2005/06 Support Budget

Uses of Revenue

Uses photoThe 2005/06 California State University Trustees' Support Budget is proposed based on the compact agreement revenue and recommended expenditure plan. The Higher Education Compact expenditures address the university's minimum needs for the 2005/06 fiscal year including areas such as mandatory costs, enrollment, and compensation increases.

Higher Education Compact Expenditures ($224,845,000)

  • Mandatory costs are expenditures the university must pay regardless of its financial condition. These cost areas include health and dental benefit rate increases, new space, insurance, and energy cost increases. Not funding mandatory costs creates a de facto budget reduction wherein funding for these costs must be diverted from other program areas to meet these obligations. In order to preserve the instructional integrity of CSU academic programs, the 2005/06 budget plan supports the following mandatory cost obligations:

    Uses table 1

  • Enrollment Growth ($63,754,000)
    Enrollment for the university is planned to increase by 2.5 percent for 2005/06 or 8,103 FTES. This enrollment will require $63.8 million to meet direct instruction, academic support, student services, and institutional support needs. This enrollment will be funded using the marginal cost of instruction rate of $8,401, less 25 percent of the student fee portion of the marginal cost of instruction methodology ($533), which is set aside for financial aid programs.

  • Financial Aid ($23,298,000)
    One-fourth of the revenue from student fees generated from growth enrollment, as calculated from the marginal cost fee revenue component, and State University Fee increases will be used to increase the CSU State University Grant pool. This pool is administered centrally and is allocated to campuses based on student need. In 2005/06, the CSU estimates to award approximately 110,000 State University Grants to needy students.

    Uses table 2

  • Compensation Increases ($88,078,000)
    The CSU plans to use $88.1 million of the Higher Education Compact to fund a 3.5 percent compensation pool, subject to collective bargaining, for all employees effective July 1, 2005. Non-faculty employees have not received a salary increase in two years, with the last increase implemented in 2002/03 for 1.68 percent. The CSU must also continue its efforts to address the 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 California Department of Finance and the California Legislative Analyst’s Office. In fiscal year 2004/05, the CPEC projected faculty salary lag is 12.7 percent. The CSU Board of Trustees recognizes compensation for faculty, staff, and management as a key element of the university's success. The ability to offer a competitive compensation package is critical to the CSU's ability to recruit and retain faculty, staff, and management employees who contribute to CSU higher education excellence.

    Uses table 3

  • Long-Term Need ($7,890,000)
    The budget plan recognizes the CSU's continued efforts in reducing deficiencies in the university's long-term budget needs. Long-term budget needs are those areas in which historical deficits prohibit full funding within a single budget year. These areas of need are recognized in the Higher Education Compact agreement, but funding for these areas has not been provided for the past four fiscal years. Due to this lack of funding, deficiencies in the areas of technology, libraries, and deferred maintenance have grown by considerable levels. To help address these deficiencies, in 2005/06, $5 million will be used to complete financing of equipment costs for the telecommunications infrastructure build-out that will support an integrated computing environment with required client/server applications. Also, $1.5 million each will be directed to libraries and deferred maintenance to reduce deficiencies in these areas of need. In all, $7.9 million is being directed to assist campus efforts in these critical areas of need until funding from dedicated compact resources can be provided. Beginning in 2008/09, the compact calls for an additional 1 percent General Fund increase to help meet this funding gap.

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Last Updated: October 27, 2004