Calif. ‘dug itself into a hole’

Budget cuts will be carrying over to the 2009-2010 school year while other budget plans are still being decided on.

Students will have to bear through another 10 percent student fee increase as the California State University system makes $66.3 million in budget reductions permanent.

“[The budget reduction] is projected to achieve $130 million in revenues, with one-third set aside for student financial aid,” said CSU Chancellor Charles B. Reed in a letter to his employees.

As for students supported by Cal Grant A and B, their state university fee will be postponed until money for Cal Grants arrive, said Teresa Ruiz, public affairs communication specialist for the CSU Office of the Chancellor.

The CSU system will also have to pay more than $67 million — $29 million in shutdown costs and $38 million in legal costs — for unfinished construction projects on CSU campuses.

The money will pay for resources to protect the weathering of the concrete and steel construction sites but the CSU is unable to stop ongoing deliveries of raw material.

Ceasing construction affects 2,000 current projects throughout the CSU system and 200,000 construction workers, Cal State University Long Beach President F. King Alexander said.

According to Alexander, it is costing CSULB at least $10,000 to stop current construction projects. While this includes the payment of some contractual obligations, the majority of the cost goes to making an abandoned site stable and safe for the campus community.

California’s dwindling credit rating, now tied with Louisiana for the lowest in the nation according to Moody’s Investors Service, and the possibility that the state’s general obligation bond rating may be downgraded as well will create even more problems for current and future constructions, Alexander said.

The construction projects will be delayed because California’s bonds will be seen as unattractive and risky, Alexander added.

There is no date set for when construction can restart as funds would need to be cut from other operations. Ceasing construction affects 2,000 current projects throughout the CSU system and 200,000 construction workers, Alexander said.

“California has dug itself into a hole and doesn’t seem to want to climb out,” Alexander said.