The California State University system essentially has no way to avoid painful cuts, university trustees were told Tuesday.
In a budget presentation that illustrated just how untenable the 23-campus system's finances have become, administrators told trustees the university risks bankruptcy unless it cuts at least $130 million.
"We have to come up with a way to take our spending down or we'll be joining our brothers in San Bernardino," said Chancellor Charles Reed, alluding to the Southern California city's recent decision to file for bankruptcy.
The sobering discussion was meant to prepare trustees for a difficult September decision on how to prepare for a crucial statewide vote in November. The university's budget, like that of the 10-campus University of California, is heavily dependent on a ballot initiative championed by Gov. Jerry Brown that would raise sales and income taxes.
If the measure passes and the schools freeze tuition at last year's levels, each university will receive a $125 million boost in 2013. If voters turn down the tax hikes, each university will instead lose $250 million after the election, likely leading to tuition increases.
Cal State trustees have already raised tuition for the upcoming schools year by more than 9 percent. Under Brown's budget deal, the university would need to roll back tuition to last year's level and refund millions of dollars to students. Reed called the scenario "an administrative
Even the rosiest outlook -- the tax measure passes and Cal State keeps tuition at the higher rate -- would leave the university with a $177 million deficit this year, said Benjamin Quillian, the system's chief financial officer. The worst-case scenario would be a $427 million hole, he said.
"It cannot and will not be business as usual," Quillian told trustees.
Cal State trustees also threw their weight behind Brown's tax plan Tuesday, but not without disagreement. Some board members complained that the governor was forcing the university into an unfair choice: Back the initiative or lose hundreds of millions of dollars.
Student leaders also announced the California State Student Association, which represents some 426,000 students at the 23 Cal State campuses, had voted to support the governor's tax measure.
UC regents on Wednesday will discuss a contingency plan to raise tuition more than 20 percent if the tax measure fails.
Matt Krupnick covers higher education. Contact him at 510-208-6488. Follow him at Twitter.com/MattKrupnick.