Editor’s note: This story was originally taken down to correct factual errors. The Spartan Daily regrets these errors.
San Jose State political science senior Helena Almazar voiced her concerns regarding the university’s $92.7 million budget deficit for the 2020-21 fiscal year. Despite this deficit, tuition fees remain unchanged by the California State University system.
Almazar said SJSU students shouldn’t be forced to pay full-priced fees for buildings that are not fully operating during the Fall semester, like the Student Union and the Spartan Recreation and Aquatic Center (SRAC).
“By the time [the university] gouges us out of all of our money, [students] won’t even have money to have a car to put in their fancy new parking lots that [administrators] keep building,” Almazar said.
The CSU news website stated that the coronavirus has dramatically affected campus housing, dining and parking enterprises on all 23 campuses because students are not on campus to take advantage of them, though it doesn’t result in a significant decrease in costs for the university.
“The vast majority of our costs are still in place and the biggest piece is faculty and staff salaries and benefits,” stated Ryan Storm, assistant vice chancellor for CSU budget, on the CSU website. “We can’t shed those costs and lower tuition because they’re tied in with people who are still delivering services and instruction to students.”
The Student Union remains open from 8 a.m. to 3 p.m. each weekday, which consists of half of the eateries including Starbucks, for the more than 850 students and 55 student staff who are living in university housing or periodically coming to campus, according to an SJSU newsroom post Oct. 1.
The newsroom post stated that the Spartan Food Pantry, Spartan Bookstore, SJSU CARES operations, SRAC and Student Health Center are also open during the week. SRAC has been offering exercise activities, 45-minute interval lap swims in the pool and virtual classes including at-home workouts, intramural gaming tournaments and outdoor adventure virtual trips.
The more than $92 million budget deficit includes changes in the enrollment net and Spring refunds like housing and meals and parking. According to the August 2020 update on the SJSU Administration and Finance Division website, Athletics is projected to lose about $3 million.
But Kenneth Mashinchi, SJSU senior director of media relations, said that projected revenue loss is incorrect because the SJSU football team will be starting an eight-game season.
Almazar said the university could be doing more to aid its students.
“There are definitely areas that [the university] could downsize, such as the continuous building and renovations that [administrators] make to help us with our tuition,” Almazar said.
Charlie Faas, vice president for administration and finance, and Kenneth Mashinchi both discussed the effects of the pandemic on the university’s budget in a video posted on the SJSU Newsroom website on Sept. 23.
“Let’s see how we can get out of this deficit,” Faas said.
He said in the video this is the largest and most serious budget deficit the university has ever faced. The financial shortfall is partially because of tuition loss from international students and out-of-state students in Fall 2020.
Faas said the budget reductions are tied to the COVID-19-related expenses, which add “huge deficits” to the university revenue streams. He said fewer students living in the dorms accounts for nearly half of the university’s financial losses.
Mashinchi said parking, dining, athletics and canceled events are minor factors contributing to the deficit. Faas said, moving ahead, the university has to make changes and compromises.
He said in the Sept. 23 Newsroom post, that even though financial shortfalls are expected over the next three years, SJSU will continue to work toward achieving the goals stated in the Transformation 2030 strategic plan, which entails the university’s goals to educate, engage and renew the infrastructure of buildings on campus.
“A lot of students that I know have taken gap years because being taught online isn’t worth the money to them,” Almazar said. “And I agree.”
About 80% of the university’s $377 million budget is for labor-related costs, which accounts for salary and benefit expenses for faculty members, staff and student employees. This percentage will remain relatively fixed and flat throughout the 2020-21 school year, according to the CSU Operating Budget Updates website.
CSU system budget overview
In July, California State University Chancellor Timothy P. White wrote to CSU faculty members and staff over email that the financial challenges were caused by the COVID-19 pandemic.
He added how the pandemics’ effects would be felt by the CSU system for at least the next three years, according to a July 20 letter from the chancellor of the California State University, San Marcos News Center.
White said the CSU system is planning to reduce expenses by slowing down system wide hiring. He also said they will reduce travel for all campus activity, including the Chancellor’s Office and considering a furlough program for the next fiscal year.
White said he expects there to be some layoffs during the 2021-22 school year in a Sept. 7 article in The Poly Post, California State Polytechnic University, Pomona’s student newspaper.
White assigned each CSU campus president the responsibility of implementing local campus layoff plans, which would be determined by the campus.
He said these plans should be consistent with applicable collective bargaining agreements with the California Faculty Association union.
White took into account input from all 23 CSU campus presidents, system administrators and other stakeholders before making his decision in July.
During a remote town hall meeting on Aug. 19, White said that the CSU system began building a budget reserve after the 2008 financial crisis to combat situations like this, according to a Sept. 7 article in The Poly Post.
White said these reserves helped the CSU system to minimize the economic effects of the pandemic, but layoffs and pay cuts are anticipated and are, “not just a problem for this Fall.”
He emphasized this is at least a three-year issue and added that the CSU campuses have gone into the first year reasonably well-prepared in terms of finances.
In a July 20 letter from the chancellor addressing CSU faculty members and staff, White put forth a multi-year plan that was drawn out to mitigate budget shortfalls.
SJSU budget overview
Senior Director of Media Relations Mashinchi said over email that each campus has its own separate budget reserves to manage its individual expenses.
“SJSU will utilize a significant portion [60%] of its reserves, currently $161 million from the general fund and enterprise reserves, which amount to less than five months of funding to support all university operations,” he said.
Faas said in the newsroom video that because this is going to be a multi-year plan, the remaining reserves will largely be expended on university expenses in the next two fiscal years.
The reserved funds enable the university to hire and train new faculty members, improve the campus and provide additional student advising services Mashinchi said.
“By continuing to do these things, we are keeping the student experience as consistent as possible during these trying times,” Mashinchi said.