Budget Development Message
The California State University (CSU) is entering the third year of the Higher Education Compact
designed with this governor as a first step toward recommitting the stateís resources to educational
quality. The Compact, first established over 10 years ago, is built on the recognition that Californiaís
economic growth is dependent on the ability of higher education to produce an educated and
technologically prepared workforce to compete in the global marketplace. It acknowledges that
investment in higher education guarantees every Californian an opportunity for a bright future and a
pathway to success in their lifelong endeavors. The Compact commits a basic level of state
resource support for the university that represents a foundation to which additional specific
priorities identified for the budget year and beyond can be added to strengthen the core mission of
the university and improve the quality of instructional services provided to students.
The third year of funding under the current Compact agreement follows the direction established
over the past two years to restore access and services diminished during the stateís economic
downturn at the beginning of this decade, which resulted in more than $500 million in budget
reductions at the CSU. CSU enrollments will grow during 2007/08 to just under 460,000 students,
establishing the CSU as the nationís preeminent bachelorís and masterís degree-granting institution.
The budget focuses on using base funding support provided under the Compact to meet mandatory
cost obligations and to dedicate sufficient resources to retain, recruit, and reward highly qualified
faculty and staff for whom the university competes in an increasingly competitive national market.
The budget plan for 2007/08 expands on this Compact commitment and requests additional state
funding support to continue the priority commitments established last year to increase the number
of skilled nurses in California with graduate degrees and expand the number of mathematics and
science teachers with degrees in their field of instruction for Californiaís K-12 schools. The budget
plan also seeks to gain state-funding recognition for the increasing cost of services provided to
students with physical disabilities, the statewide need for more special education teachers for
students with learning challenges, improved advising, student orientation programs and learning
center staff support to increase student services for successful progression to degree, improved
understanding of the universityís highly effective Early Assessment Program, and expansion of the
Educational Opportunity Program grant to provide financial aid opportunities and increase
participation of historically underrepresented groups in college.
The CSU is seeking one-time funding support to increase the investment in the universityís
information technology needs that were most impacted by budget reductions: workstations, servers,
and smart classrooms. The CSU is also seeking a one-time budget augmentation to help address a
substantial backlog in deferred maintenance that, as currently defined, exceeds $400 million.
The 2007/08 budget anticipates revenue increases from the state General Fund ($241.6 million)
and student enrollment growth fees ($25.2 million) for a total budget augmentation of
$266.8 million. Support from this budget augmentation will increase total CSU state General Fund
appropriations to $3.1 billion and fee revenue to $1.3 billion. Projected reimbursements of $183.3
million bring the total Support Budget appropriation to $4.5 billion.
The $266.8 million budget augmentation would support the following increases to the CSU budget:
- $42.0 million to fund mandatory costs for health benefits, new space, energy,
and the full-year cost of 2006/07 service-based salary increases.
- $76.6 million to fund an enrollment increase of 2.5 percent (8,351 FTES) to provide
access to approximately 11,000 new students.
- $2.5 million to fund a second cohort of 163 full-time students enrolled in Master
of Science in Nursing (MSN) programs.
- $6.2 million to increase financial aid to support 115,438 State University Grants.
- $129.5 million to fund a 3 percent ($82.8 million) base salary increase and a
1.7 percent increase ($46.7 million) to fund the second year cost of a five-year
strategic plan to reduce employee salary lags.
- $10.0 million to fund CSU long-term need for technology ($5 million), libraries
($2.5 million), and deferred maintenance ($2.5 million).
The 2007/08 Support Budget Documentation provides details for each of these budget requests.
This document also outlines nearly $121.7 million in additional CSU budget challenges, representing
ongoing and one-time costs that exceed the basic (floor) funding commitment provided by the Higher
Education Compact for the 2007/08 fiscal year. With the continued support of the CSU Board of
Trustees, CSU constituency groups, the governor, and the legislature, the university will maintain its
prominence as the nationís strongest public system for baccalaureate and masterís level education.
|Patrick J. Lenz,
Assistant Vice Chancellor
of the Budget
|Rodney M. Rideau,
Director of the Budget