Sources of Revenue
The 2009/10 California State University Trustees' Support Budget is based on revenue assumptions derived from the Higher Education Compact, a six-year agreement signed in May 2004 with the governor, the University of California, and the CSU. Beginning in fiscal year 2005/06 and through 2010/11, the governor agreed to include in his annual state budget sufficient funds to support scheduled base budget increases for general operations, enrollment, and mandatory cost obligations for debt service and annuitant benefits. While the CSU received full Compact funding in 2005/06 through 2007/08, the state provided no funding increase to the CSU in 2008/09. In fact, total funding for the CSU from the General Fund fell short of the Compact by $215 million in 2008/09. Resumption of Compact-level increases in 2009/10 is vital to the CSU in order to meet the minimum level of funding needed to prevent further erosion to student access and the quality of educational services.
State General Fund revenue components of the Compact include the following increases for 2009/10:
- 4% for General Operations ($116,548,000)
- 1% for Core Academic Support Needs ($29,137,000)
- 2.5% for Enrollment Growth ($69,879,000)
- 10% Fee Revenue Augmentation (General Fund buyout) ($86,956,000)
General Operations Increase
In 2009/10, the CSU budget is based on a 4 percent increase for general operations in accordance with the Compact agreement. Each year, the increase for general operating support is calculated using the prior-year General Fund appropriation adjusted for scheduled lease revenue bond payments.
For 2009/10, the 4 percent increase for general operations is calculated as follows:
|2008/09 Final General Fund Budget||$2,970,706,000|
|Lease Revenue Bond Payment||(56,999,000)|
|Total, CSU 2008/09 General Fund Base Budget||$2,913,707,000|
|2009/10 General Fund Increase for General Operations
(2008/09 Base Budget x 4%)
Funded within the 4 percent 2009/10 general operations increase is $124,000 for the Center for California Studies. The Center's General Fund appropriation—a "stand-alone" appropriation in the state's annual budget bill (currently $3.1 million)—funds direct costs and administrative expenses for the Assembly, Senate, Executive, and Judicial Fellows programs and Center operations. The Center for California Studies is a state-funded program within the CSU that promotes understanding of and effective participation in the political and policy processes that govern the State of California.
Core Academic Support Needs (top)
For 2009/10, the Compact includes an additional 1 percent increase to the prior year's base to address budgetary shortfalls in core areas critical to maintain the quality of the CSU educational program. These areas include instructional equipment, instructional technology, and libraries, as well as recognition of ongoing deferred maintenance needs. The funding was not available in 2008/09 and is more necessary than ever in the 2009/10 budget to address structural deficiencies and strategic improvements in these critical areas.
For 2009/10, the 1 percent increase for core academic support needs is $29,137,000.
Enrollment Funding (top)
The Compact includes a 2.5 percent annual enrollment increase. For 2009/10, a 2.5 percent increase in CSU resident student enrollment yields an additional 8,572 full-time equivalent students (FTES) above currently funded enrollment. In total, the CSU will be funded to serve 351,465 resident FTES in 2009/10.
Based on the Department of Finance's marginal cost methodology, the gross marginal cost rate for 2009/10 is $10,526. The state share of this rate is $8,152 per FTES, which reflects a $2,374 offset for student fee revenue. The $8,152 state share multiplied by the 8,572 FTES enrollment growth equals $69,879,000. One-third of the marginal cost fee revenue is set aside for financial aid ($791 per FTES).
|2009/10 Total Marginal Cost of Instruction||$10,526|
|Less: Fee Revenue||(2,374)|
|General Fund Support||$8,152|
The marginal cost calculation is based on the updated methodology established in 2006/07 that included a decrease in the graduate unit load for a FTES from 15 to 12 units per term. The marginal cost calculation includes a component to recognize the cost to maintain and open space that supports existing and future enrollment levels. Also, the updated marginal cost methodology applies to resident student growth only.
While beneficial marginal cost components were added in 2006/07, the state Department of Finance (DOF), the Legislative Analyst's Office (LAO), the University of California (UC), and the California State University have yet to agree on a methodology that results in consistent marginal cost funding rates. The CSU will continue to participate in the review of the marginal cost calculation methodology with the DOF, LAO, and UC and strive for a consistent annual methodology that will adequately cover the cost of enrollment growth.
Revenue Augmentation in Lieu of Fee Increase (top)
The 2009/10 budget plan includes a General Fund revenue augmentation of $86,956,000 to support CSU budget plan expenditures in lieu of an increase in the State University Fee (SUF). With no change in CSU fee rates included in the 2009/10 budget request, additional state funding is needed to address critical needs associated with mandatory cost obligations and market-driven competitive salary requirements for the recruitment and retention of professionally trained and highly skilled employees.
Following are the 2009/10 CSU SUF rates, with no change from 2008/09:
|CSU STATE UNIVERSITY FEE RATES|
% change from
|Regular (6.1 or more units)||0.0%||3,048|
|Limited (0 to 6.0 units)||0.0%||1,770|
|Credential Program Participants|
|Regular (6.1 or more units)||0.0%||3,540|
|Limited (0 to 6.0 units)||0.0%||2,052|
|Regular (6.1 or more units)||0.0%||3,756|
|Limited (0 to 6.0 units)||0.0%||2,178|
The CSU continues to maintain the lowest undergraduate fees among the California Postsecondary Education Commission's (CPEC) 15 public higher-education comparison institutions. (The 15 comparison institutions have historically been referenced for faculty compensation and student fee comparisons.) The average 2008/09 academic year resident, undergraduate student fees at the CSU are $3,849 (including campus-based fees) and, at comparison institutions is $7,516. The total CSU 2008/09 systemwide and campus fees average is comprised of $3,048 in SUF (6.1 units or more) and $801 in average campus-based fees that must be paid to enroll in or attend the university.
State University Fee Revenue from Enrollment Growth (top)
State University Fee revenue associated with a 2.5 percent increase in resident full-time equivalent students (FTES) enrollment (8,572 FTES) is projected to generate $31.2 million in new student fee revenue. The Compact agreement calls for the university to set aside 20 to 33 percent of new SUF revenue for financial aid. The 2009/10 budget plan sets aside one-third of the student fee portion of the marginal cost of instruction for financial aid, which totals $6.8 million. Also, current-year SUF revenue adjustments due to changes in student enrollment patterns total $7.5 million, reflecting a resurgence in CSU nonresident student enrollments. The total SUF revenue from 2.5 percent enrollment growth and current-year adjustments is $38.7 million and net of financial aid set-aside is $31.9 million.
|2009/10 2.5 Percent Resident Enrollment Growth SUF Revenue||$31,191,000|
|2008/09 Current Year SUF Revenue Adjustments||7,503,000|
|Total SUF Revenue Increase||$38,694,000|
|Financial Aid Set-Aside from 2.5% Enrollment Growth||(6,780,000)|
|SUF Fee Revenue Increase Net of Financial Aid Set-Aside||$31, 914,000|