrastructure enhancements;  
  • varied student success initiatives and centers;
  • curricula programming and assessment and program review elements;
  • student travel, design competitions, laboratory equipment, laboratory consumables, software, tutoring, etc.;
  • co-curricular and outreach activities; and,
  • professional development. 

Late in spring 2017, the leaders of Academic Affairs participated in a process of belt-tightening, trimming our planned spending for 2017-18 by $1.5 million. At the same time, the Division approved 29 searches for tenure-track faculty and continued to support many important student success initiatives, accreditation and program review work, and faculty development activities.  With this previous trimming work, we projected a balanced budget for 2017-18 and made funding allocations in accordance to that welcomed plan.  Unfortunately, because we realized a number of extraordinary expenses, the division will close 2017-18 with a significant deficit.  This excess spending will be covered by drawing upon our dwindling reserves.   

What does this situation mean for the Division in 2018-19? 

Even if the CSU receives its full funding request of an additional $283 million, we still need to:

  • immediately trim expenses by $2.5 million;
  • grow revenue through the readily available options of international education, regional and continuing education, sponsored grant work, philanthropic activities, and other means; and  
  • review our organizational structure and practices during the University’s strategic planning process.

Together, we need to work strategically to ensure a Division with a stable expense profile focused on a coherent delivery of prioritized and excellent mission components enhanced through alternative revenue sources and leaner processes.  

The Division’s leaders have already been examining their budgets. We have begun to identify areas and activities for possible trimming, while minimizing impacts to student learning and core instruction.  This work will extend through June – possibly into July – depending upon the State budget.  I expect that many of the ongoing specific and one-time expenses listed on the Division’s sources and uses summary (link for 17-18 sources and uses (PDF)) will see some trimming.  I expect that some of our support units will experience differential trimming.  It is also possible that some fiscal practices will change in response to the deficit.  I hope to implement the recommendations of the ABC Task Force to rebalance the instructional allocation to the colleges for 2018-19 (link to UBC meeting agenda from 4/27 (PDF)).  Finally, I am asking that all colleges and units exercise prudence in their spending between now and when the 2018-19 Division budget is established. 

As President Hutchinson noted in her message, state funding for the CSU system has fallen from approximately 80% of its budget in the mid-1990s to around 55% of its budget in the current fiscal year.  If the State’s budget for 2018-19 does not meet the CSU’s request, we will need to extend the above deficit reduction into an even more significant plan of reduced spending for the Division.  Should this occur, in consultation with the University Cabinet and Academic Senate, Division leadership will collectively develop a more substantial reduction plan.

It is never easy to share difficult financial news, especially when it involves impending budget reductions.  Please know that now, more than ever, I appreciate being a part of the inclusive Chico State community, where shared governance and transparency are so deeply valued and realized.  I am confident that, together, we will come up with well-reasoned plans focused by our commitment to:

  • supporting student learning, core instruction and the student experience;
  • maintaining critical campus facilities, operations, and services; and
  • sustaining health, safety and security of students and employees.

 As part of the process, should you have thoughts or ideas you would like to share about the budget and revenue enhancements, please feel free to contact me, your dean, unit head, or other administrator.  I invite you to consider ways that you might be able to help. 

As we close out the academic year with another successful class of graduates, I wish to thank you all for your hard work and effort.  You are the reason why we have such a strong foundation at Chico State, and why I am confident that we will come up with an effective and creative solution to our budgetary situation.