A constant fiscal challenge at the CSU concerns how to address long-term budget need comprised of
expenses that are too costly, or have had historical unfunded deficits that are too large to finance in a
single budget year. The cost of keeping technology current, maintaining relevant library collections,
reducing deferred maintenance, and funding instructional equipment replacement are examples of
these types of core needs that require a multimillion-dollar annual commitment.
In past years, these multiyear commitments were funded as a separate component of the higher
education partnership agreements, with 1 percent of the CSU’s budget earmarked for this purpose.
The current Compact calls for restoration of this 1 percent General Fund commitment in the fourth
year of the Compact (2008/09). However, it is important that the CSU continues minimum investments
in these structurally deficient areas to impede significant growth in funding backlogs and to sustain
the current quality of services available to students, faculty, and staff.
The total budget investment necessary to address long-term budget need reflects the continuing
impact of permanent reductions in State General Fund appropriations to the CSU, such as the
permanent base budget reductions that occurred during fiscal years 2001/02 through 2004/05.
Information Technology Acquisition and Support, $5 Million
The CSU has funded the baseline budget needed to acquire electronics required to operate the
campuses’ telecommunications infrastructures and to renew and refresh this equipment on a regular
and predictable cycle, thereby preserving the value of the state’s investment in that infrastructure.
The framework that has guided CSU investments in technology for over a decade, the Integrated
Technology Strategy (ITS), clearly articulated that the infrastructure was a prerequisite for
disseminating the benefits of the technology initiatives to CSU students, faculty, and staff. In summer
2005 a study was conducted that found that, due to years of chronic underfunding resulting from
budget shortfalls, inadequate funding has been allotted to academic technology.
The CSU is now concentrating on the first four of its academic technology initiatives designed to
address problems created by this funding deficiency:
- Focus on improving student success by providing online information, testing tools, and learning
modules to allow students to be “college-ready” in mathematics and English. Not only does this
improve time to degree, it reduces remediation costs in keeping with Trustees’ policy.
- Leverage pooled systemwide resources to reduce the cost of electronic content and digital
- Strengthen investments in Learning Management Systems and other information technology
applications such as the Common Management System and library systems by developing
a hardware architecture system that allows each of the systems to integrate seamlessly with
- Develop and sustain an appropriate level of faculty development in academic technology to ensure
the best use of new and emerging digital resources in the teaching and learning process.
In response to the need for initial improvements in these areas of CSU academic technology, onetime
funds have been expended in the past few years to develop the needed structural foundation.
The CSU funding study estimated that over $8 million would be required in one-time funds to fully
launch these initiatives and conduct pilot studies that would inform the system about the campus
costs of maintaining these initiatives; the $5 million allocation requested in 2007/08 will provide the
initial funding to support these academic initiatives and would provide for their maintenance in future
years. Over the next five years, the CSU has projected the need for a total base budget increase of
$116.5 million, including this $5 million allocation, to fund one-time and ongoing technology projects
that sustain, maintain, and significantly broaden academic technology support across the CSU.
Libraries, $2.5 Million
Since 1992, the CSU has been investigating numerous ways to eliminate its core library deficiencies
by developing new technologies to keep volumes current and adequate to meet the academic and
intellectual research needs of CSU students and faculty.
In fiscal year 2000/01, the CSU identified a permanent base budget need of $12 million to keep its
permanent collection of books, serials, and periodicals current. This increase, added to existing
budget support of $27 million, would have allowed annual ongoing funding to support restoration
of permanent volumes needed in campus on-site collections and to establish new electronic and
alternative collections through the use of new technologies to expand the campuses’ access to
Since 2000/01, the CSU has been able to provide $6.9 million to increase permanent base support for
libraries. However, state budget reductions in 2003/04 and 2004/05 reversed CSU efforts to reduce the
structural deficiencies. In addition, declining purchasing power of dollars allocated for libraries is an
important factor that contributes to continued growth in library deficiencies. Based on Department
of Finance price letters, the purchasing power of CSU dollars budgeted for libraries has declined,
on average, 6 percent annually.
The CSU Council of Library Directors estimated in 2005 that $13.5 million was needed to update the
base budget for libraries, to provide resources to keep volumes refreshed, and to secure new
acquisitions on an annual cycle. The CSU provided $2.5 million in permanent funds in 2006/07 to
begin to address this need. For 2007/08, another $2.5 million in permanent support will be provided
to expand systemwide programs for the Electronic Core Collection of bibliographic and full-text
resources that are available to all CSU students and faculty. Additionally, these funds will support
continued enhancement of online information searching and access tools as well as other
systemwide projects designed to increase effective use of information resources.
Deferred Maintenance, $2.5 Million
CSU deferred maintenance remains an area of significant budgetary deficiency. Deferred
maintenance occurs when scheduled repairs are delayed to subsequent years due to project cost,
timing, and/or lack of available resources. Historically, the CSU has also used the deferred
maintenance term to describe or include the delayed replacement of building systems that have
exceeded their useful life as part of the funding deficiency.
Between the 1994/95 and 1999/2000 fiscal years, the state and the CSU provided permanent base
budget resources for ongoing maintenance support to address funding deficiencies. However, during
that six-year period, the state supported only $61 million in one-time funds to address a deferred
maintenance backlog that exceeded $350 million. In 2000/01, the CSU used long-term funding provided
by the partnership agreement to reduce the backlog by $2.8 million on an annual basis. Unfortunately,
no funds were available to further reduce the backlog in the next four fiscal years (2001/02 through
2004/05). Consequently, not only was further reduction of the backlog halted, but inflation and the
continual aging of buildings has caused the long-term maintenance repair and replacement needs to
increase. Between 2005/06 and 2006/07, $4 million was used to support further reduction of the
backlog of deferred maintenance. The 2007/08 support budget adds another $2.5 million to this effort.
In 1999, the CSU commissioned a study to better define the annual funding needed to replace building
components and systems that have exceeded their life cycle. The purpose of the study was to
confirm whether or not the long-term funding sought by the CSU would halt growth in the deferred
maintenance backlog consistent with the intent of the partnership agreement.
The results of the study indicated that due to the substantial amount of construction from the late
1950s to the mid-1960s, on average, $100 million per year is needed to replace mechanical, electrical,
and plumbing systems that have now exceeded their useful life. Annual need varies around this
average as the study model takes into account building age, life cycle of systems, and campus
repairs or replacements performed in the building.
To address some of this funding deficiency for buildings and systems beyond their useful life, the
CSU received approval from the Department of Finance to include renewal of capital as a component in
the CSU Capital Outlay Program beginning in 2005/06. The capital renewal program is envisioned to
range from $25 million to $50 million annually; $26 million was funded in 2005/06, and $50 million will
be funded in each of 2006/07 and 2007/08. A structured approach that utilizes capital outlay funding with
support dollars will reduce deferred maintenance and improve the extended use of CSU capital assets.
The CSU is committed to sustaining and increasing its maintenance budgets in order to provide safe,
functional, and efficiently operating buildings to serve its students, faculty, and staff. However, the
ongoing maintenance rate of $8.84 per square foot funded in 2007/08 does not recognize scheduled
maintenance need at an estimated cost of $1.41 per square foot. Campuses currently use productivity
and efficient management of available resources to satisfy a portion of this unfunded need, but they
most often have to delay scheduled repairs due to a lack of available funds, which increases the
deferred maintenance backlog.
The table below shows the CSU budgeted deferred maintenance backlog from 1993/94 through
2007/08 Calculation of Deferred Maintenance Backlog
|2007/08 CA-CPI % source:
of Finance, Planning Estimate Forecast, July 19, 2006
(calculated using a formula developed by the California Department
of Industrial Relations)