2006/07 Support Budget

Budget Development Message

Californiaís economic growth is dependent on the ability of higher education to produce an educated and technologically prepared workforce to compete in the global market. Investing in higher education guarantees every Californian an opportunity for a bright future and a pathway to success in their lifelong endeavors.After years of significant budget reductions to the California State University (CSU), the state found a way to increase funding to the university through the Compact for Higher Education designed as the first step to re-invest in the quality of education the university provides its students. The results are reflected in the overwhelming number of CSU graduates entering the fields of engineering, computer science, business, agriculture, nursing, and education.

Recovery efforts from more than $500 million in budget reductions to the CSU and dramatic increases in student fees have not been easy. However, during these difficult fiscal times, the CSU made the quality of instruction delivered in the classroom its top priority. In addition, the university maintained its support for programs that enhance the success of students in their path to graduation, protected campus outreach funding, and increased funding for financial aid to a greater number of students with need. Budget reductions did force adjustments in course curriculum; however, campuses made every effort to ensure students were getting the course offerings they needed. The CSU also avoided layoffs through attrition and budget savings by not filling vacated positions.

Itís clear the university managed its budget reductions in the best interest of its students and employees. Itís just as clear the CSU would have been unable to continue those budget efficiencies without a significant impact on student access, the quality of instruction students expect, and the employees who collectively contribute to the education of CSU students. Funding provided in the 2006/07 budget represents the second year of the Compact. Resources identified for 2006/07 are a continuing investment to meet mandatory costs, enhance student access, provide financial aid and base compensation funding, and restore core funding for technology, libraries, and deferred maintenance.

The second year of funding under the Compact will restore student access to its highest level, with the CSU serving more than 435,000 students in the 2006/07 academic year. Student fees are consistent with the CSU Board of Trustees fee policy that calls for increases that are moderate, predictable, and affordable. The financial aid set-aside will fund the fee increases for current students with need and provide an additional 5,000 State University Grants to newly eligible students. The CSU is significantly behind its national comparison institutions in the salaries paid to employees. The compensation funding provided in the budget begins to address this salary lag that ranges from 3 percent to 49 percent among employee groups. Funding is also included for university technology, libraries, and deferred maintenance.

The 2006/07 budget anticipates revenue increases from the state General Fund ($128.4 million) and student fee revenue ($107.0 million) for a total budget augmentation of $235.4 million. Support from this budget augmentation will increase total CSU state General Fund appropriations to $2.7 billion and fee revenue to $1.3 billion. Reimbursements of $202 million bring total Support Budget appropriation to $4.2 billion.

The $235.4 million budget augmentation would support the following increases to the CSU budget:

  • $33.6 million to fund mandatory costs for health benefits, new space, energy, and the full year cost of the 2005/06 service-based salary increase.
  • $65.1 million to fund an enrollment increase of 2.5 percentó8,306 Full-time Equivalent Students (FTES)óto provide access to more than 10,000 new students.
  • $32.7 million for financial aid to support 115,532 State University Grants, representing an increase of 5,086 new grant awards.
  • $94 million to fund a 3 percent ($77.4 million) base salary increase and 0.64 percent ($16.6 million) to fund the first-year cost of employee salary lags.
  • $10 million to fund the CSUís long-term need for technology ($5 million), libraries ($2.5 million), and deferred maintenance ($2.5 million).

The 2006/07 Support Budget Documentation provides details for each of these budget requests. This document also outlines nearly $200 million in additional CSU budget challenges, representing ongoing and first-year costs that cannot be funded from the Compact revenue increase calculated for the 2006/07 academic year.With the continued support of the CSU Board of Trustees, CSU constituency groups, the governor, and the legislature, the university will uphold its dedication to maintain prominence as the nationís strongest public system for baccalaureate and masterís degree education.

Patrick J. Lenz,
Assistant Vice Chancellor
of Budget Development
Rodney M. Rideau,
Director of the Budget


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Budget Development
Chris Canfield
(562) 951-4560
Technical Contact:
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Last Updated: November 08, 2005