Feb. 2, 2006

Gov. Arnold Schwarzenegger has proposed $215 million in new revenue for the California State University. The proposal, announced Jan. 10, fully funds the trustees' budget request for 2006-07 based on the Higher Education Compact and provides enough funds to eliminate student fee increases scheduled for fall 2006.

The proposed budget provides nearly $2.8 billion in state general fund revenue to the CSU, which represents a 7.3 percent increase over the current budget year appropriations. Also included is $54.4 million above the state's general fund commitment within the Higher Education Compact to eliminate the proposed fee increases of 8 percent for undergraduate and 10 percent for graduate students.

“The governor's budget proposal is good for the students, their families and the CSU,” said Chancellor Charles B. Reed. “The elimination of the fee increase provides financial relief to middle-class students, affording them more time to study and less time working to pay for the additional fee increase.

“The 2006-07 budget augmentation for the CSU reinforces the governor's commitment to offer more students an opportunity to achieve a college degree and to meet the demand for an educated workforce that can only strengthen California's future economy.”

As agreed to in the compact, the budget provides a 3 percent general fund increase ($75.8 million) for general operations, and $57.7 million for a 2.5 percent enrollment increase. This will open university doors for more than 11,000 additional students and increase total enrollment in the CSU to approximately 435,400 students.

“The CSU was subject to three years of budget reductions that resulted in a loss of $500 million to the university,” said Richard West, CSU executive vice chancellor and chief financial officer. “This budget recognizes and begins to address some critical funding issues faced by our campuses, as well as the impact of those budget reductions on students, faculty, and the delivery of education in the classroom.”

In addition to the base compact funding, the governor supported $2.3 million to expand masters-level nursing programs, and an augmentation of $1.1 million to increase the number of kindergarten through 12th grade math and science teachers.

The CSU plans to use $77.4 million of the Higher Education Compact monies to fund a 3 percent compensation pool for all employees and also initiate a five-year strategic plan to begin reducing salary lags for all CSU employees.

Combined, they represent an overall compensation increase pool of 3.64 percent for 2006-07. With respect to the compensation for represented employees, the amount of such compensation shall be subject to collective bargaining for the 3 percent compensation pool, as well as increases to reduce salary lags.

If the legislature approves the fee elimination as proposed by the governor, CSU students will pay state university fees at current year levels in 2006-07: $2,520 for undergraduates, $2,922 for teaching credential students, and $3,102 for graduate students. The CSU continues to have the lowest fees in the country among comparable public institutions.

The next steps in the budget review process include the February budget review by the Legislative Analyst's Office, followed by the budge subcommittee meetings in March or April and the governor's announcement of the May revise of the January budget projections. June 15 is the official deadline for legislative budget approval.

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