Meeting Quality and Access

• Enrollment Growth, $69,545,000
• 2004/05 Marginal Cost of Instruction
• State University Fee Revenue
• CSU Historical State University Fee Rates
• 2003/04 CSU and Comparison Institution Student Fees
• 2003/04 CSU Comparison Institution Academic Year Resident, Undergraduate, Student Fees
• CSU Student Fee Waivers
• Financial Aid—State University Grants, $5,767,000
• 2004/05 Compensation Increase, $102,148,000
• Long-Term Need, $25,800,000
• Increase of Tenured/Tenure-Track Faculty —ACR 73, $35.6 million
• CSU Outreach, $12,500,000
• Off-Campus Centers, $3,000,000
• Budget Restoration

Enrollment Growth, $69,545,000

The 2004/05 budget includes enrollment growth of 3 percent or 10,047 fulltime equivalent students (FTES). CSU enrollment growth projections reflect an assessment of actual and projected enrollment data and trends. Each year, the Department of Finance (DOF) Demographic Research Unit prepares California public postsecondary enrollment projections for students in California Community Colleges, California State University system, and University of California (general campus only). CSU’s enrollment growth target for 2004/05 is based on DOF enrollment projections. DOF projects CSU will increase its overall headcount by almost 125,000 students, or 32 percent, by 2011. However, CSU’s actual enrollment usually exceeds DOF enrollment projections. The following chart indicates the differences in CSU funded enrollment targets versus actual enrollment since 1996/97:

The 2003/04 budget reductions caused the CSU enrollment target to be reduced to a level that cut funded growth for the year from 7 percent to a little over 4 percent, a reduction in growth of approximately 9,000 full-time equivalent students. CSU campuses were urged to maintain the quality of CSU instruction and other services, while providing fall 2003 students with needed courses, adequate course loads, and efficient paths to graduation - that is, authentic access - and admitting eligible students for the spring 2004 term only to the extent that authentic access could be maintained.

CSU will maintain a conservative growth plan until California shows signs of economic recovery that can sustain total demand for access in accordance with its mission as defined by the Master Plan for Higher Education.

2004/05 Marginal Cost of Instruction

For each additional student that CSU enrolls, the State provides funding at marginal cost to support instruction and student educational and institutional support services. The current marginal cost rate is based on budget methodology negotiated among CSU, the University of California, the Department of Finance, and the Legislative Analyst’s Office at the request of the Legislature. The negotiated marginal cost rate is a reflection of previous budget allocations to the institution and does not reflect a needs-based calculation of the marginal cost of instruction. This negotiated rate is expected to provide a sufficient base to sustain enrollment growth at comparable levels of service received by students in the previous fiscal year. The program cost factors included in the marginal cost calculation are presented below.

To calculate the marginal cost of enrollment growth, current year CSU program area budgets for Instructional Support, Academic Support, Student Services and Institutional Support are averaged against current enrollments and then discounted by negotiated deflators. The negotiated deflator percentages were designed to adjust for fixed-costs funding included in the average cost per student that typically are not affected by the annual change in CSU enrollment levels.

Faculty costs are based on a negotiated student/faculty ratio of 18.9 to 1. The faculty salary reflects an Assistant Professor, Step III position and intends to reflect the average cost for hiring a new faculty member. However, the actual faculty hire rate at CSU is greater than the cost represented by the Assistant Professor, Step III position. Further, the marginal cost calculation does not recognize increased fixed costs as increased enrollment thresholds.

The marginal cost calculation also includes a component for instructional equipment based on the actual depreciation of equipment at campuses. The instructional equipment depreciation model uses the criteria established by the State for CSU and the University of California. Depreciation on CSU equipment carries an annual cost of over $46 million. This marginal cost component recognizes the portion of costs associated with equipment replacement necessitated by the annual increase in student enrollment.

Marginal cost funding for enrollment growth is discounted by the amount of revenue set aside to fund financial aid for increased enrollment. The marginal cost for instructional services is shown on the following table.

State University Fee Revenue

Revenue associated with the 3 percent enrollment growth or 10,047 FTES is included in the 2004/05 budget plan. Current CSU fee policy requires that one-third of all revenue from the State University Fee associated with this enrollment be used to increase funding available for financial aid grants to students with need and for students eligible for State-mandated fee waivers. Of the revenue projected from enrollment growth in 2004/05, $8.2 million will be available to increase CSU financial aid to students. The remainder is used to satisfy the CSU revenue requirement for marginal cost of instruction enrollment funding and to support CSU educational services.

CSU Historical State University Fee Rates

The CSU systemwide undergraduate, full-time, State University Fee has increased by 29.2% over the past 10 years going from $1,584 in 1994/95 to $2,046 in 2003/04 per academic year. The State University Fee (SUF) was increased 10 percent at mid-year 2002/03 and an additional 30 percent beginning fall 2003/04. Prior to 2002/03, an increase in SUF had not occurred since 1994/95. Further, SUF reductions of 5 percent occurred in both 1998/99 (for undergraduates) and 1999/00 (for all students). The CSU is requesting the State to buy out a 3.4 percent inflationary increase in State University Fee rates for 2004/05 rather than increase fee levels due to prior year increases. The following graph depicts the CSU State University Fee level changes over a ten-year period:

2003/04 CSU and Comparison Institution Student Fees

CSU 2003/04 academic year resident, undergraduate student fees include the systemwide State University Fee (SUF) and campus fees. The total systemwide and campus fees average is $2,572. The total is comprised of $2,046 for the undergraduate SUF (6.1 units or more) and $526 for the average campus-based fees that must be paid to apply to, enroll in, or attend the university. CSU 2003/04 academic year resident, graduate SUF rate is $2,256 (6.1 units or more). Nonresident tuition fees are $282 per semester unit and $188 per quarter unit.

The 2003/04 CSU comparison institution academic year resident, undergraduate student fees are provided below. These institutions have historically been utilized for comparison purposes related to faculty compensation and student fees by the California Postsecondary Education Commission. CSU continues to maintain the lowest fees among the 15 comparison public institutions. The 2003/04 comparison institutions student fee average of $5,272, whereas CSU campus student fees are $2,572. The following table and chart provides the 2003/04 comparison institution fee levels and the change from 2002/03 fee levels.

2003/04 CSU Comparison Institution Academic Year Resident, Undergraduate, Student Fees

CSU Student Fee Waivers

Under current law, there are three State-mandated fee waiver programs: the CSU Cal Veteran Waiver for children of disabled/deceased veterans (Education Code 32320), the Alan Pattee Waiver for dependents of deceased law enforcement or fire suppression personnel (Education Code 68120), and the newly established fee waiver for California residents who were dependents of victims killed in the September 11, 2001 terrorist attacks (Education Code 68121). In addition to State mandated fee waiver programs, other fee waiver programs have been established by Trustee policy, California statute, and collective bargaining agreements that include programs applicable to high school students, California residents age 60 years and older, CSU employee and employee dependents, and graduate and teaching assistants.

The State has not provided General Fund support to fund fee wavier programs since fiscal year 1992/93. However, the CSU has used a portion of funds set-aside for financial aid from enrollment growth revenue to support increases in the number of students eligible for State-mandated fee waivers.

Financial Aid—State University Grants, $5,767,000

In accordance with CSU fee policy, one-third of the marginal cost calculation fee revenue is set aside for student financial aid. CSU uses this revenue to increase the pool of funds available for its State University Grants program and if needed, to fund State-mandated fee waivers for dependents of California veterans, public safety and fire suppression personnel killed in the line of duty and the newly established fee waiver for California residents who were dependents of victims killed in the September 11, 2001 terrorist attacks (Education Code 68121). One-third of projected revenue associated with the 3 percent planned enrollment growth in 2004/05, $5,767,000 has been earmarked for the State University Grant program.

CSU State University Grant Program

The State University Grant program is unique to CSU and in recent years has increased in prominence as a source of grant assistance for CSU students who can least afford the cost of attending college. Since its inception in 1982/ 83, the State University Grant program has provided financial support to offset the impact of fee increases for eligible students. Student eligibility is determined on the basis of need in accordance with the federal need analysis methodology. Each year campuses supply the Chancellor ‘s Office with a financial aid database report that is used to determine and justify the need for State University Grant funding increases and how available funds are allocated among the CSU campuses. In 1994/95 the State University Grant awarding criteria were revised to ensure the neediest students received the largest grant awards. This goal was accomplished by reducing the maximum expected family contribution from $5,000 to $4,000 or less. The sliding scale for awards was modified to reflect awards as a percentage of the fee in increments of $800 family contributions. The preference to first-time freshmen and upper-division community college transfer students was eliminated in order to target funds to the neediest students on the basis of the family’s financial strength.

CSU State University Grant (SUG) need typically exceeds funding available. CSU has not received an increase in SUG appropriations since 1992/93 and had State funding for grants reduced by $14.5 million in 2002/03. Revenue from student fees supporting the SUG program has increased from $6.5 million in 1996/97 to $157.3 million in 2003/04, a 140 percent increase over seven years.

2004/05 Compensation Increase, $102,148,000

The Budget Act of 2003 included budget trailer bill legislation (AB 1756) indicating the Legislature’s intent to preclude any State General Fund support to CSU and UC for compensation increases for 2004/05. However, it is critical that CSU offer compensation that supports retention of highly qualified and motivated staff. The CSU Board of Trustees recognizes compensation for faculty, staff, and management as a key element of the university’s success. The CSU 2004/05 Support Budget includes a 4 percent ($102.1 million) compensation increase for faculty and staff effective July 1, 2004. The actual distribution of the compensation increase would be determined by individual collective bargaining agreements negotiated with represented employees and by policy of non-represented employees. The following table provides the faculty and staff compensation components that derive the CSU 2004/05 cost of a one percent and total 4 percent compensation increase.

The 2003/04 compensation base is comprised of salaries, retirement, and social security (OASDI and Medicare) budgeted by campuses in 2003/04. The 2003/04 compensation base is adjusted for changes in employer-paid retirement rates ($155.1 million) that the State funds post-final budget.

Further, the requested 4 percent increase in compensation funding will allow the CSU to offset the growing faculty salary lag identified by the California Postsecondary Education Commission (CPEC). CPEC annually issues a report on faculty salaries at California public universities to the Department of Finance and Office of the Legislative Analyst. In fiscal year 2003/04, the CPEC projected faculty salary lag is 11.6 percent. The table below provides information on CSU’s faculty salary lag history from 1996/97 through 2003/04.

Also, the CSU must examine employee compensation increases within a macro context that includes public and private sector employers that compete in the labor market. The U.S. Department of Labor’s changes in the employment cost index below provides an additional source of comparison to indicate whether the CSU is offering competitive wages.

In addition, the U.S. Department of Labor statistics indicate 2003/04 quarterly increases in public and private sector salaries and wages equivalent to that in 2002/03, whereas CSU did not receive any funding for salary increases in 2003/04.

Long-Term Need, $25,800,000

CSU continues to address its long-term budget need comprised of expenses that are too costly, or have had historical unfunded deficits that are too large, to finance in a single budget year. The cost of deferred maintenance, instructional equipment replacement, maintaining relevant library collections and keeping technology current are examples of these types of core needs that require a multi-million dollar annual commitment. In past years, these multi-year commitments were funded as a separate component of the higher education Partnership Agreement and one percent of the CSU’s budget was earmarked for this purpose.

The total budget investment necessary to address long-term budget need (as illustrated on the preceding chart) reflects the continuing impact of permanent reductions in State General Fund appropriations to the CSU, such as the permanent base budget reductions that occurred in the early 1990s, the budget reductions required in 2001/02 and the $38 million one-time reduction taken in 2002/03. The amount of the investment required to address the need in the budget year is determined by the annualized cost of historical budget deficits such as deferred maintenance and the yearly cost of ongoing needs, such as replacement of fully depreciated instructional equipment.

CSU has made headway in reducing the combined long-term need requirement for four program areas: instructional equipment, libraries, deferred maintenance and technology. From a high of $144.8 million in 1998/99, CSU has used Partnership Agreement resources to reduce the combined annual requirement in these four areas to $110.2 million in 2001/02. This reduction primarily reflects permanent budget increases for libraries, deferred maintenance, and technology. The annual depreciation of instructional equipment will receive greater emphasis in the years ahead.

Technology Network Equipment and Operations ($10 Million)

The build out of the telecommunications infrastructure to serve students and bring the institution greater efficiency requires $69.7 million for related equipment and media elements that are vital components for network operations. The media component provides the cabling in the inter-building duct banks being constructed through the Capital Outlay program. The equipment, or network electronics, facilitates an integrated computing environment with required client/ server applications. CSU began the establishment of a $20 million base, which was later increased to $22 million to finance the equipment costs for this build out over four years. The first installment of $10 million was funded in the 2001/02 CSU Support Budget and augmented by $2 million of redirected ongoing technology funds for a total base of $12 million. An additional $5 million was included in the 2002/03 budget, but subsequently deleted as part of a one-time reduction. Due to the budget shortfall in 2003/04, this $5 million, plus a planned additional allocation of $5 million for a total of $10 million, were not added to the base. The total augmentation of $10 million in 2004/05 would complete the $22 million need. After the equipment and media purchases are complete, these funds will be redirected in subsequent years for the amortized costs of equipment and infrastructure refresh and replacement on a planned three-year basis as identified in the university’s technology plan to remain current with network technology advances. Without an allocation of $10 million in 2004/05, the CSU may be required to revise the refresh and replacement cycle to four or five years until the full funding requirement is met. The CSU technology plan was formally presented during the State Budget process in 1999/2000 and has received State funding for capital and operating implementation in each of the past four fiscal years. This investment recognizes that technology is essential to today’s academic programs.

Libraries ($9 Million)

Structural budget deficiencies in CSU libraries occurred as State funding was reduced during the economic downturn of the early 1990s and as CSU budget funding was no longer determined by formulabased cost standards. CSU calculates that a structural deficiency of 132,000 volumes annually for library books, serials and periodicals currently exists. The cumulative cost of this deficiency (since 1990/91) is estimated at $86 million and grows larger each year that additional base funding is not provided. The CSU estimates that a permanent base of $12 million must be established in order to halt and close the $86 million deficit.

The deficit means the full range of new books deemed basic to the curriculum are not added to library collections, creating holes in those collections. Students do not have ready access to current books on a particular subject, and they often find that the available books are too old to be useful. With restored funding, more current books can be purchased and eventually the significantly higher cost of acquiring outof- print books to fill the holes can be avoided.

In fiscal year 2000/01, the CSU used $3 million of its long-term commitment provided by the Partnership Agreement for systemwide electronic resources, reducing the unfunded annual need to $9 million. No additional funds to address this need were available in 2001/02, 2002/03, or 2003/04.

In 2004/05 the CSU is requesting $9 million for libraries needed to permanently establish a $12 million base budget.

For 2004/05, of the $9 million requested, $8 million will be allocated to campuses ($7 million for expansion and update of the collections of books, periodicals and serial subscriptions, as well as acquire other non-print resources such as sound recordings required to support academic programs and $1 million for programmatic factors and special acquisition needs as determined on a campus-by-campus basis) and $1 million to systemwide programs for electronic information resources. This central funding will provide further expansion of the Electronic Core Collection of bibliographic and full-text resources, for continued growth and enhancement of systemwide information access through the Pharos system of World Wide Web-based unified information access, and for other projects designed to increase effective use of information resources. With this overall $9 million funding increase, the annual need remaining for libraries will be eliminated.

Deferred Maintenance ($6.8 Million)

CSU deferred maintenance remains an area of significant budgetary deficiency. Deferred repairs were scheduled for work at one point, but due to project cost, timing, and/or lack of available resources these scheduled repairs were deferred to subsequent years. Historically, the CSU has also used the term to describe or include the delayed replacement of building systems that have exceeded their useful life as part of the funding deficiency.

In 1999, the CSU commissioned a study to better define the annual funding needed to replace building components and systems that have exceeded their life cycle. In addition, the purpose was to confirm if the long term funding sought by the CSU would halt the growth of the $351 million estimated deferred maintenance backlog consistent with the intent of the Partnership Agreement.

The results of the study indicate that due to the substantial amount of construction of facilities from the late 1950s to the mid 1960s, on average $100 million per year is needed to replace mechanical, electrical and plumbing systems that have now exceeded their useful life. The annual need varies around this average as the study model takes into account building age, life cycle of systems, and campus repairs or replacements performed in the building.

To address this funding deficiency, the CSU has received initial approval by the Department of Finance Capital Outlay unit to include the renewal of capital as a component in the CSU Capital Outlay Program. The capital renewal program, in the range of $25 million to $50 million annually, is under development for the 2005/06 budget year. A structured approach to capital renewal funding, combined with the limited availability of support funding for funding the repair/replacement of critical building components will reduce deferred maintenance and improve the renewal of our capital assets.

Between 1994/95 and 1999/00 fiscal years, the State and CSU provided permanent base budget resources for ongoing maintenance support to address funding deficiencies. However, during the six-year period, the State supported only $61 million in one-time funds to address the deferred maintenance backlog. In 2000/01, the CSU used long-term funding provided by the Partnership Agreement to reduce the backlog by $2.8 million on an annual basis. Unfortunately, no funds were available to further reduce the backlog in 2001/02, 2002/03, or 2003/04. Consequently, not only was further reduction of the backlog halted, but inflation and the continual aging of buildings has caused the long-term maintenance repair and replacement needs to significantly increase.

The CSU is committed to increase and sustain its maintenance budgets in order to provide safe, functional and efficiently operating buildings to serve our students, faculty and staff. Currently, the CSU funds ongoing maintenance at the new rate of $7.20 per square foot. However, additonal scheduled maintenance remains unfunded. Further, the funding needed to replace equipment and building systems that have exhausted their useful life has also been largely unfunded in recent years.

Increase of Tenured/Tenure-Track Faculty —ACR 73, $35.6 million

In the California State University and across the country, there is serious concern about the increasing numbers of temporary faculty, as opposed to permanent (tenured and tenure-track) faculty, in institutions of higher education. There is growing alarm that recent hiring trends in higher education, necessitated by budget deficiencies, have upset the appropriate balance between tenured/tenure-track faculty and lecturer faculty. The trend is important because tenured and tenure-track faculty bear the primary responsibility for student advising, program development and revision, and participation in shared governance. When their proportions decline, the quality of these efforts also wanes.

In response to legislation passed in May 2001, ACR 73 (Strom-Martin), the CSU Academic Senate, the California Faculty Association, and the CSU Office of the Chancellor, developed a plan to increase the percentage of tenured and tenure-track faculty over eight years. The final report and implementation plan contains the following features:

1. Sets a goal to achieve 75 percent tenured and tenure-track faculty to 25 percent lecturer faculty, measured in terms of Full-Time Equivalent Faculty (FTEF) systemwide.
2. Declares that the goal is the joint responsibility of the CSU administration, faculty, and the State.
3. Annual funding requirements for this plan range from $4.8 million to $35.6 million over the eight-year period.
4. To achieve this goal, the CSU must conduct between 1,800 and 2,000 annual searches for new tenure-track faculty.
5. The State needs to provide expanded funding for recruitment and hiring, so CSU can compete in the national faculty marketplace and,
6. Provide compensation funding for new positions at least equivalent to the average of current CSU employment offers.

In response to this trend and concerns raised by the Legislature in ACR 73 (Strom-Martin), the 2004/05 CSU budget plan includes a request for $35.6 million to implement the first phase of an eight-year comprehensive effort to increase the percentage of tenured and tenuretrack faculty, the plan includes.

Currently, the proportion of permanent faculty has declined to approximately 63 percent of the total full-time equivalent faculty (FTEF) positions. (FTEF is the unit of measure most typically used to express this ratio; it is the standard used by the California Community Colleges in achieving their target ratio.) To achieve a proportion of 75 percent over eight years without jeopardizing the employment status of current lecturers, CSU will need to add new tenure-track faculty beyond those required by projected enrollment growth. Thus the proposed plan requires additional State funding on an annual basis—starting with an initial phase-one implementation cost of $35.6 million, and annual increases there after ranging from $4.8 million to $12.4 million. Most of this funding would cover the compensation costs of new, permanent faculty positions and the recruitment and hiring costs associated with these new positions. While CSU would like to move faster, the number of individual search processes that can be reasonably managed in an academic year is limited. In the past year, CSU conducted slightly more than 1,150 faculty searches. The ACR 73 plan would require CSU to conduct between 1,800 and 2,000 annual searches—a significant challenge given the already heavy workload of CSU faculty and academic administrators.

CSU Outreach, $12,500,000

Early Assessment Program (EAP) for 11th Grade Students and Academic Preparation Program (APP) for 12th Grade Students

The California State University’s Early Assessment Program (EAP) is the result of an extraordinary collaborative effort between the California State University (CSU), the California Department of Education (CDE), and the State Board of Education (SBE). In partnership, CSU has developed an early assessment program that incorporates the CSU’s placement standards into existing high school standards tests in augmented English and mathematics California Standards Tests (CST).

This project was designed to bridge the gap between high school standards and college expectations in order to decrease the number of incoming college students who require remediation in English and/or mathematics. Even though remediation is a common occurrence in all States, CSU now believes that it has a strategy that will substantially increase the college readiness, and eventual college success, of California’s high school students, and early assessment is the key.

The Early Assessment Program (EAP) will not only strengthen the comprehensive, school-based, college preparation programs, but it will also allow each public high school and CSU to determine the college preparation status of individual students at a point in high school that will permit sufficient time (during the senior year) to attain the additional skills needed to enter CSU college-ready. For those students assessed as ready for college on the basis of the early assessment, CSU will certify these students as proficient in English and/or mathematics, and upon matriculation these students will enroll in baccalaureate courses without the need to take any additional placement tests. In other words, early assessment will address remediation and, at the same time, cultivate understanding of the study/learning skills necessary for college success. The EAP will foster a more challenging high school senior year, while establishing a much-needed articulation mechanism between education systems.

The Early Assessment Program will be available to all high school juniors in spring 2004 who are taking the appropriate 11th grade English and mathematics courses required for admission to the CSU. In a letter that will be sent to superintendents of county offices of education, superintendents of unified and high school districts, high school principals, and district school boards, State Superintendent of Public Instruction for the California Department of Education, Reed Hastings, President of the State Board of Education, and Chancellor Reed will urge all high schools to participate in the groundbreaking 11th grade assessment programs and to encourage 11th graders to volunteer to take these augmented CSTs in all California high schools.

CSU is working with public school leaders to identify approaches for helping high school seniors who need additional preparation to meet CSU placement standards. A set of senior year programs will be based in all California public high schools and will address directly the college preparation needs of those seniors assessed as eligible for admission to CSU but not ready for college-level study.

2004/05 Budget Request Summary

Early Assessment—11th Grade Early Assessment of Readiness for College English and Mathematics: A Joint Program of California State University and California Public Education

Over 60 percent of the nearly 40,000 first-time freshmen admitted to the CSU require remedial education in English, mathematics or both. These 25,000 freshmen have taken the required college preparatory curriculum and earned at least a B grade point average in high school. The cost in time and money to these students and to the State is substantial. Moreover, these students are confused by seemingly having done the right things in high school only to find out, after admission to CSU, that they need further preparation. Particularly important to California is that a disproportionate share of these students needing remediation are from populations who have been underrepresented in higher education.

This joint public school-CSU program will provide all college preparatory high school juniors with an opportunity to get an early signal about their preparation for college mathematics and English. For those who are not quite proficient in English and mathematics, there is the senior year to improve their skills and knowledge. For others who have taken and completed the college preparatory curriculum with a B average and who are assessed as proficient, there will be no need to take additional admission or placement tests for CSU.

Recognizing the need to coordinate and streamline school testing, CSU has been working with the public schools, the State Board of Education (SBE) and the California Department of Education (CDE) to connect its college entry readiness standards in English and mathematics to existing school tests. Beginning in 2001, under the guidance of Senate Bill 233, CSU faculty have succeeded in piecing together the test items required to assess CSU readiness from existing school tests—namely, the 11th grade California Standards Tests (CSTs) and the corresponding Golden State Examinations (GSEs) in English and mathematics.

In spring 2003, the linked CST and GSE tests were piloted for use by California public schools for their programs honoring high student achievement and by the CSU, as the 11th Grade Early Assessment of Readiness for College English and Mathematics (Early Assessment).

Unfortunately, the GSEs were not funded in the 2003/2004 State budget. Nonetheless, CSU and California public education maintained their commitment to the joint program, by agreeing to find a way to continue with the Early Assessment in spring 2004. Because Early Assessment is important to CSU, CSU reallocated $3.2 million of systemwide funds on a one-time basis to support using CDE’s CSTs in 11th grade English language arts, algebra 2, and high school mathematics as the foundation for the spring 2004 program, supplemented with short, but necessary, CSU augmentations of additional test items to each CST, to continue Early Assessment in spring 2004. The funds cover the marginal cost of expanding the STAR operations, administration, and reporting for the 11th grade to include the Early Assessment and the necessary services required to ensure that these new tests maintain the standards of academic and psychometric quality that the State expects of assessments for Californians.

To continue Early Assessment in spring 2005 and beyond, CSU seeks a base-budget increase of $3.2 million.

Campus Early Assessment and Academic Preparation Program Coordination

In 2003/04, CSU allocated to each campus $100,000 to fund a campus Early Assessment and Academic Preparation Program coordinator and administrative costs associated with the 11th grade early assessment and the 12th grade academic preparation programs. The administrative responsibility of the program coordinator will be that of a coordinator or “enabler” both for the early assessment of 11th grade students and the 12th grade senior year experiences. The coordinator will have the responsibility at the campus level to communicate, publicize, and work with the campus’s local high schools to inform them about the augmented CST, to encourage the high schools to inform students about these programs, and to encourage students who are on track to apply to CSU to take the augmented CST in English and mathematics at the end of their junior year in high school. CSU is not providing direct services to high schools, students, or teachers, but it will help high schools to identify courses, on-line English and math tutorials, other prepared courses, and other activities that are designed to help the high schools to help students to strengthen their skills. Coordinators may also be asked to review high school-developed activities to ensure that the standards in these activities are aligned with CSU placement standards.

An additional $100,000 per campus, a total of $2.3 million, is requested to provide sufficient administrative support to campuses to ensure adequate coordination of CSU’s 12th grade experience program with California’s 944 comprehensive public high schools. CSU expects about 100,000 high school juniors to take the augmented CST in spring 2004. While these students will be on track to meet CSU admission standards, the majority of students will not be able to demonstrate proficiency in English and mathematics. CSU’s joint public school-CSU assessment will indicate to all CSU-eligible high school students on course to be CSU eligible during their junior year whether they are ready in mathematics and English to begin CSU or whether they need further academic preparation in English and mathematics during their senior year in high school before enrolling in CSU.

12th Grade Experience: Licensing Agreements

Once students have been assessed in their junior year of high school, a set of senior year programs and courses will be based in all California public high schools that will address directly the college preparation needs of those seniors assessed as eligible for admission to CSU but not ready for college-level study. CSU is reviewing mathematics Webbased and other mediated instructional tools such as ALEKS, Academic Systems, and “I Can Learn.” CSU math faculty will determine the extent to which these types of materials are aligned with the State Board of Education mathematics standards, and if they are, the extent to which students might strengthen their skills. CSU will execute master licensing agreements to enable high schools and CSU campuses to use these Web-based instructional programs during their senior year of high school. It is estimated that the cost of the licensing agreements will total approximately $50,000.

CSU Student Tutors

For many years, CSU trained and supported CSU students to tutor and mentor middle and high school students in English and mathematics. The final budget passed by the Legislature and signed by the Governor on August 1, 2003 included a $12.596 million reduction in CSU’s outreach programs. To achieve this reduction, CSU ceased providing this direct service to high schools. However, CSU campuses and high schools that used CSU students as tutors in high schools through the 2002/03 academic year have indicated how valuable this program was in helping high school students to strengthen their basic skills in English and mathematics.

Therefore, CSU requests $5.3 million to fund CSU student tutors to help middle and high school students who need assistance in strengthening precollegiate English and mathematics skills. This level of funding, an amount equal to the level of support CSU provided in support of this program through 2002/03, will train approximately 3,000 CSU students to become tutors. In addition to its emphasis on raising skill levels in English and mathematics, CSU student tutors will encourage middle and high school students to take more rigorous courses, assist them to succeed in those courses, and raise their educational aspirations.

High School Faculty Training to Teach High School English Course

A task force under the aegis of the CSU English Council is developing a curriculum and teacher-training materials for an expository reading and writing course to be offered to high school students in their senior year. This course will address reading and writing problems identified by the English Placement Test Development Committee and the augmentation to the CST. The task force includes high school English teachers, CSU English faculty, an ESL specialist, a reading expert, and a high school principal. Several high schools aware of this effort are enthusiastic about introducing this English course into the high school curriculum in spring 2005.

High school administrators and representatives of the California Department of Education have indicated that CSU will need to train high school English teachers how to teach the expository reading and writing course. Therefore $75,000, totaling $1,650,000, will be allocated to twenty-two CSU campuses (CMA will not receive funding) to work with their schools of education and local high schools under the aegis of the CSU English Council to train high school English teachers to teach the expository reading and writing course developed by the CSU English Council.

Off-Campus Centers, $3,000,000

For 2004/05, the funds needed will provide campuses approaching 500 full-time equivalent students (FTES) or more with the necessary fixed costs required for the operation of the off-campus centers. The fixed cost standard supports the following cost differential for offcampus centers:

This funding provided by this cost standard addresses the educational support/fixed cost needs associated with the increased enrollmentrelated operational and administrative cost of instructional support, academic support, student services, and institutional support services. It does not include the faculty salary, benefits or instructional equipment components of the marginal cost calculation.

The facility operations standard in the methodology is based on the campus acquisition and support of space requirements that serve up to 500 FTES. The off-campus center funding methodology for enrollments over 500 FTES provides support for the square footage differential required at the center to reach a maximum threshold of 1,250 FTES enrollment. This square footage differential (51,600 square feet) is multiplied by the current rate of operations for new space ($7.20/square foot) and the on-going cost of regularly scheduled maintenance ($0.93/ square foot). Total funding provided at this rate, $8.13 times the 51,600 square feet differential, yield a fixed cost requirement of $419,500. Funds provided for facility operations include all additional costs associated with new lease or permanent space requirements for instruction and instructional support, academic support, student services, and institutional support.

Antelope Valley

Antelope Valley enrollment has surpassed initial expectations. Enrollment projections for this fast growing off-campus center show student population targets increasing from 607 college-year FTES in 2003/04 to 1,159 college-year FTES in 2012/13.

Currently the off-campus center has modular buildings on the Antelope Valley Community College campus. There is room for one additional modular, after that the off-campus center will need to lease commercial space elsewhere until a permanent site or alternative solution is found.

Additional funds will allow this campus to accommodate increasing enrollment by adding another modular building, leasing more space off site and maintaining the Center’s distance-education instructional television studios. Distance learning and Internet methods of instruction will continue to play an important role for this center.

Funding is required in order to provide the necessary support for the increased enrollment in the areas of academic, student, and institutional support infrastructure to manage operations.

Coachella Valley

Faced with a large and growing underserved population in the Coachella Valley, CSU San Bernardino embarked on a successful fundraising campaign to finance permanent facility construction in the City of Palm Desert. The State and the region’s business and civic leaders have supported this expansion as an important addition to the economic, social and educational quality of life.

Enrollment at the off-campus center is expected to surpass the 500 FTES threshold for additional fixed cost support in 2003/04. Actual enrollment at the end of the 2001/02 college-year was 413 FTES. The campus has developed plans for additional expansion to accommodate the projected surge in enrollments as new building comes on line for enrollment growth in this underserved area. Enrollment projections for 2012/13 include a student population target of 790 FTES.

El Toro

Fixed costs are required for the expansion of the CSU Fullerton off-campus center to the former Marine Corps Air Station at El Toro. This expanded off-campus center is projected to serve 1,250 FTES in 2004/05. The current off-campus center at Mission Viejo cannot accommodate additional growth and the main campus is near its capacity limit and Master Plan ceiling.

It is estimated that CSU Fullerton exceeded its 22,000 FTES enrollment target in 2001/02 by nearly 1,000 FTES. Enrollment at the campus has grown at an annual average rate of 6.5 percent since 1995/96. CSU Fullerton is projected to have enrollment of 27,700 FTES by 2010. Orange County is projected to account for 5,300 FTES of this expected enrollment growth. Additionally, projections of Orange County high school graduates show a growth rate of 35.8 percent between 1999 and 2008. Community college enrollment in the county is expected to expand by 32.8 percent between 1999 and 2010.

Funds provided for the fixed cost needs at the El Toro site with help alleviate the enrollment pressure on Fullerton’s main campus and will better serve the educational needs of the Orange County population of students driving the increasing growth.

Budget Restoration

This budget plan contains the restoration of the net funds that were reduced during the 2003/04 budget year. This plan outlines the restoration of the following:

The 2003/04 net fiscal impact of $304.0 million, less $122.9 million that is being requested as other specific restorations for a total of $181.1 million in 2004/05.

For fiscal year 2003/04, the CSU was funded for a 4.3 percent increase in enrollment or 13,782 full-time equivalent students (FTES). Under the Partnership Agreement this funding amounted to a General Fund augmentation of $90.9 million or $6,594 per FTES. At the same time the university was assessed a net General Fund reduction of $394.4 million, consisting of a $326.1 million reduction from the Governor’s January Budget and a subsequent reduction by the Legislature in the final budget of an additional $69.5 million. These General Fund cuts included significant reductions to specific program areas, such as student services (-$53.2 million), academic and institutional support (-$58.1 million), student outreach (-$12.6 million), and an increase to the student-faculty ratio (-$53.5 million). To mitigate some of these reductions, student fees were raised by 30 percent in July 2003. This additional fee revenue amounted to $167.0 million, net the set aside of one-third of all new fee revenue for financial aid purposes.

The compounding of these factors and existing budget deficiencies has affected the university’s ability to provide the high quality, affordable education to the citizens of California. Looking at CSU’s budget in terms of funding per FTES, as in the following chart, over the past three fiscal years, CSU has received less funding per FTES, while enrollments continue to soar and operating costs increase. Also, the funding components for enrollment growth are shifting dramatically, with a higher dependence on student fees as the General Fund contribution is reduced.

To help mitigate these reductions in General Fund dollars, the CSU has been forced to raise fees. Student fee increases cannot match General Fund reductions dollar-for-dollar. Given the unique nature of our mission and the composition of the university’s student body, students cannot be asked in good conscience to pay more and receive less. Thus, it is essential CSU receives additional General Fund dollars to fund enrollment at a level that is commensurate with the demand placed upon the university.

When looking beyond the pure economics of General Fund reductions and increased student fees, the quality of education is at issue. As resources are removed from the budget, greater demands for service and access are added, and operating costs such as health benefits, workers’ compensation and energy costs increase, the quality of the education provided by the university begins to suffer. As funds are reduced and costs go up, services must be reduced, lecturers and professors are asked to teach more, equipment is used beyond its usual lifespan, class sizes increase, course sections are eliminated, time to degree increases, and there is diminished access to educational opportunity. Restoring 2003/04 budget cuts in areas of critical importance to quality will enable the university to continue its role as a leader in student-focused higher education and as the leading source of California’s skilled and professionally trained workforce.