Sources of Revenue | 2011-2012 CSU Support Budget Executive Summary | Budget | CSU
2011-2012 Executive Summary

Sources of Revenue

The 2009/10 Budget Act, as revised in July, provides $2.346 billion—a drop of $625 million.The 2011/12 California State University Support Budget includes a $378.7 million increase to the CSU 2010/11 $2.69 billion General Fund base (with 2010/11 retirement adjustment) for a total of $3.07 billion. After severe General Fund reductions in the 2008/09 and 2009/10 fiscal years (-$625 million), the CSU budget began to recover in 2010/11 with partial restoration of the General Fund budget ($199 million) and funding for enrollment growth ($60.6 million). This 2011/12 CSU budget returns the CSU General Fund appropriation to slightly above the 2007/08 level when it was $2.985 billion. The $378.7 million General Fund increase for 2011/12 is comprised of the following:

  • Replace One-Time Federal Funds - $106,000,000
  • 2.5 Percent Enrollment Growth - $64,781,000
  • Graduation Initiative and Student Success - $58,000,000
  • Buy-Out of 10 Percent Tuition Increase - $124,470,000
  • General Operations - $24,901,000
  • Center for California Studies - $563,000

Another principal element of the CSU budget framework is tuition revenues. The CSU 2011/12 budget plan includes tuition revenue from the full-year effect of the proposed 2010/11 mid-year tuition increase, changes in enrollment patterns (between graduate, undergraduate, full-time, part-time, etc.), and 2.5 percent enrollment growth. The total 2011/12 tuition revenue (net of forgone revenue for financial aid) as summarized below is $61,119,000:

  • Full-Year Effect of 2010/11 Mid-Year Tuition Increase - $27,138,000
  • Change in Enrollment Patterns - (-$1,389,000)
  • 2.5 Percent Enrollment Growth - $35,370,000
    (8,497 FTES Base Revenue)

The increase to the 2011/12 support budget plan is $439.83 million. However, $106 million of this amount is not a true increase, but instead, a conversion of one-time federal funds to ongoing state funds.

State General Fund Increase $378,715,000
Tuition Revenue Adjustments $61,119,000
TOTAL $439,834,000

General Fund Increase (top)

In 2011/12, the CSU budget is based on a General Fund increase that along with tuition adjustments will cover the cost of budget plan expenditure augmentations, such as mandatory costs, compensation, academic programs, and enrollment growth. The General Fund increase is calculated using the prior-year General Fund appropriation adjusted for scheduled lease revenue bond payments and retirement.

Included within the 2011/12 General Fund increase is $563,000 for the Center for California Studies’ unfunded liability. The Center’s General Fund appropriation—a stand-alone appropriation in the state’s annual budget bill (currently $3 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 California.

Graduation Initiative and Student Success (top)

The 2011/12 funding request includes a General Fund augmentation of $58 million to enable more CSU students to achieve a high-quality university education, especially those from underrepresented communities, and, once enrolled, provide these students with the support necessary for successful completion of the baccalaureate degree. The projects funded by this augmentation will facilitate student success in achieving the baccalaureate degree in an efficient and timely fashion.

2.5 Percent Enrollment Growth (top)

The 2011/12 budget plan includes a General Fund augmentation of $64.78 million to support a 2.5 percent increase in CSU resident student enrollment. The intent is to further expand the CSU’s ability to address California’s higher education demand and increase CSU student enrollment above its 2010/11 base, which was reduced due to budget constraints.

In accordance with the Department of Finance’s marginal cost methodology, the 2011/12 estimated marginal cost rate of instruction is $10,863 per FTES. The General Fund share of this rate is $7,624. The tuition revenue share of this rate is $2,159, which excludes one-third set aside ($1,080) for financial aid.

2011/12 Total Marginal Cost of Instruction $10,863
Less: Tuition Revenue ($3,239)
Net Tuition Revenue ($2,159)  
Financial Aid Set-Aside ($1,080)  
GENERAL FUND SUPPORT $7,624

The 2011/12 marginal cost General Fund support ($7,624) for an equivalent 2.5 percent enrollment growth (8,497 FTES) equates to $64.78 million.

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 single 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.

Buy-Out of 10 Percent Tuition Increase (top)

The 2011/12 budget plan proposes a General Fund buy-out of a 10 percent tuition increase. This is equivalent to $121.5 million, as it applies to the current resident enrollment target of 339,873 full-time equivalent students (FTES), and will also apply to new enrollment of 8,497 FTES equaling $2.97 million, for a total of $124.47 million in new General Fund revenue for 2011/12.

The following table reflects current and recommended tuition rates based on the percentage increase described above.

STUDENT LEVEL Fall 2010/11
Rates1
2010/11 AY
Rates After
Recommended
Mid-Year Increase2
2011/12 AY Rates
with No General
Fund Buy-Out
(10%)
Undergraduate
Regular 4,230 4,440 4,884
Limited 2,454 2,574 2,832
Credential Program Participants
Regular 4,908 5,154 5,670
Limited 2,850 2,988 3,288
Graduate/Post-Baccalaureate
Regular 5,214 5,472 6,018
Limited 3,024 3,174 3,492
1Rates as of October 2010
2Annualized Rate

Undergraduate tuition at the CSU continues to be the lowest when compared to rates at 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 tuition comparisons.) The average 2010/11 academic year resident, undergraduate student tuition and fees at the CSU are $5,285 (including campus-based fees) and at comparison institutions are $8,682. The total CSU 2010/11 systemwide and campus tuition and fees average is comprised of $4,335 in tuition ($2,115 in fall, $2,220 in spring) and $950 in average campus-based fees that must be paid to enroll in or attend the university.

Net Tuition Revenue Adjustments (top)

At its June 2010 meeting, the CSU Board of Trustees (BOT) approved a 5 percent tuition increase. The BOT will consider a mid-year increase for 2010/11 at its November 2010 meeting. Subject to approval, the full-year effect of this potential mid-year increase is a tuition revenue adjustment in 2011/12 of $27.14 million net of funds set aside for financial aid ($13.57 million).

A revenue adjustment of -$1.39 million is applied in 2011/12 due to changes in resident and nonresident enrollment patterns from prior years.

A 2.5 percent increase in resident FTES enrollment (8,497 FTES) is projected to generate $35.37 million in new tuition revenue net of a one-third financial aid set-aside ($9.18 million).

Total 2011/12 revenue adjustments amount to $61.12 million net of financial aid set-asides ($22.75 million).

Net State University Tuition Revenue Adjustments
Full-Year Effect of Mid-Year Increase
(Winter/Spring 2011)
$27,138,000
Change in Enrollment Patterns ($1,389,000)
2.5 Percent Enrollment Growth $36,855,000
Total Tuition Revenue Adjustments $61,119,000