Budget Challenges: CSU Unmet Needs
In addition to the Compact funding needs and budget challenges outlined in this budget request, the
CSU continues to recognize that there are priorities for the system that do not receive specific
funding under the Compact. These items continue to be budget issues for the CSU in the 2007/08
(10-year annualized cost = $40.4M)
|Reducing the Salary Gap
(1st year projected implementation cost = $40M)
|Total Unmet Need
Instructional Equipment, Libraries, and Deferred Maintenance
The cost of keeping technology current, maintaining relevant library collections, reducing deferred
maintenance, and funding instructional equipment replacement are examples of core needs that
require a multimillion-dollar annual commitment—needs that are much larger than can be funded by
the state of California in one year. The table above reflects the funding required to fully fund these
areas of need in 2007/08.
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
In May 2001, the 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 tenured and tenure-track faculty over eight years. 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, the state assembly, the
governor, the director of the Department of Finance, and others in July 2002.
The plan identified the funding requirements to recruit 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 19.4:1 at the time the plan was developed down to a ratio of 18:1.
Given the difficulty of attracting new faculty to CSU campuses in many parts of the state, the eightyear
plan was believed to be challenging, but achievable. It identified the need to conduct from
1,800 to 2,000 faculty searches per year over the eight-year period. With adequate funding, 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.
To achieve the goals of the plan, a current estimated $40 million would be required in year one and
additional increases in each subsequent year over the eight-year implementation. Total eight-year
implementation costs are currently estimated to be $ 153,000,000. Annual adjustments in compensation
will affect this cost over time.
Reducing the Salary Gap
The inability of the university to offer compensation increases that keep pace with the annual rise in
inflation or increases within the state and national marketplace erodes the CSU’s ability to attract and
retain a highly motivated and qualified workforce. There are critical salary-related concerns within a
number of CSU classifications that require special attention in the bargaining process. Each year
CSU faculty salary lags are estimated based on the salaries at the California Postsecondary
Education Commission’s (CPEC) 20 higher-education comparison institutions. In fiscal year 2006/07,
the CPEC-projected faculty salary lag is 18 percent. After adjustment for the proposed 2006/07 faculty
compensation increase, the unfunded faculty salary lag will be 14 percent.
The 2006 CSU staff market study conducted by CSU Human Resources indicates significant lags in
employee classifications such as public safety, physicians, health care support (e.g., nurses,
pharmacists), and various technical and administrative support groups. Employee salary lags have
increased due to inadequate state funding appropriated to the CSU between 2001/02 and 2004/05.
In fall 2005, the CSU Board of Trustees reviewed the current salary lags and recommended
addressing the problem over a five-year period. It was further recommended that the approach taken
to address the lags consider funding provided in the Compact and any additional revenue necessary
to address the identified lags. To address faculty, staff, and management salary lags, the board
instructed staff to develop a five-year strategic budget plan beginning in 2006/07 that reduces
currently identified salary lags as much as possible. The CSU provided $16.6 million in 2006/07 to fund
the first-year cost of this five-year plan.
Salary Lag Funding, 2007/08–2010/11 Plan Projections
|Increase to Address
Salary Lags (estimated)
As indicated in the summary table above, the estimated cost required over the next four years to
ensure that CSU base salaries do not fall further behind those of national comparative institutions is
$370 million. It is estimated that an additional $320 million will be required during this period to
address the salary lag identified in the five-year strategic plan. This level of funding is required to
attract the most qualified workforce while competing nationally to fill all positions within the CSU.