Governor’s Budget Provides $4.3 Billion for California State University

Proposed Plan includes a $7 million reduction of funds for outreach programs

January 16, 2007

Gov. Arnold Schwarzenegger has proposed a $299.5 million increase for the California State University, which would fully fund the trustees’ 2007-08 budget request, announced the CSU Chancellor’s Office Jan. 10.

The proposed budget provides $3 billion from the state General Fund and $1.3 billion from student fee revenue. It also recognizes the funding agreement under the Compact for Higher Education, which provides a four percent or $108.9 million increase for general operations, $65.5 million for enrollment growth of 2.5 percent to fund an additional 11,000 students, and $2 million to continue CSU efforts to increase the number of K-12 math and science teachers.

The 2007-08 Governor’s budget assumes nearly $123 million in student fee revenue based on a 10 percent increase in student fees and fee revenue associated with the 2.5 percent enrollment growth, said system officials. In addition, it includes a $7 million reduction from funds currently used to support campus-based outreach programs.

“We appreciate the administration’s recognition that fully funding the compact is imperative to meeting the minimum funding priorities in the CSU budget, but have concerns over the reduction in outreach programs,” said CSU Chancellor Charles B. Reed. “We will renew our efforts with the governor and the legislature to demonstrate the overwhelming benefit of outreach programs on student success to graduation.”

The CSU had requested an additional one percent funding above compact to endow a multiyear plan to reduce salary lags between CSU employees and national benchmarks. Although not funded, Chancellor Reed said the CSU will seek additional means to address employee salary lags.

“CSU salaries for most employee classifications are below average. The CSU needs to address these lags to maintain a competitive market position for employee recruitment and retention,” Reed added.  

The CSU’s funding priorities were formed keeping an eye toward long-range goals and needs of the university, and in consultation with members of the board of trustees, campus presidents, CSU Academic Senate representatives, and System Budget Advisory Committee members. According to the system, the budget begins to address critical campus funding issues faced as a result of three years of budget reductions.

CSU Budget Expenditure Highlights

• $42 million for mandatory cost obligations, including $28 million for health care benefit increases
• $77.9 million for 2.5 percent resident student enrollment growth (11,000 students)
• $2 million for K-12 math and science teachers
• $38.8 million for State University Grants and financial aid associated with theincrease in student fees and enrollment growth
• $82.8 million for a three percent compensation pool for all employee groups
• $46.7 million to support funding for reducing the salary gap
• $2.15 million to address long-term shortfalls in funding for library acquisitions
• $2.15 million to continue reductions in the backlog of deferred maintenance
• $5 million for academic technology 
• An executive summary of the 2007-08 Support Budget is available for review

Next Steps in the Budget Development Process
February: Budget review by Legislative Analyst Office
March/April: Budget subcommittee meetings
May: May revise to January budget projections
June: Two-House Conference Committee
June 15: Official deadline for budget adoption