| Budget Development Message
California’s 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.
It’s clear the university managed its budget
reductions in the best interest of its students and
employees. It’s 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 percent—8,306 Full-time Equivalent Students
(FTES)—to 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 CSU’s 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 nation’s strongest public system
for baccalaureate and master’s degree education.
Patrick J. Lenz,
Assistant Vice Chancellor
of Budget Development
|
Rodney M. Rideau,
Director of the Budget
|
|
