2008/09 Support Budget

Budget Development Message

Students having a discussion on campus lawn The 2008/09 California State University (CSU) budget represents an essential opportunity for investment in California’s economy. Meeting the demand for student access and increasing graduation rates at the CSU are direct steps toward addressing California’s workforce needs, which in turn will generate tax revenue critical to the fiscal solvency of the state. Over the past three years, the governor and the legislature have approved a CSU budget under the Higher Education Compact that resulted in the funding necessary to enhance student access as well as to increase resources for libraries, technology, and deferred maintenance. In addition, the Compact has ensured funding for the CSU’s ever-increasing health benefits and energy costs and provided funding to begin to address salary lags for all employee groups. The governor and the legislature have recognized the role of the CSU to meet the critical workforce needs for K-12 math and science teachers and nursing programs and supported these efforts with funding above the Compact.

Increased state funding has helped the CSU to increase the number of underrepresented students enrolled on our campuses and resulted in the highest number of graduates in 2007 at 88,000. Expanding higher educational opportunities for all Californians will not only stimulate the economy by producing an educated and technologically prepared workforce, it will inevitably curb the need for taxpayer-supported state programs. The funding requested in the 2008/09 budget is a valuable investment in California’s future, particularly given the state’s current budget challenges.

California is facing a difficult fiscal climate, with a projected state operating deficit of $8.6 million in the 2008/09 fiscal year. In recent history, the method for fixing the state’s ailing fiscal condition has been to reduce programs and services that do not have constitutional funding guarantees, state or federal mandates, or court-ordered funding. This approach resulted in a reduction of over $500 million in state support to the California State University and a dramatic increase in student fees.

The 2008/09 CSU budget proposes total revenue of $4.8 billion including $3.3 billion from the state General Fund, $1.4 billion in student fee revenue, and $124 million for reimbursements. Of our total funding, we assume a $322.7 million budget augmentation consisting of $288.2 million from the state General Fund and $34.5 million from new student fee revenue. The revenue under the Compact would be appropriated as follows:

General Operations Increase (4 percent) $117.0 million
Academic Infrastructure (1 percent) $ 29.2 million
Enrollment Growth (2.5 percent or 8,572 FTES) $ 68.8 million
10% Fee Revenue Augmentation $ 73.2 million
Revenue from Enrollment Growth $ 34.5 million
Total CSU Compact Augmentation $322.7 million

The CSU is recommending to the Board of Trustees, governor, and legislature the following expenditures for the 2008/09 budget:

Enrollment Growth (2.5 percent or 8,572 FTES) $ 82.5 million
Compensation $154.3 million
Mandatory Costs $ 36.0 million
Academic Technology $ 33.5 million
Financial Aid Set-Aside $ 6.9 million
Deferred Maintenance $ 6.5 million
Library Acquisitions $ 3.0 million
Total CSU Expenditures $322.7 million

The 2008/09 Support Budget Documentation provides the detail on the revenue and expenditure assumptions under the Higher Education Compact. In addition, the CSU recognizes nearly $155.2 million in “above Compact” budget proposals to address new and ongoing CSU budget issues such as:

Increasing the Ratio of Tenured Faculty $ 42.9 million
Additional Compensation (1 percent) $ 30.4 million
Additional Enrollment Growth (1 percent) $ 27.5 million
Student Services Initiative $ 24.6 million
Applied Research $ 12.0 million
Teacher Performance Assessment $ 10.0 million
Clinical Nursing $ 7.8 million
Total “Above Compact” Request $155.2 million

The 2008/09 CSU Support Budget is consistent with the Board of Trustees priorities and, upon approval by the Board, will be transmitted to the governor’s office and the legislature.

Patrick J. Lenz Rodney M. Rideau
Assistant Vice Chancellor of the Budget Director of the Budget

Content Contact:
Kara Perkins
(562) 951-4560
Technical Contact:
webmaster@calstate.edu

Last Updated: November 13, 2007