Proposed State Budget
Includes Funding Increase
A proposed $211.7 million in new revenue
for the CSU system's 2005-06 budget will include an increase
in general operations funding and financial aid for students.
February 3, 2005
Honoring the higher education compact
with the California State University, Gov. Arnold Schwarzenegger
has proposed $211.7 million in new revenue for the university
system’s 2005-06 budget.
The proposed revenue fully funds the CSU budget
request and represents a 4.4 percent increase in general fund
support. If approved, the proposed budget would provide state
general fund revenue of approximately $2.6 billion for the
CSU, including a 2.5 percent increase, or $63.7 million, for
enrollment growth in 2005-06.
“We are encouraged by the support the
CSU is receiving from the governor in this budget cycle,”
said CSU Chancellor Charles B. Reed. “Funding for enrollment
growth begins to restore student access from the previous
year’s enrollment decreases and reductions in CSU operations.
It also enables the CSU to continue producing job-ready graduates
for a wide range of California industries, helping them to
remain competitive in the global economy.”
The 2005-06 budget includes a general operations
increase that will provide $88.1 million to support a 3.5
percent compensation increase for faculty and staff, effective
July 1, and designates $23.3 million for financial aid, which
brings the State University grant funding to $232.6 million,
or 101,200 state grants.
Based on the compact, the CSU would receive
$101.2 million in student fee revenue generated by a fee increase
effective in the fall. The budget requests an 8 percent state
university fee increase for undergraduates and students enrolled
in teacher credential programs, or $186 and $216, respectively,
for a full-time student. Fees for graduate students will increase
by 10 percent, or $282.
Under this budget, undergraduate students will
pay $2,520, teacher credential students $2,922 and graduate
students $3,102 annually in state university fees.
The compact funding provided in the governor’s budget
begins to restore student access, employee compensation and
mandatory costs for health and dental benefits, new space
and increasing insurance and energy costs. The governor’s
budget authorizes a $44.4 million increase for 2004-05 employer-paid
PERS retirement benefits. The budget has been reduced by $11.9
million to reflect lower charges for retiree dental benefits
and to remove one-time discre tionary funding CSU received
in 2004-05.
Over the past three years, the CSU has seen
a net budget reduction of $522 million that resulted in enrollment
reductions, cuts in student services, and an inability to
make progress on a growing faculty and staff salary gap.
The higher education compact is a six-year
agreement from 2005-06 through 2010-11. It promises to fund
at least a 2.5 percent annual enrollment growth, allowing
the CSU to stem enrollment decreases experienced in 2004-05.
It also provides a 3 percent minimum general fund increase
in 2005-06 and 2006-07, and a 4 percent minimum increase in
2007-08 through 2010-11 for basic needs, including salary
increases, health benefits, maintenance and inflation. For
2008-09 through 2010-11, the compact provides an additional
1 percent for core academic needs.
Next steps in the budget review process include
the following timelines: February, budget review by Legislative
Analyst’s Office; March/April, budget subcommittee meetings;
May, governor announces May revise to the January budget projections;
June, two-house conference committee and deadline for budget
adoption.
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