Uses of Revenue | 2010-2011 CSU Support Budget Executive Summary | Budget | CSU
2010-2011 Executive Summary

Uses of Revenue

Students in computer lab. The 2010/11 California State University Trustees’ Support Budget recommends an expenditure plan based on estimated revenue from the Compact agreement and restoration of General Fund support. The expenditures outlined below address the university’s minimum needs for the 2010/11 fiscal year and, in addition to General Fund restoration, include mandatory costs, access to student services and instruction, compensation, long-term needs, and the Center for California Studies.

Restore General Fund Support, $281,768,000

As noted in the discussion under the “Sources of Funds” section, the 2009/10 Budget Act included two reductions in state General Fund support that were intended by the governor and legislature to be one-time in nature. Restoration of these funds would allow state funding per FTES to return at least to the level that existed when the governor signed the first revised budget act of 2008/09 (in February 2009). This amount was $8,466 per California resident FTES. Without the restoration, state funding support for the CSU in 2010/11 would be only $7,558 per FTES—or $908 less. This budget proposes restoring this $908 per FTES times the 2010/11 target enrollment level of 310,317 FTES—an allocation of $281.8 million. This allocation will allow restoration of prior levels of service to CSU students. The remaining $23.2 million ($305 million less $281.8 million) is used for mandatory cost increases and long-term need.

Mandatory Costs, $22,303,000

Mandatory costs are expenditures the university must pay regardless of the level of funding appropriated by the state. These costs include increases for health benefits, new space, and energy. Without funding for mandatory costs increases, campuses would be required to redirect existing resources from other program areas to meet these obligations. In order to preserve the integrity of CSU programs, the 2010/11 support budget plan provides for the following increases in mandatory cost obligations:

Health Benefits $9,700,000
New Space $5,375,000
Energy $7,228,000
Total $22,303,000

Access to Student Services and Instruction, $56,036,000

In the early part of this decade the recession in California resulted in state budget cuts and unfunded mandatory costs to the CSU that cumulatively came to more than $500 million. These cuts were accompanied by budget control language that instructed the CSU to absorb them “away from the classroom.” The Student Services division took some of the largest cuts in the university during this time. These cuts meant that many student services programs to aid successful progress toward bachelor’s degrees could not be implemented. This request seeks support for projects that will facilitate student success in achieving the baccalaureate degree in an efficient and timely fashion. California will prosper only with a well-educated population to sustain its economic, social, and civic well-being. This funding included in this request will help the CSU bring the reality of a high-quality university education to more students, especially those from underrepresented communities, and will then provide these students with the support necessary for successful completion of the baccalaureate degree.

Of all the first-time freshmen in the California State University in fall 2008/09, 54 percent were from traditionally underrepresented groups. Many of these students are the first in their families to aspire to and attend college. The CSU has made their success a systemwide priority by offering support at key times in their academic careers that are known to be vulnerable to discouragement and dropout. This funding will be used to improve “success” by improving and expanding advising opportunities for students, hiring more tutors, strengthening student orientation programs, providing additional staff at learning centers, and improving articulation efforts with community colleges. The “access” initiatives are proposed to support outreach and authentic access efforts to California’s lowest income families and disabled students, as well as enhance online access to degree programs for underserved populations and those without direct access to a CSU campus. In addition, this funding will allow for a broader sweep of improved services, such as increased access to psychological counseling or financial aid assistance, and would also encompass various quality enhancements for instruction.

Student Services for Success
In the Student Services for Success initiative, nearly $20 million is sought for improved services for undergraduates in the CSU. Enhanced undergraduate degree major advising, strengthened programs for new student orientation, staff for tutoring and study skills help centers and for articulation efforts, and funding for mental health counseling centers are the main focuses of this funding.

Student Services for Authentic Access to the CSU
Just over $36 million is requested to support outreach and authentic access. A portion of the requested funds will enhance the CSU’s ability to show students that college is a real possibility, and then educate them about the reality of what it takes to enter college fully prepared. Another piece of this funding will help to create increased access for students from California’s lowest income families, including additional Education Opportunity Program grants for 4,770 students, and will seek to provide more authentic access for students with learning disabilities. Online access to degree programs for underserved populations and those without direct access to a CSU campus is another priority of this initiative.

2.5 Percent Compensation Increase, $75,875,000

The CSU Board of Trustees recognizes compensation for faculty, staff, and management as a key element of the university’s success. The ability to offer a competitive compensation package is critical to the CSU’s ability to recruit and retain faculty, staff, and management employees who contribute to the CSU’s mission of excellence. The CSU plans to use $75.9 million of the Higher Education Compact to fund a 2.5 percent compensation pool, subject to collective bargaining, for all employee groups, effective July 1, 2010. The 2010/11 cost of a 1 percent compensation increase is based on adjusted campuses’ 2009/10 final budget salaries and salary-related benefits (OASDI, Medicare, and retirement) and is summarized in the following table:

ESTIMATED 2010/11 COST OF 1 PERCENT COMPENSATION INCREASE
  2008/10 Final Budget
Compensation (Adjusted1)
2010/11 Cost of
1% Increase
Faculty $1,550,965,000 $15,510,000
Staff 1,484,012,000 14,840,000
Total $3,034,977,000 $30,350,000
Cost of 2.5% Increase   $75,875,000

1Adjusted for $7.5 million 2009/10 employer-paid retirement rate increase and to add back $273 million compensation reductions from 2009/10 employee furloughs.


Long-Term Need, $47,000,000 (top)

The 2010/11 budget plan includes greater funding to address at least a portion of the CSU’s long-term budget needs. Long-term budget needs have accumulated in key areas in which historical deficits prohibit full funding within a single budget year. These areas of need are recognized in the Compact. In 2010/11, the Compact includes an additional 1 percent increase to the prior year’s base to address the annual budgetary shortfalls in state funding for core areas of the budget critical to maintaining the quality of the academic program, including instructional equipment, instructional technology, libraries, and deferred maintenance.

In 2010/11, $25 million will be used to fund improvements in academic technology across the CSU. A study completed in summer 2005 found that there has been chronic underfunding of academic technology. Major cost areas were identified by campus representatives as falling below minimum baseline targets under even the most conservative assumptions and definitions, which address existing and emerging baseline needs, core academic technology needs, and systemwide academic technology initiatives. Budget reductions in 2008/09 and 2009/10 limited expenditures on necessary infrastructure to support the needed academic technology. To effectively implement and maintain these improvements in academic technology, some of the $25 million will need to be expended to refresh and improve existing technology infrastructure.

This study identified the need to increase academic technology funding by $116.5 million over a five-year period. The CSU began to address this need through a permanent allocation of $5 million in fiscal year 2007/08. Expenditures in 2007/08 were focused on the development of the necessary structural foundation to address these needs and to begin development of the digital marketplace initiative. Expenditures also served to strengthen investments in learning management systems and enhance faculty development in academic technology. The CSU continued its focus on improving student success by providing online information, testing tools, and learning modules to allow students to be “college-ready” in mathematics and English. Because anticipated funding was not available to advance these efforts in 2008/09 or 2009/10, gains achieved are at risk.

The funding included for fiscal year 2010/11 will significantly broaden academic technology support across the CSU through expansion of efforts in the target areas of existing and emerging baseline needs, core academic technology needs, and systemwide academic technology initiatives begun in 2007/08. In addition to funding necessary supporting technology infrastructure, expenditures will also support related human resource costs required to achieve initiatives left in abeyance during 2008/09 and 2009/10.

The remaining $22 million of the $47 million requested will be directed toward backlogs in library volumes and electronic information resources ($3 million) and deferred facility maintenance projects ($19 million). Some of the $3 million targeted for library and information resources will serve to replace expenditure reductions made in the 2008/09 and 2009/10 fiscal year. The funds allocated to deferred maintenance will enable the CSU to ensure that required maintenance projects can continue and that progress made toward library and academic technology initiatives to date is sustained.

The current estimated backlog of funds needed to address deficiencies in CSU purchases for library volumes, serials, periodicals, and electronic resources exceeds $6 million. This backlog principally affects the CSU’s ability to maintain and grow its core collection of materials needed for student academic research. Although the CSU is investigating alternative approaches to address deficiencies in its permanent collections, core funding support is needed to pursue these efforts.

The CSU’s defined backlog of deferred maintenance based on health and safety facility requirements would still total over $427 million even after the $19 million allocated in this budget. The annualized cost to fund the defined backlog over a 10-year period would be $42.7 million. The deferred maintenance backlog is compounded by annual inflationary cost increases for completing repairs and insufficient budget support that restricts the CSU’s ability to adequately fund special repairs as buildings age.