2008/09 Budgetary Challenges

One Percent Compensation ($30.4 Million)

Total compensation packages are critical to support recruitment and retention of highly qualified and motivated faculty, staff, and management. 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 erode the CSU’s ability to attract and retain a highly motivated and qualified workforce.

Employee salary lags were exacerbated due to lack of funding for adequate compensation increases between 2001/02 and 2004/05 and have resulted in ongoing compensation deficiencies for all CSU employee groups. Based on U.S. Department of Labor reports, public and private sector average increases in employment salaries and wages summed 14.5 percent over the five-year period from 2001 to 2005 while salary increases in the CSU over that same period summed only about 7 percent.

Also, there are critical salary-related concerns within a number of CSU classifications that require special attention in the bargaining process if the CSU is to successfully negotiate contracts in the 23 years ahead. With regard to CSU faculty, the 2007/08 projected unfunded salary lag is 12.9 percent, based on the California Postsecondary Education Commission’s (CPEC) 20 comparison institutions. Also, systemwide CSU Human Resources is currently finalizing 2006/07 staff market analyses. Upon preliminary analysis, it has been observed that many classifications have double-digit salary lags that include physician, health care support (e.g., nurse practitioner, LVN, and RN), and various technical and administrative support groups (e.g., accounting clerks, desktop publishing/graphics specialists, equipment systems specialists, and public affairs/communication specialists).

The persistent salary lags have contributed to the university’s challenges to retain and recruit critical faculty and staff and could impact the ability of the CSU to meet educational and business operational goals and requirements. This supplemental funding request of $30.4 million would further assist the CSU to address the impact of minimal compensation funding in prior years on all CSU employee groups.