CSU Trustees Approve 2008-09 Budget Request

System Asks for an increase of $322.7 Milllion

November 19, 2007

FROM THE CSU PUBLIC AFFAIRS OFFICE

The California State University Board of Trustees Nov. 14 approved a $4.8 billion budget request to the state for fiscal year 2008-09, which assumes a $322.7 million budget increase over last year’s budget.

The budget consists of $3.3 billion from the state General Fund and $1.4 billion from student fee revenue.

The assumed budget augmentation of $322.7 million meets the provisions of the Higher Education Compact to fund 2.5 percent enrollment growth, or an additional 11,000 students, as well as a 5 percent increase in general operations and core academic support needs. Included in this augmentation is $34.4 million from fee revenue associated with enrollment growth, and $73.2 million in place of a 10 percent student fee increase in the 2008-09 fiscal year.  

In addition, the CSU is requesting $155.2 million in above compact proposals needed to address critical priorities of the university. Such priorities include increasing the number of tenured faculty; providing an additional 1 percent in compensation for all employees; funding an additional 1 percent enrollment growth; student services initiatives; applied research in agriculture, biotechnology, fresh water and marine studies; conducting a teacher performance assessment to meet the requirements of SB1209; and expanding enrollment in CSU nursing programs.

“Over the past three years the Compact has provided funding for student access, resources for libraries, technology, financial aid, energy costs and the ever-increasing health benefits for our employees,” said CSU Board of Trustees Chair Roberta Achtenberg. “We are optimistic that the governor and the legislature will continue recognizing the critical role the CSU plays in workforce preparation as well as providing above compact funding to support high priority needs of the university.”

Enrollment
Under the compact the CSU is expected to receive funding to support approximately 445,000 students, including the 2.5 percent enrollment growth in the request. But, the CSU anticipates an enrollment of approximately 449,000 resident students in 2008-09, or an additional 4,000 students not funded in the budget. The cost of the 4,000 students education would be absorbed by the CSU if the university system does not receive additional funding.

Since 2005-06, the CSU has absorbed the cost of over enrollment by increasing class sizes when possible, and temporarily opening more course sections. But the CSU will not be able to continue over-enrolling students without additional funding. Therefore, in 2008-09, the CSU is requesting an additional $27.5 million that would fund approximately 4,000 additional students. This request merely begins to address the current over enrollment trend, and represents 1 percent enrollment growth above of the 2.5 percent funded by the Compact. If the additional funding is not approved, it will become difficult to serve the additional students.

Fees
The 2008-09 budget request does not call for State University Fee increases and assumes state funding of $73 million to maintain fees at the 2007-08 level.

Under this budget plan, student fees will remain at $2,772 for undergraduates, $3,216 for teacher credential students and $3,414 for graduate students. In addition, students pay campus fees, which average $749. [Cal State Fullerton currently charges a undergraduates taking seven or more units $1,651 per semester or $3,302 per year, graduate students taking more than seven units $1,972 each semester or $3,944 per year and credential students $1,873 or $3,746 for seven or more units.] Non-resident students pay $10,170 plus the applicable state university fee and campus fees.

Under this budget, CSU students will continue paying the lowest fees among comparison institutions. The 2007-08 resident-undergraduate-fee average at comparison institutions is $7,122, more than double CSU’s average fee of $3,521 for undergraduate students.

If the state does not provide enough funding to keep fees at current levels, a fee increase would be necessary. The Committee on Finance approved a motion by Trustee Herbert Carter stipulating that if a fee increase were necessary, it will be discussed and approved no later than the March 2008 Board of Trustees meeting, to allow enough time for students to plan for it before the Fall term.

Compensation
The budget includes a 3 percent ($91.1 million) compensation increase for faculty and staff and 2.83 percent ($86 million) to address faculty and staff salary lags. The California Postsecondary Education Commission had projected a CSU faculty salary lag of 19.1 percent for 2007-08, but the actual lag, after the faculty contract agreement was reached in March 2007, is 12.9 percent. Over the next three years, the CSU plans an annual 3 percent compensation increase for all employee groups and additional compensation increases to reduce salary lags. The estimated cost between 2008-09 and 2010-11 to fund the 3 percent annual compensation increase for all employees is $296.3 million, and to address salary lags is $245 million, for a total compensation cost of $541.3 million.

“This budget request positions the CSU to maintaining access and academic quality,” said CSU Chancellor Charles B. Reed. “We are asking the state to fund enrollment growth, provide revenue to avoid an increase in student fees, and support compensation increases that will help the system make progress toward its goal of paying market-competitive salaries for faculty and staff.”

The CSU budget was formed in consultation with members of the Board of Trustees, campus presidents, CSU Academic Senate, and the System Budget Advisory Committee.

Lt. Gov. John Garamendi, an ex-officio member of the Board of Trustees, disagreed with the budget’s provision for a student fee increase if the governor and legislature do not provide enough funding for CSU operations. He voted against the budget recommendation.     

Detailed documentation on the 2008-09 CSU budget is available at http://www.calstate.edu/budget/2008_09BudIndex/SupportBdgt_Book2/SupportBudget_Book2.pdf .

Next Steps: Adoption of the state budget is planned under the following schedule:
November/December — Meetings with Governor’s office and Department of Finance
January — Governor required to submit balanced budget to legislature
February — Budget review by Legislative Analyst Office
March/April — Budget subcommittee meetings
May — May Revise to January budget projections
June — Two-House Conference Committee and official deadline for budget adoption.

The California State University is the largest system of senior higher education in the country, with 23 campuses, approximately 450,000 students and 46,000 faculty and staff. Since the system was created in 1961, it has awarded nearly 2.5 million degrees, about 89,000 annually. See www.calstate.edu http://www.calstate.edu/