2008/09 Support Budget

Budgetary Challenges: One Percent Compensation Increase, $30.4 million

This BCP requests $30.4 million to fund an additional 1 percent compensation increase in 2008/09 for all CSU employee groups to further offset critical and ongoing salary-related challenges.

It is essential that the CSU fund compensation that supports 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 erodes the CSUís 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 to 14.5 percent from 2001 to 2005, whereas CSU compensation increases summed to only about 7 percent during that five-year period. Also, there are critical salary-related concerns within a number of CSU classifications that require special attention in the bargaining process. Further, the additional 1 percent compensation funding for all CSU employee groups would assist with addressing numerous CSU employee retention and recruitment challenges.

Assuming Compact funding levels, the CSU 2008/09 Support Budget plan will include a 3 percent compensation increase for all CSU employee groups and some funding for employee groups with significant salary lags. The additional 1 percent compensation will assist the CSU in minimizing past year deficiencies in compensation funding for all employee groups.

The table below indicates the annual U.S. Department of Laborís changes in state and local government and private industry employment salaries and wages from 2001 through 2005 versus CSU-funded compensation increases from 2001/02 to 2005/06:

U.S. Department of Labor, Bureau of Labor Statistics, Changes in Employment Cost Index Wages and Salaries Comparison with CSU Compensation Funding (2001 through 2005)

Calender Year 2001 2002 2003 2004 2005 5-Year Total
U.S. Department of Labor, Statistics        
State and Local Government
3.8% 3.1% 2.2% 2.1% 3.1% 14.3%
Private Industry
3.8% 2.6% 3.1% 2.6% 2.5% 14.6%
Average 3.8% 2.9% 2.7% 2.4% 2.8% 14.5%
Fiscal Year 2001/02 2002/03 2003/04 2004/05 2005/06 5-Year Total
CSU Final Budget Compensation Funding 2.0% 1.5%-1.68% 0.0% 0.0% 3.50% 7%-7.18%

In addition, there are significant salary lags within a number of CSU classifications. For example, based on CPECís 20 comparison institutions, the 2007/08 CPEC-projected faculty salary lag is 19.1 percent. After adjustment for the faculty 2007/08 compensation increases, the unfunded projected faculty salary lag is 12.9 percent. 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. Some examples are physicians (21.61 percent), health care support (e.g., nurse practitioner [17.67 percent], LVN [21.10 percent], and RN [35.79 percent]), and various technical and administrative support groups that include accounting clerks (23.31 percent), desktop publishing/graphics specialists (41.1 percent), equipment systems specialists (23.14 percent to 32.56 percent), and public affairs/communication specialists (22.59 percent to 38.21 percent). The inability to retain and recruit critical faculty and staff impacts the ability for the CSU to meet educational and business operational goals and requirements.

Further, the CSU has experienced significant turnover rates with some classifications due, in large part, to inadequate compensation incentives. With CSU Public Safety Officers and Academic Support employees, the turnover rate has been escalating between 2002/03 and 2006/07, rising respectively from 9.93 percent to 12.94 percent and 6.28 percent to 9.42 percent. High turnover rates give rise to a whole host of challenges at the CSU including public safety concerns for students and employees.

The additional 1 percent compensation funding for all CSU employee groups will further the CSU commitment to address insufficient compensation funding accumulated over the past several years. In 2005, the CSU Board of Trustees reviewed current salary lags, and the recommended approach was to address the critical salaryrelated concerns over a five-year period, taking into consideration funding provided in the Governor/CSU Higher Education Compact and any additional revenue necessary to address the identified lags.


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Last Updated: November 13, 2007