Governor Brown’s decision to cut the CSU Budget

1. Governor Brown’s decision to cut the CSU Budget

2. PRO Brown's decision to cut the CSU budget is in the best interest of taxpayers and citizens of California.

3. California’s Debt CA began the 2011 year with a budget gap of more than $25 billion. Jerry Brown plans to reduce the deficit by $12 billion this year through cuts and shifts in spending. Proposes to reduce CSU funding by $500 million, which represents an 18 percent reduction in state funding from last year's budget.

4. Students & Tuition Tuition costs will rise and force those who aren't serious about college into the workforce. This will also help the overcrowding of college campuses and classes. A student that truly wants a higher education will continue to attend no matter the slight increase in tuition.

5. This is Nothing New Deregulated electrical industry Housing industry Gas prices It’s absolutely necessary to cut the state’s CSU funding in order to maximize our success in conquering California’s debt.

6. Economic Issues Higher Education subsidies impose taxes on blue collar workers to pay for the tuition of future white-collar professionals.

7. Economic Issues Rise in student subsidies over the decades appears to have fueled inflation in education costs.

8. Con Economics

9. 2011 Budget Act The 2011 Budget Act includes total funding of 22.1 billion, ($12 billion General Fund and $ 9.9 billion other funds) for all programs for Higher Education System in California, Major entities comprising the higher education in California include: CSU, UC, CCC, and CSAC

10. Reductions $ 650 million to CSU and an additional 100 million reduction if state revenue forecasts are not met. The cut brings the CSU’s new budget to a total $ 2.1 billion and represents a 23 % decrease in support (year over year). To address the first $ 150 million budget reduction, it was agreed that the university would enroll 10,000 fewer students in the fall of 2011. Apply an estimated 146 million in revenue from a tuition fee increase Reduce the 23 campuses budget by a combined $868 million. Reduce the Chancellor’s Office by nearly 11 million.

11. Cuts will be made through: Administrative and instructional efficiencies Expenditure reductions in travel Information technology, Equipment, book and journal purchases by libraries. The 2.1 billion budget in state funding allocated to the CSU in the 2011-2012 will be at the lowest state support the system has received since 1998-99, regardless of the cuts, the university is currently serving an additional 90,000 students.

12. The Past Economic Situation California spends more money each year than it makes, which is not sustainable Our Legislature will not vote to raise taxes to make up the gap, and as a result  Since 2008 Spending to Social Services, including Higher Education, has been Cut.

13. The Current Economic Situation The California State University System consists of 23 Colleges and 412,000 Students 2007 budget (438,000 Students) $2.93 Billion reduced by $868 Million, a 29.62% Cut Governor Brown Cut CSU $650 Million, another $100 Million Cut pending in December

14. The Economic Situation -Looking Forward  Our population is growing, we need to maintain healthy economic growth to maintain the standard of living Short Run -Cutting the CSU's budget Will Lower Consumption and Lower Government Expenditures Long Run -Cutting the CSU's budget Will Lower Human Capital, and Slow Technology Growth

15. Short Run AD & AS models are useful to measure Inflation, Economic Growth, Unemployment, & Net Exports. Two different ways of deriving Aggregate Demand 1) AD = Consumption + Investment + Government Expenditures + Net Exports 2) AD = f(Taxes, Transfer Payments, Government Expenditures, Money Supply, Expected Income, Expected Prices, Net Exports) Decreasing CSU budget decreases Government Expenditures, leading to increased tuition, lessens disposable income, lowering consumption, thus decreasing AD & decreasing GDP, leading to less economic growth and declining standard of living.

16. Short Run In the Short Run Price is fixed & therefore AS is flat, suggesting this will lead to decreased output thorough increased Unemployment. (consistent with Keynesian economics, Cobb-Douglas production function)

17. Short Run  Multiplier Effect- this idea specifies that an exogenous variable will have a quantifiable affect on an endogenous variable. More simply put, a cause will have an effect.  According to the Office of the Chancellor CSU Impact Report every $1 in government expenditure spent on California State Universities causes $5.43 of economic impact in California within that year. This suggests that Consumption will be affected by more than five times greater than the amount the government cuts the CSU's budget.

18. Medium to Long Run  AD & AS models are useful to measure Inflation, Economic Growth, Unemployment, & Net Exports Aggregate Supply AS = Labor + Capital + Resources + Technology Decreasing the CSU's budget can negatively affect Labor, Capital, and Technology. 

19. Medium to Long Run 

20. Medium to Long Run  Instead of cutting CA's budget or Increasing Taxes, California can become more productive, consequently the government will receive more revenue; and this will take place due to:  increased Marginal Productivity of Labor increased Human Capital increased Technology  All of which contribute to the economic growth necessary to maintain the standard of living, **ALL OF WHICH HAPPEN AT THE CSU.**

21. Pro Political

22. Everyone is affected A Budget cut is necessary; the state deficit is the most important issue at hand, above all other programs. Budget cuts are not permanent, but presently they are necessary to facilitate and maintain financial stability for California. Budget cuts can’t pick and choose which programs it wants to give to; it involves everyone by cutting from every program to be fair

23. The Government Serves Everyone California government serves nearly 40 million people The government serves the following students, which is less than 10% of the population UC 222,000 students CSU 412,000 students JC 2.6 million students

24. The Budget for Higher Education The governor’s budget $11,140,400,000 for higher education, which was 8.6% of the budget The education system serves less than 10% of the population. Of this percentage, only 1% of students are enrolled in the CSU system Is it the governments job to cater to 1% or even 10% when they have duties to the rest of the population?

25. CA has duties to it’s entire population The majority of the budget goes to the majority of the population, such as K-12 education which is roughly a third of the population And Health and Human Services Both of these programs have also suffered budget cuts as well

26. Democratic Capitalism Democratic Capitalism would support budget cuts because it is one step closer to a free higher education market. The government should not interfere with the free market. By having a institution such as a public higher education, this market is being manipulated.

27. Con Political

28. According to Jefferson, Jefferson believed the survival of the United States depended on having honest leaders, knowledge, and most importantly education. He believed the people needed to be educated in order to recognize corruption, and when they are being taken advantage of.

29. Universal education He fought to insure that some form of universal education would be provided to the people of the United States. It partially came true with grade school and middle school education being supported by taxes, but the quality of the education still isn’t excellent, and college education is far from being universal. What little funding is being provided to students is being threatened by budget cuts.

30. Already 2300 students were turned away by the University of CA in 2008 and that is expected to grow in the next few years. As a result teachers will lose their jobs, less classes will be offered, and students will be turned away.

31. BACKGROUND In July, 2011 Governor Jerry Brown approved budget cutting state funding for CSU by $650million for 2011-2012 CSU Board of Trustee implemented a 12% tuition hike, increasing tuition by $249 per semester for full-time undergraduate students California is undoubtedly in the midst of a financial crisis that demands a solution, but CSU budget cuts are NOT the solution Cuts to higher education limit societal investment in a far more valuable educated citizenry 

32. KNOWLEDGE IS POWER  Thomas Jefferson was a strong proponent of public education Education as man's greatest protection in the political process Allowed citizens to have the capacity to have a shared influence over government  Successful government could not coexist with an ignorant populous  More educated constituency in CA would in turn make for a more effective government and political system in CA

33. SOCIAL BENEFITS OF HIGHER EDUCATION Social Democrats measure efficiency through social costs, not just financial figures Center for Community Engagement (formerly Office of Community Service Learning) - CSU was the 1st higher education system in the country to establish an office of this kind In 2007-08 approximately 50% of CSU students took part in community service projects, totaling 32 million hours of service, or $624 million in in-kind services Contributions in the work force - example: CSU awarded 82% of bachelor's degrees in social work in 2007 Long term: affordable public education --> equal opportunities --> greater earnings --> contribute more to CA (economically and socially) 

34. Pro Conclusion Governor Brown’s cut is a five year deal to get CA back in good economic standing. Does create a burden on universities and colleges, however; they have ability to help.

35. Can increase tuition costs.Control student attendance.Control their budgets.

36. Copy of letter to CSU Long Beach regarding salary As reported in California Newswire link from California Governor website.

37. In 2008 Nat’l Center for education Statistics reported that 65.4% of high school graduates went to college in California This ranks California as a middle state nationally.

38. WHO IS GOING TO COLLEGE? College-Going Rates of High School Graduates: 2008 WA ME MT NH ND OR MN VT NY WI ID SD MA MI WY PA CT RI IA NE NV OH NJ IL IN DE UT WV CO VA MD CA KS MO KY NC DC TN AZ OK NM AR SC GA MS AL TX LA FL AK Top Ten States Bottom Ten States Middle States HI 38 Source: National Center for Education Statistics’ Digest of Education Statistics

39. So of attending college how many stay and Graduate? Community college level typically a two year Associate’s Degree and finish or transfer University Level typically four year’s to earn a Bachelor’s Degree

40. WHO IS GETTING ASSOCIATE DEGREES? Three-Year College Graduation Rates for Associate and Certificate Students: 2009 WA ME MT NH ND OR MN VT NY WI ID SD MA MI WY PA CT RI IA NE NV OH NJ IL IN DE UT WV CO VA CA KS MO KY MD NC DC TN AZ OK NM AR SC GA MS AL TX LA FL AK Top Ten States Bottom Ten States Middle States No Data HI 40 Source: Integrated Postsecondary Education Data System’s Data Center

41. The National Public Average for 3 year college graduate is 29.2% California graduation rate for a three year graduate is 38.2 %. Almost 10% higher than the national avg.

42. WHO IS GETTING BACHELOR DEGREES? Six-Year College Graduation Rates for Bachelor Students: 2009 WA ME MT NH ND OR MN VT NY WI ID SD MA MI WY PA CT RI IA NE NV OH NJ IL IN DE UT WV CO VA CA KS MO KY MD NC DC TN AZ OK NM AR SC GA MS AL TX LA FL AK Top Ten States Bottom Ten States (with ties) Middle States HI 42 Source: Integrated Postsecondary Education Data System’s Data Center

43. For Bachelor’s Degree Nat’l Avg is 57.4% for a SIX yr graduation The California rate is 64.4% this is close to the national average and we are in the top ten states.

44. Part of the issue is that students are taking longer to get their degrees Education is important, yes But being a student forever is not helping anyone. Students by paying a higher tuition out of their pocket have more motivation to finish their education timely and not drag it out, and take it more seriously.

45. Excerpt from San Luis Obispo Tribune Here’s what has happened at Cal Poly, and the tale is similar at the other CSU and UC campuses: Twenty-five years ago, California taxpayers provided Cal Poly with 90 percent of the money needed for each student’s education; today, the state pays only about 41 percent of the cost of a Cal Poly education. At the level of the CSU, the budget is less than that of 13 years ago, yet the system serves an additional 70,000 students. In the past four years alone, Cal Poly’s annual state funding has declined by 40 percent, plunging from $150 million in state support to about $89.5 million this year, with an additional midyear cut looming.

46. What does this mean for CPP? Cal Poly’s tuition will be less than $8,600 annually, still one of the best values in higher education. Further proof of that can be found in the fact that despite recent increases, Cal Poly continues to receive about 40,000 applicants each year vying for about 4,500 seats.

47. Questions?

48. Overall Economic Effect of Budget Cuts