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)
|U.S. Department of Labor, Statistics
State and Local Government
|CSU Final Budget Compensation Funding
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.