| Sources of Revenue
The 2007/08 California State University Trustees’ Support Budget is based on revenue
assumptions derived from the Higher Education Compact, a six-year agreement signed in
May 2004 with the governor, the University of California, and the CSU. Beginning in
fiscal year 2005/06 and through 2010/11, the governor agreed to request sufficient funds
to support scheduled base budget increases for general operations, enrollment, and
mandatory cost obligations for debt service and annuitant benefits.
The Compact is highly beneficial to the CSU in that it provides a stable financial
base to plan for future needs and goals. In exchange for this pledge of funding, the
CSU will be accountable for addressing state goals for student access, academic program
quality, student support services, and effective managerial resources. The CSU will
provide student and institutional outcome data that addresses operational efficiency,
utilization of systemwide resources, and student progress.
The revenue components of the compact agreement include the following for 2006/07:
- 4% Increase For General Operations ($109,736,000)
In 2007/08, the CSU budget will be based on a 4 percent increase for general
operations in accordance with the Compact agreement. Each year, the increase
for general operating support is calculated using the prior year General Fund
appropriation adjusted for retirement costs and scheduled lease revenue and
deferred maintenance bond payments.
For 2007/08, the 4 percent increase is calculated as follows:
| 2006/07 Final General
Fund Budget |
2,788,910,000 |
| Lease Revenue
Bond Payment |
|
(64,597,000) |
| Deferred Maintenance
Bond Payment |
|
(4,187,000) |
| 2006/07 Retirement Increase |
|
23,284,000 |
| Total, CSU 2007/08
General Fund Base Budget |
2,743,410,000 |
2007/08 General Fund
Increase for General Operations
(Base Budget x 4%) |
109,736,000 |
- 2.5% Enrollment ($64,244,000) and MSN Enrollment Increases ($2,467,000)
The Compact includes a 2.5 percent annual enrollment increase. For 2007/08,
a 2.5 percent increase in CSU resident student enrollment yields an additional
8,351 Full-time Equivalent Students (FTES). Also, the 2007/08 support budget
request continues planned Master of Science in Nursing (MSN) program enrollment
growth of 163 FTES. This represents the second cohort of students in a
multi-year agreement with the state to increase the number of licensed nurses
serving California. In total, the CSU will be funded to serve 342,712 resident
FTES in 2007/08.
Based on the 2006 Budget Act marginal cost methodology, the gross marginal
cost rate for 2007/08 is $9,927. The state share of this rate is $7,693 per FTES,
which reflects a $2,234 offset for student fee revenue. The $7,693 state rate
multiplied by the 8,351 FTES enrollment growth equals $64,244,000. One-third of
the marginal cost fee revenue is set aside for financial aid ($745 per FTES).
Regarding MSN enrollment funding, the 2007/08 marginal cost rate is adjusted
to reflect the lower student/faculty ratio (SFR) and the instructional cost of
graduate nursing instruction. Based on a graduate nursing instruction standard of
10.5 SFR and the average cost of faculty professors, the state cost to add a new
MSN graduate nursing cohort is $2,467,000. This represents a cost of roughly
$15,000 per FTES. The marginal cost adjustments required to more accurately reflect
the instructional cost of students enrolled in nursing programs represent a state
marginal cost rate for nursing that is double the cost requirement for regular
student enrollment.
The marginal cost calculation is based on the methodology approved by the
legislature used to fund CSU enrollment growth in the Budget Act for the 2006/07
fiscal year. The graduate unit load for a full-time equivalent student was
changed, as requested by the CSU, from 15 to 12 units per term. A plant operations
component was specifically included in the enrollment funding methodology
to recognize the cost of maintaining existing space and opening new space to
support existing enrollment levels and accommodate enrollment growth. The governor
vetoed this methodology in the 2006 Budget Act, but sustained the state marginal
cost rate enacted by the legislature.
The CSU will continue to participate in the review of the marginal cost
calculation methodology with the Department of Finance, the Legislative Analyst’s
Office, and the University of California to advocate the university’s needs in
covering the cost of enrollment growth.
- Revenue Augmentation ($65,168,000)
The 2007/08 budget plan includes a revenue augmentation of $65.2 million to
support CSU budget plan expenditures. With no change in CSU fee rates included
in the 2007/08 budget request, additional state funding is needed to address
critical needs associated with CSU mandatory cost obligations and market-driven
competitive salary requirements for the recruitment and retention of professionally
trained and highly skilled employees.
Following are the 2007/08 CSU State University Fee rates with no change from 2006/07:
| CSU STATE UNIVERSITY FEE (SUF) RATES
|
| STUDENT LEVEL |
|
2007/08
% change from
prior year
| 2007/08
SUF Rate |
| Undergraduate |
|
|
|
| Regular |
|
0.0% |
2,520 |
| Limited |
|
0.0% |
1,464 |
| Credential Program Participants |
|
|
|
| Regular |
|
0.0% |
2,922 |
| Limited |
|
0.0% |
1,698 |
| Graduate/Post-Baccalaureate |
|
|
|
| Regular |
|
0.0% |
3,102 |
| Limited |
|
0.0% |
1,800 |
The CSU continues to maintain the lowest undergraduate fees among the
California Postsecondary Education Commission’s (CPEC) 15 higher-education
comparison public institutions. (The 15 comparison institutions have historically
been referenced for faculty compensation and student fee comparisons.) The average
2006/07 academic year resident, undergraduate student fees at the CSU are $3,199
and, at comparison institutions, $6,665. The average 2006/07 academic year resident,
undergraduate student fees include both systemwide and required campus fees.
The total CSU 2006/07 systemwide and campus fees average is comprised of $2,520
for the undergraduate SUF (6.1 units or more) and $679 for the average campus-based fees
that must be paid to apply to, enroll in, or attend the university.
- SUF Revenue from Enrollment Growth ($25,200,000)
Revenue associated with a 2.5 percent increase in resident FTES enrollment
(8,351 FTES) is projected to generate $25.2 million in new student fee revenue.
The Compact agreement calls for the university to set aside 20 percent to 33
percent of new State University Fee revenue for financial aid. In 2007/08, the
CSU will set aside one-third of the student fee portion of the marginal cost of
instruction for financial aid. The $6.2 million provided by the set-aside
will be used to increase the CSU State University Grant (SUG) pool. The $18.98
million balance of enrollment growth revenue will support all other marginal
cost enrollment growth.
2007/08 2.5 Percent Resident Enrollment
Growth Revenue
One-third Financial Aid Set Aside |
$25,200,000
($6,221,000) |
| 2007/08 SUF Fee Revenue
from Growth Net of Financial Aid |
$18,979,000 |
|
