The Governor announced the proposed 2007-08 budget on January 10th. This proposal supports, with some modifications, the Trustees’ approved budget under the Higher Education Compact. Below is a quick review of the California State University’s portion of the budget.

In the 2007-08 budget proposal the CSU will receive an additional $176.5 million in new state General Fund support and $123 million in new fee revenue associated with an enrollment increase of 2.5% and the Governor’s support of a 10% increase in student fee rates to fund CSU budget priorities.

This represents a 7.4 percent increase over state General Fund and student fee revenue CSU received in the current year. With these increases, the total general operating budget for the CSU now will be over $4.3 billion, with just under $3 billion coming from the state General Fund and roughly $1.3 billion from fee revenue. The total Governor’s Budget revenue increase for 2007-08 is $299.5 million.

The Administration is not proposing to augment the CSU budget by $65.2 million to avoid a 2007-08 increase in undergraduate and graduate student fees. Instead, the Governor’s Budget includes revenue associated with a 10 percent increase in fees paid by undergraduates, graduates, and students enrolled in teacher credential programs.

To achieve the Governor’s Budget revenue projection, undergraduate fees would increase by $252 to an academic year rate of $2,772. Fees for students in teaching credential programs would increase by $294 to an academic year rate of $3,216. Graduate student fees would increase by $312 to an academic year rate of $3,414. The total revenue expectation from a 10 percent fee increase is $97.7 million, with one-third of that amount ($32.6 million) set aside for financial aid grants.

The budget includes the augmentation of $2 million the Board requested above Compact funding levels to increase our efforts to produce more K-12 math and science teachers. However, the $2.5 million CSU requested for the second year, 163 FTES, enrollment cohort of our Master’s-level nursing program and the $4.3 million requested above Compact funding levels to increase undergraduate nursing programs by 340 FTES was not funded. The university retains flexibility to direct $50 million in General Obligation bonds for capital renewal and renovation. The Governor proposes $346 million from the Higher Education Bond of 2006 and other higher education bonds for 26 projects for the construction and renovation of buildings.

The Administration proposes to delete $7 million from the university budget for campus outreach programs and systemwide academic preparation. The University of California outreach program also was reduced by $19.3 million, making it likely that the legislature will support restoring this funding in the final budget.

In addition, the CSU will also advocate for the $25 million requested by the Board above Compact funding levels to fund critical student services for disabled students; advising, counseling and tutoring; articulation; and grants to increase underrepresented and disadvantaged students’ higher education access and retention.

Finally, the proposal does not include the additional one percent increase ($27.6 million augmentation) for compensation requested above Compact funding levels which would have been used to fund the Trustees' multi-year plan to bring CSU employees’ salaries up to market levels.

The Legislative Analyst’s Office will review and release its analysis of the Governor’s budget proposal by mid-February and legislative hearings will begin on the California State University budget the first week of March.

For more information: California Department of Finance website.