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CSU mulls fiscal woes, pending deficit, but OKs president pay hikes of 10%
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LOS ANGELES (AP) — California State University leaders on Tuesday wrestled with ways to resolve a grim financial picture as they approved 10 percent pay hikes to two new campus presidents.

Executive Vice Chancellor Ben Quillian told the board that the 23-campus system faces deficits ranging from $177 million to $427 million for the 2012-13 fiscal year.

The final amount will depend on whether voters approve tax increase measures in November and whether CSU accepts a "tuition buyout" deal offered by the state Legislature.

If voters reject the tax measures, CSU would lose $250 million in funding. Meanwhile, if CSU accepts the buyout, it would lose $132 million in revenue from a 9 percent tuition increase this fall in return for an extra $125 million in funds for 2013-14.

Chancellor Charles Reed said accepting the deal would create "an administrative nightmare" because about 300,000 of the system's 430,000 students have already paid their fall tuition.

The university could offer tuition credit instead of refunds, if trustees decide to roll back the fee hike, he said.

Reed noted the system stands to immediately gain $132 million from the tuition increase.

"It's not the greatest deal in the world," he said.

Even without those factors, CSU faces a $130 million structural deficit caused by $750 million in funding cuts since 2007-08, as well as $47 million in increased health and pension costs, Assistant Vice Chancellor Robert Turnage said.

"We still have a $130 million nut to crack no matter what happens with the tax measures," he said.

Turnage outlined a series of options to close the deficits, including tuition increases, layoffs, enrollment cuts and employee pay reductions.

The board took no action on finances on Tuesday. It is slated to decide on a budget plan at its September meeting.

However, it approved salaries for four new campus presidents, two of whom were given the maximum raises of 10 percent, or $29,000, over the outgoing presidents' salaries.

Diane Harrison at CSU Northridge will earn $324,500, and Tomas Morales at CSU San Bernardino will earn $319,000.

A third president received a 9 percent raise: Leslie Wong will earn $324,000 to lead San Francisco State.

A fourth new president will see his pay reduced from his predecessor's earnings. Retired Admiral Thomas Cropper will earn $250,000, 3.5 percent less than the previous president of the California Maritime Academy.

All four will receive a $1,000 monthly car allowance. Harrison and Cropper receive free campus housing, while Morales and Wong each receive a $60,000 annual housing allowance.

A series of students and union leaders denounced the pay boosts.

Rich Anderson, president of the union representing 6,000 teaching assistants and tutors, called giving raises while talking about cutting pay and laying off employees "a crass double standard."

"Where's the shared sacrifice in that?" he said.

Reed defended the raises, noting that he was criticized for hiring San Diego State University President Elliot Hirshman last July at a $400,000 salary, sparking the ongoing criticism.

During the year, Hirshman has raised $71 million for the campus, $21 million more than his goal, Reed said.

"Elliot has been criticized. I have been criticized. It is totally wrong," he said. "These are tough jobs. They work 24/7."

Under the compensation policy adopted in May, the board set a raise cap of 10 percent but stipulated that the amount of the raise must be paid for by campus foundations.

Reed stressed that foundations will raise money separately for the pay increases. "No funds from the foundations will be coming from any financial aid or student scholarship money," he said.

The policy was adopted after a firestorm of criticism over boosting presidents' pay during a period of drastic belt-tightening.