As COVID-19 continues to rage across California, university campuses statewide are facing fiscal challenges they haven't experienced in more than a decade. For Cal Poly Pomona (CPP), that means grappling with a $20 million reduction in State general fund allocation for fiscal year (FY) 20-21 brought on by the unprecedented global pandemic.

This Budget Brief is the first in a new series of stories being launched on PolyCentric that aims to keep the campus community informed on how California's current financial crisis will affect Cal Poly Pomona's bottom line and what actions the university is taking to close the gap and balance the budget.

"These are challenging times. The economic impact of the COVID-19 pandemic has hit our state hard along with funding for higher education," said University President Soraya M. Coley. "Many of us went through the budget struggles of the 'Great Recession,' and I understand the intense trepidation such situations can create. In response to this historic challenge, Cal Poly Pomona is taking a careful and measured approach to the budget that foremost prioritizes student success. We are making progress, and we have the people in place to achieve our budget-related objectives."

Current Budget Status

The university hosted a Campus Conversation on the Budget on Oct. 29, mostly attended by faculty and staff, and a similar Student Townhall on Dec. 3 to outline the current budget situation.

Joe Simoneschi, associate vice president of finance and administrative services, and interim chief financial officer, said at both meetings that before the pandemic, the California State University system expected to get a $199 million budget increase for FY 20-21. With California facing a $53.4 billion deficit, that is no longer possible and constraints to the state budget are likely to persist over the next three years, with the possibility of further reductions in fiscal year 2021-22 looming.

Actions Cal Poly Pomona is Taking

Cal Poly Pomona is implementing multiple strategies to weather the reduction and balance the budget for FY 20-21, as well as better prepare for any potential future reductions in FY 21-22 and FY 22-23.

Those strategies include:

• Tapping reserves and reducing divisional budgets: Cal Poly Pomona will use $3.3 million (one-time funds) from economic uncertainty reserves, and $1.25 million of savings from utilities and absorption of $3.7 million in benefit costs, to help close the gap and minimize the impact to divisions.
• Containing costs: The university has instituted a hiring chill and a travel freeze, cut discretionary spending, and in some areas delayed capital projects.
• Creating the Voluntary Early Exit Program (EEP): The program gives CalPERS retirement-eligible employees the option to voluntarily separate from the university with a severance package. The program opened Oct. 5 and closes Dec. 11. Information about the number of confirmed participants and the cost savings expected won't be known until after the program closes.
• Increasing Revenue: The university is exploring ways to increase revenue, which would include using technology to improve service and cut costs and providing more adult learners with an opportunity to gain skills needed for in-demand jobs through innovative programs offered through the College of Extended University.

Other measures include maintaining communication with employee union representatives, the Academic Senate and the Chancellor's Office and using federal funds to support students, faculty and staff such as the $15.4 million in CARES Act student aid to 18,863 students distributed during the summer. The university is in the process of identifying areas to support with an additional $15 million in CARES Act institutional aid and $2 million in Minority Serving Institutions federal funds for faculty and staff professional development (to redesign courses and transition to virtual instruction); purchasing technology (such as 475 laptops and 400 hotspots for students, faculty, and staff); and emergency protective equipment.

What the Challenges Mean for the Campus Community

University officials said at this time there are no plans for furloughs or layoffs at CPP this fiscal year.

"While it's too early to say if we'll need to take such actions in the future, we will only do so when all other options have been exhausted," said President Coley. "We're doing everything possible to retain permanent personnel during this time." While there's a hiring chill, only key positions will be filled based on need for mission-critical work.

Even with the pandemic, Cal Poly Pomona saw an increase in both resident tuition and fees due to over-enrollment. The Southern California campuses of the CSU have been able to admit additional students so we can continue to educate and award degrees. It is estimated that by the year 2030, there will be a need for 1 million more students who have graduated with a bachelor's degree entering the workforce.

Simoneschi said over-enrollment funds strategic initiatives at CPP such as tenure track faculty, advisor-to-student ratios and basic needs initiatives.

"Cal Poly Pomona is very fortunate not to be experiencing an enrollment decline as seen nationally," said Jessica Wagoner, senior associate vice president for enrollment management and services. "In fall 2020, we welcomed our largest class ever with over 4,300 first-time freshmen and 4,300 new transfers."

She projects that Cal Poly Pomona will meet, and likely exceed, enrollment goals this academic year. Cal Poly Pomona continues to be a destination campus, is the highest-ranking polytechnic university for upward social mobility in the nation, has the overall affordability and reputation students like and fulfills the desires of students to stay local and close to home due to the pandemic, she said.

During the Campus Conversation on the Budget and the Student Townhall, administrators fielded questions regarding fees and why some of them are still being collected with the campus closed. They responded that because instruction and related expenses are continuing, it is not appropriate to reduce tuition or mandatory campus fees, except in very limited circumstances, as this could lead to increased employee layoffs, and would adversely affect course availability, academic programs, and time to graduation.

"To ensure that the university can make its programs and facilities available to students now and in the future, they must be financially supported and maintained during the pandemic," said Coley. "We have looked at how what you're getting might be provided in a different mode, but it's still accessible. The campus is not closed. We have just moved into a different mode."

Terri Gomez, associate provost for student success, equity and innovation, echoed Coley, sharing that advisors, tutoring, as well as support programs such as Renaissance Scholars, Project SUCCESS and Maximizing Engineering Potential, among others, remain fully operational for students, even though it's in a virtual environment.

The university has recently posted a new set of budget FAQs, as well answers to questions from the Campus Conversation on the Budget (this page also includes the presentation and video of it), and has pledged to post Q&A from the Student Townhall as well.

What's Next?

Gov. Gavin Newsom is expected to release his budget proposal for FY 21-22 in January, so Cal Poly Pomona will begin to understand then if there are any additional reductions to the general fund for CSUs. However, the university is planning for fiscal impacts beyond the current year to be ready.

Another Budget Brief will be posted in early 2021 as additional details unfold.