2007/08 Support Budget

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 budget cycle.

Instructional Equipment $43,000,000
Libraries $11,000,000
Deferred Maintenance (10-year annualized cost = $40.4M) $405,000,000
Reducing the Salary Gap $320,000,000
Off-Campus Centers $5,000,000
ACR 73 (1st year projected implementation cost = $40M) $153,000,000
Total Unmet Need $937,000,000

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 Centers

Teacher pointing at Chinese characters on a blackboardOff-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 staff support.

ACR 73

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

Fiscal Year Base Compensation
Increase (estimated)
Increase to Address
Salary Lags (estimated)
Total CSU
Compensation Increase
2007/08 3.0% $82,788,000 2.21% $60,945,000 5.21% $143,733,000
2008/09 3.0% $88,917,000 2.34% $69,213,000 5.34% $158,130,000
2009/10 3.0% $95,583,000 2.75% $87,679,000 5.75% $183,262,000
2010/11 3.0% $103,137,000 3.20% $101,820,000 6.20% $204,957,000
  Total $370,425,000   $319,657,000   $ 690,082,000

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.

Content Contact:
Budget Development
Chris Canfield
(562) 951-4560
Technical Contact:

Last Updated: February 05, 2007