2009/10 Support Budget II

Additional Challenges

Additional One Percent Compensation Increase, $31.5 Million

In an effort to further offset critical and ongoing salary-related challenges, $31.5 million is requested to fund an additional 1 percent compensation increase in 2009/10 for all CSU employee groups. 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 CSU’s ability to attract and retain a highly motivated and qualified workforce.

While increases in budget funding afforded some relief to address faculty and staff compensation in 2005/06 through 2007/08 after receiving inadequate funding for compensation increases in the preceding few years, the need to further address faculty and staff compensation is compounded due to the absence of funding from the state for compensation increases in the 2008/09 fiscal year. The supplemental 1 percent compensation funding for all CSU employee groups would help to address numerous CSU employee retention and recruitment challenges and help the CSU minimize past-year deficiencies in compensation funding for all employee groups.

There are significant salary lags within a number of CSU classifications. For example, based on CPEC’s review of 20 higher education comparison institutions, the 2008/09 CPEC-projected faculty salary lag at the CSU is 18.5 percent. After adjusting for the faculty 2008/09 compensation increases, the unfunded projected faculty salary lag is 18.1 percent. Based on 2008 Human Resources staff market analysis, many employee groups have double-digit salary lags, including physicians (18.3 percent), health care support (15.5 percent), and various technical and administrative support groups (12.8 to 18.2 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.

The persistent salary lags have contributed to the university’s challenges to recruit and retain critical faculty and staff and could impact the ability of the CSU to meet educational and business operational goals and requirements. This supplemental funding request of $31.5 million would further help the CSU address the impact of minimal compensation funding in prior years for all employee groups.