2008/09 Support Budget

Budget Proposal: Compensation

2008/09 Salary Lag Compensation Funding, $63.2 Million

The CSU developed a five-year strategic plan beginning in 2006/07 to reduce faculty and staff salary lags. Both the 2006/07 and 2007/08 final budgets included funding to address faculty and staff salary lags in addition to the 3 percent budgeted compensation increase pool for all employee groups. In 2008/09, the CSU will continue to address faculty and staff salary lags, with a total planned 2008/09 compensation pool of 5.83 percent that includes the 3 percent ($91.1 million) general compensation increase for all employee groups and an estimated 2.83 percent ($86 million) to address salary lags. An estimated 2.08 percent, ($63.2 million), of salary lag compensation increases will be funded in 2008/09 systemwide final budget allocations, with the remaining salary lag need funded by campuses. Actual compensation increases for represented employee groups are determined by individual collective bargaining agreements.

Salary Lag and CSU Compensation Funding

The California Postsecondary Education Commission (CPEC) issues an annual report on faculty salaries at California´s public universities to the Department of Finance and the Legislative Analyst´s Office. In fiscal year 2007/08, CPEC-projected faculty salary lag is 19.1 percent. After adjustment for contractual 2007/08 compensation increases, the unfunded faculty salary lag is 12.9 percent. The table below provides information on the CSU´s faculty salary lag history from 1998/99 through 2007/08:

Fiscal
Year
CPEC
Projected
Salary Lag
CSU Compensation
Increase
(Final Budget)
CSU Compensation
Increase
(Per Labor Agreement)
Projected
Unfunded Faculty
Salary Lag
1998/99 11.2% 5.7% 5.7% 5.5%
1999/00 11.1% 6.0% 6.0% 5.1%
2000/01 8.9% 6.0% 6.0% 2.9%
2001/02 7.9% 2.0% 3.18% 4.7%
2002/03 10.6% 1.5% 2.97% 7.6%
2003/04 11.6% 0.0% 0.8% 10.8%
2004/05 12.7% 0.0% 0.0% 12.7%
2005/06 16.8% 0.0% 3.5% 13.3%
2006/07 18.0% 3.7% 5.02% 13.0%
2007/08 19.1% 5.53% 6.21% 12.9%

Further, 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 years ahead. Upon preliminary analysis of 2006/07 staff market analyses, systemwide Human Resources has observed that many classifications have double-digit salary lags including 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).

Following are historical compensation settlements for non-faculty employee groups over the past 10 years:

Compensation Increase Pool For Non-Faculty (Final Budget)
1996/97 4.00% 2002/03 1.68%
1997/98 4.00% 2003/04 0.00%
1998/99 5.00% 2004/05 0.00%
1999/00 4.00% 2005/06 3.50%
2000/01 6.00% 2006/07 4.13% (avg.)
2001/02 2.00% 2007/08 5.27% (avg.)

Reducing the Salary Gap

Persistent salary lags have contributed to the CSU´s challenge 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.

Through the duration of the five-year plan to address salary lags, a 3 percent compensation increase for all employee groups is assumed each year along with additional compensation increases to reduce salary lags. As indicated in the table below, the estimated cost between 2008/09 and 2010/11 to address salary lags is $245 million, and to fund the 3 percent annual compensation increase for all employee groups is $296.3 million, for total compensation costs of $541.3 million:

Estimated Salary Lag Funding, 2008/09 - 2010/11
Fiscal
Year
Base Compensation
Increase (estimated)
Increase to Address
Salary Lags (estimated)
Total CSU
Compensation Increase
2008/09 3.0% $91,125,000 2.83% $86,008,000* 5.83% $177,133,000*
2009/10 3.0% $98,496,000 2.96% $97,232,000* 5.83% $195,728,000*
2010/11 3.0% $106,719,000 1.74% $61,771,000 4.74% $168,490,000
  Total $296,340,000 $245,011,000 $541,351,000

* Exceeds budget plan compensation funding

Based on Compact funding levels to support the CSU's budget plan from 2008/09 through 2010/11, an estimated $490 million will be available to fund compensation, whereas, an estimated $541 million will be required to meet negotiated and planned compensation increases from 2008/09 to 2010/11.


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

Last Updated: September 29, 2008