COVID-19 Price Tag For California State University: $337 Million, And Rising
Campus shutdowns, the shift to remote learning, and shrinking revenue from sources like dorm fees and student bookstores has hit the California State University system with $337 million in lost income and new costs, according to the university's first tally of the financial impact of the COVID-19 pandemic.
"It is a significant loss in revenue for all 23 campuses," said Mike Uhlenkamp, spokesman for Cal State Chancellor Tim White.
The overall $337 million hit for the spring semester has been softened by about $260 million in federal relief sent to the university system, Uhlenkamp said, and campuses can tap into reserves to make up for some of the rest of the costs.
But the long-term fiscal outlook for the system remains uncertain, according to the California State University Fiscal Status Report, released Tuesday in advance of next week's meeting of the system's Board of Trustees.
"There are several key questions that will not be answered for several months," the report says. "(1) How severe will the effects of COVID-19 be on the current and future state budget, and what will that mean for state investments in the CSU? (2) To what extent will the state's multi-billion dollar reserve mitigate the need for budget reductions? (3) How will a final Fall 2020 state budget — effectively a mid-year budget — disrupt CSU campuses in budget planning and immediate operations?"
Of the overall hit for the spring semester, $287 million resulted from a massive drop in income streams such as student housing and parking, as well as lost revenue at campus nonprofits like bookstores.
"We're probably down in clothing sales since the COVID crisis started about 70%," said Clint Aase, director of the Bronco Bookstore at Cal Poly Pomona.
A typical March and April yields about $600,000 in sales, Aase said, but this year that was down to $210,000. Fall and spring textbook sales were good and the bookstore is seeing steady online sales, but he's worried because commencement has been postponed and the graduation ceremony and related events typically yield big sales in items such as caps, gowns, diploma frames, and alumni clothing.
The Bronco Bookstore sells about 2,300 diploma frames each year, starting at about $150 each. Aase said he's sold about 200 so far. Online sales are keeping the bookstore afloat for now, mostly in items such as laptops and computer cameras for video conferencing. The bookstore hasn't laid off any of its 14 full-time staff people, but it's only employing about six of the 125 students who usually work at the bookstore.
The report expresses similar worries about employees. "If existing conditions persist into the summer and fall," it says, "one of the many challenges the CSU could face is the potential for additional, significant, and precipitous revenue drops. It would be challenging for campuses to reduce costs because of the adverse impact it would have on the employees of those enterprise programs."
The third hit to campuses came in the form of unexpected costs. The report said the university system spent about $50 million it had not anticipated to sanitize facilities, pay workers overtime, and provide hardware and software for the transition to online instruction. CSU's operating budget for the current fiscal year is $7.2 billion.
Cal State trustees will discuss these costs at their meeting next Tuesday. There is no action expected.
Uhlenkamp said the looming topic at Tuesday's discussion will be how the CSU system will prepare for cuts to funding expected as Governor Gavin Newsom prepares to release in the coming weeks his revised budget for next fiscal year.