2006/07 Budgetary Challenges

The CSU received its first base funding increase in three years in FY 2005/06. That increase allowed the CSU to make a down payment on some of its most pressing needs. However, the university continues to face significant budgetary challenges as it strives to fulfill its mission under the state’s Master Plan for Higher Education. Below is a summary of some of those budgetary challenges. A more complete description of these issues is provided in the 2006/07 Support Budget Documentation publication.

• Five-Year Salary Lag Funding Plan ($16,551,000)

  There are critical salary-related concerns within a number of CSU classifications that require special attention in the bargaining process if the CSU is to successfully negotiate contracts in the years ahead. CSU faculty and staff salary lags have been identified by the California Postsecondary Education Commission (CPEC) and CSU Human Resources salary studies. Each year, identified employee salary lags are exacerbated when the CSU receives insufficient funding to provide compensation increases that keep pace with the annual rise in inflation or salary growth within the state and national marketplace.

  To address faculty, staff, and management salary lags, the CSU is developing a five-year strategic budget plan beginning in 2006/07 that includes reducing salary lags to zero. The CSU 2006/07 budget request includes the first year of salary lag funding as indicated in the compensation section. During 2007/08 through 2010/11, the CSU budget plan includes further addressing the faculty and staff salary lags.The current estimated cost to fund salary lags from 2006/07 through 2010/11 is $315.4 million.The salary lag funding over this period is in addition to the funding required for annual 3 percent compensation increases.

• Initiative To Facilitate Graduation ($8,900,000)
  

  The CSU’s most important contribution to the state and its economic vitality is its graduates. In college year (CY) 2004/05, the CSU awarded a total of 83,988 degrees: 66,768 bachelor’s degrees, 17,167 master’s degrees and 53 doctoral degrees (via joint programs with the University of California or independent California universities). These individuals left the university ready to participate in all aspects of California’s society and economy as workers, taxpayers, voters, community leaders, and agents of social progress. In all of these roles, CSU graduates are more productive and contribute more than they would without their university degrees.

  Based on long-range enrollment trends, the number of applicants interested in pursing a bachelor’s degree at the CSU will continue to rise. A portion of this increasing demand can be accommodated by embracing new strategies. One of these strategies is the three-part Initiative to Facilitate Graduation established by the CSU Board of Trustees in March 2005.

  The first element of the Initiative to Facilitate Graduation is to provide a clear signal to 11th graders as to their readiness for college work in English and mathematics. Armed with the results from the Early Assessment Program, students in the 12th grade can take the right courses to gain full proficiency upon entry to the CSU as freshmen. The second element of the Initiative to Facilitate Graduation is to provide community college students clarified and improved pathways to their CSU undergraduate major.A primary tool in this effort is the Lower Division Transfer Patterns (LDTP) project, which will help ensure that courses taken by students in the community colleges will advance their progress toward a baccalaureate degree.The third element of the Initiative to Facilitate Graduation is titled “Campus Actions to Facilitate Graduation.”The CSU Board of Trustees has set forth an action plan that identifies 22 strong practices, including strengthened advising, better support for learning specific academic content, improved tailoring of class schedules to student study needs, social and academic peer support, and orientation to the goal of graduation.

  All three elements of the Initiative to Facilitate Graduation present the university with budgetary challenges, but the increased number of students earning degrees will provide a very favorable return on the investment, both for the individuals and for the state. Implementation of the CSU’s Initiative to Facilitate Graduation will require $8.9 million.

• Nursing Initiative - BSN ($3,000,000)
  

  Each year, California’s demand for nurses exceeds the number of students who are prepared to enter the nursing workforce. By the year 2010, over 47,000 additional nurses will be needed to serve California’s population. Currently, California’s institutions of higher education graduate only 6,000 nurses annually. To meet demand, California’s higher education segments will need to graduate at least 9,000 additional nurses annually; a total of 15,000 annually. In 2003/04, only 15 percent to 20 percent of students seeking admission to CSU clinical nursing programs could be accommodated due to limited numbers of qualified faculty, facilities, and clinical placement opportunities in health care facilities. The California State University is eager to increase the number of students it prepares for careers in nursing.

  To help meet California’s demand for qualified nurses, the California State University proposes to expand capacity for students applying for admission to the CSU’s basic/generic BSN program and implement an accelerated baccalaureate program for students who already possess a bachelor of arts or bachelor of science degree in fields other than nursing.Admission under each of these two programs will prepare students for the Registered Nurse licensure exam and a bachelor of science degree in nursing (BSN).

  The combined program to increase the number of BSN graduates will require an additional $3 million and provide undergraduate nursing instruction to an additional 340 Full-time Equivalent Students (FTES) annually.

• Increasing the Percentage of Tenured and Tenure-Track Faculty ($35,800,000)
  

  In May 2001, the California legislature passed Assembly Concurrent Resolution 73 (ACR 73) which urged the CSU, the CSU Academic Senate, and the California Faculty Association to develop a plan to increase the percentage of the Full-time Equivalent Faculty (FTEF) that are tenured and tenure-track faculty. In response to that resolution, a plan to achieve the goal of at least 75 percent tenured/tenure-track faculty and 25 percent temporary faculty was developed and forwarded to the members of the state senate and the state assembly, the governor, the director of the Department of Finance, and others in July 2002.

  The eight-year plan identified the funding requirements to recruit (1,800 to 2,000 faculty searches per year over the eight-year period) and pay new tenured/tenure-track faculty to achieve the goals identified in ACR 73. In addition, an integral part of the plan to successfully recruit more tenure-track faculty to the CSU was the phased reduction in the student/faculty ratio (SFR) from 19.4 at the time the plan was developed down to a ratio of 18.0.The plan was structured to achieve an annual increase of 1.5 percent in the tenured/tenure-track faculty percentage and an annual decrease in the SFR of approximately 0.15 per year.

  The total cost of implementing the ACR 73 plan is currently estimated to be approximately $133 million, with the first year implementation cost at $35.8 million.

• Mathematics and Science Teachers Initiative ($2,645,000)
  

  The Compact for Higher Education specifically identifies the need to increase the number and quality of mathematics and science teachers in the state. The compact also acknowledges that the CSU, which currently “prepares 60 percent of the state’s elementary and secondary teachers,” is in a unique position to be able to help address this critical need in the state’s public schools. In response to the state’s need, Chancellor Reed committed the CSU to double the 748 math and science teacher credential candidates that it currently produces annually by the year 2010.

  The first element of the plan,“Growth in the Math and Science Credential Program Pathways,” will expand the CSU’s capacity in math and science teacher education by building on existing programs and offering new ones. Rather than relying on a single program model, the CSU will expand multiple pathways, each one designed to serve a targeted group of potential math and science teaching candidates. These pathways to a math or science teaching credential include the use of 1) Integrated/Blended Programs, 2) fieldbased, technology-infused programs, 3) internship programs, and 4) credential enhancement pathways to identify new populations of potential candidates who could be attracted to math and science teaching careers and create new routes for credentialed teachers to convert to mathematics or science.

  In addition to increasing the credential pathways, the Mathematics and Science Teachers Initiative will also recruit and provide academic support for future math and science teacher candidates. The CSU academic technology unit will also leverage existing work including the Math Success Website and others to assist students needing additional help to attain mathematics proficiency by the time they enter college. And finally, the CSU will conduct a public information campaign to build awareness of the need to strengthen math and science teaching and recruit more qualified teachers.

  To achieve the goals identified within the Higher Education Compact and established by Chancellor Reed, the Mathematics and Science Teachers Initiative will require additional funding in the amount of $2.645 million. The California State University will need an additional $1.365 million from the state to recruit and train between 150 and 200 added credential candidates in the CSU’s mathematics and science teacher credential programs in 2006/07.The CSU received $250,00 in the Budget Act of 2005 for purposes of program development and administration. The CSU would also use $1.28 million from enrollment growth funding received in 2006/07 to support the mathematics and science program expansion effort.

• Special Education Teachers Initiative ($1,400,000)
  

  According to the Center for the Future of Teaching and Learning (CFTL), 10 percent of California’s K-12 student population (640,000 students) need the unique services of special education teachers. Unfortunately, the demand for special education teachers far exceeds the supply, and many of the students who need these services are not being served. The CSU is uniquely positioned and uniquely qualified to respond to the state’s need for additional teachers trained to serve students with special needs. In 2003/04, California issued 2,480 special education credentials. In that year, CSU graduates accounted for 63 percent of the new special education credentials and 73 percent of the special education internships.

  The CSU system and its campuses will increase enrollments and credential production in special education by building on existing programs in order to capitalize on existing faculty resources. This is important because there is a significant shortage not only of K-12 special education teachers, but also of faculty in the field able to prepare additional teachers to meet the severe shortage.The initiative will include efforts to grow the pathways to special education for undergraduates, articulate programs with community colleges, provide credential pathways for paraprofessionals, and grow internship programs. Approximately 10 to 12 campuses with high growth potential will participate in the program.These campuses will recruit and train between 100 and 125 added students in the CSU’s special education teacher credential programs in 2006/07.

  The California State University will need a $920,000 supplement from the state to recruit and train the added students in 2006/07 and would use $480,000 from 2006/07 enrollment growth funding to support this effort.

• Off-Campus Centers ($3,000,000)
  

  Off-campus facilities provide instructional services where demand cannot be readily accommodated on the main campus and where access to higher education might otherwise be denied to the regional population.The state has supported the establishment of these CSU off-campus centers because they serve a critical “access” need and because they can be used to target specific degree programs.

  The state has recognized the important role these centers play in providing student access by appropriating enrollment funding for the students served at them, but no state funding is provided for the additional fixed costs associated with these facilities such as leasing and maintaining the instructional space, providing library and other academic support services, providing local student services including admissions and record keeping, and providing administrative and nonfaculty staff support. Funding is needed to address the fixed cost needs at three off-campus centers that have reached critical thresholds of enrollment demand. This funding would re-establish the state’s commitment to support the total cost of student access and would acknowledge the CSU’s longrange goal to have programs and services in place to address the educational needs of future generations of students in areas not traditionally served by institutions of higher education.

• Joint Audiology Program ($800,000)
  

  For more than 40 years, the California State University has prepared audiologists to enter the health care workforce with a two-year master’s degree.The CSU’s production of master’s degree graduates provides fewer than half of the state’s approximately 90 new licensees annually.

  Recruiting and relocating the remainder of each year’s new workforce from outside California has been an increasingly difficult burden borne by the state’s hospitals, physician practices, public schools, and small audiology businesses, with heightened national competition for graduates. Now, changes in accreditation standards require that by January 2007 academic programs in audiology must offer either a clinical or a research doctorate in order to meet new professional entrylevel standards.The CSU is preparing to address the need for new audiologists in the state through joint AuD (clinical doctorate) degree programs in partnership with the University of California.

  The CSU envisions introducing new four-year, yearround joint AuD programs in fall 2007 that will fulfill new accreditation standards. In CY 2006/07, start-up costs need to be addressed: technology for student accessibility to courses and academic mentorship through distance learning, acquisition of clinical equipment, securing networks of offcampus professional facilities for clinical rotations, preparing accreditation documentation and applications, upgrading advanced course content, and personnel recruitment. For CY 2006/07, the CSU proposes a budget of $800,000 for start-up costs in its base; in CY 2007/08, that $800,000 would instruct the first cohort of 60 CSU/UC AuD students.

• Adjust Marginal Cost Graduate FTES Unit Load ($26,200,000)
  

  Graduate FTES enrollment is currently counted as 15 units per term in the marginal cost calculation that funds enrollment growth.To be consistent with the University of California and national higher education institutions, graduate enrollment at the CSU should more appropriately be counted as 12 units per academic term in the marginal cost funding calculation.

• Long-Term Needs ($101,300,000)
  

  These additional areas of concern are also identified in the 2006/07 budget plan discussion:

  • The CSU backlog in deferred maintenance currently approaches $400 million. The backlog is exacerbated by annual inflationary cost increases for completing repairs and budget shortfalls that restrict the CSU’s ability to adequately fund special repairs as buildings age.
  • The CSU backlog in libraries currently exceeds $100 million.The backlog in funding principally affects the CSU’s ability to maintain and grow its core collection of materials needed for student academic research.
  • The annual cost of instructional equipment replacement is roughly $42 million. The stateapproved build-out of CSU technology infrastructure requires over $67 million for equipment to make the build-out functional.