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

Uses of Revenue

Students in computer lab. The 2011/12 California State University Trustees’ Support Budget recommends an expenditure plan based on General Fund and tuition revenue increases to cover the cost of expenditure augmentations. The expenditures outlined below address the university’s minimum needs for the 2011/12 fiscal year. In addition to replacement of $106 million in one-time federal funds, the request includes increases for mandatory costs, compensation, the CSU Graduation Initiative and Student Success programs, enrollment growth, long-term needs, and the Center for California Studies.

Sustain Student Access and Services, $106,000,000

The 2011/12 support budget request restores on a permanent basis the one-time federal funds ($106 million) received in 2010/11 from the State Fiscal Stabilization Fund that was part of the American Recovery and Reinvestment Act (ARRA). This funding will support the enrollment restoration and student access services funded by one-time federal funds in 2010/11.

Mandatory Costs, $48,965,000

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, dental premiums, new space, and energy. Without funding for mandatory cost 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 2011/12 support budget plan provides for the following increases in mandatory cost obligations.

Mandatory Costs
Health Benefits $36,407,000
Dental Premiums $3,242,000
New Space $3,816,000
Energy $5,500,000
Total $48,965,000

Graduation Initiative and Student Success, $58,000,000

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 and Academic Affairs divisions took some of the largest cuts in the university during this time. These cuts, combined with the most recent budget reductions, meant that many programs to aid successful progress toward bachelor’s degrees could not be implemented.

This funding in the amount of $58 million for the CSU Graduation Initiative and Student Success programs will allow the university to begin to restore critical services such as advising, and put in place additional programs focused on student success—to build on the CSU’s strong track record for outreach, access, and educational excellence, and focus on bringing every student to successful degree completion.

These funds will be used in three major program areas:

  1. Academic Advising - $13.3 million to provide significant enhancements to the current academic advising structure available to CSU students.
  2. Student Preparation – $25.8 million to provide essential support to help incoming freshmen attain college readiness before arriving on a CSU campus, and provide underserved CSU students with resources that greatly increase their likelihood to persist to a college degree.
  3. Academic Programs – $18.9 million for academic programs that have a positive impact on improving graduation rates and closing the achievement gap.
3 Percent Compensation Increase Pool, $96,180,000

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 $96.2 million to fund a 3 percent compensation pool, subject to collective bargaining, for all employee groups, effective July 1, 2011. The 2011/12 cost of a 1 percent compensation increase is based on estimated 2010/11 final budget salaries and salary-related benefits (OASDI, Medicare, and retirement) and is summarized in the following table.

ESTIMATED 2011/12 COST OF 1 PERCENT COMPENSATION INCREASE
  2010/11 Final Budget
Compensation (Adjusted1)
2011/12 Cost of
1% Increase
Faculty $1,611,704,000 $16,117,000
Staff 1,594,295,000 15,943,000
Total $3,205,999,000 $32,060,000
Cost of 3% Increase $96,180,000

12010/11 Member Categories, State Miscellaneous - Tier 1 increased from 16.917% to 19.922% (3.005%) and State Peace Officer/Firefighter increased from 25.848% to 28.887% (3.039%).

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

The 2011/12 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. In 2011/12, funding is necessary in order to address the annual budgetary shortfalls in state funding for core areas of the budget critical to maintaining the quality of academic programs, including instructional equipment, academic technology, digital library, and deferred maintenance.

In 2011/12, $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 to address existing and emerging baseline needs, academic technology needs, and systemwide academic technology initiatives. Budget reductions in 2009/10 and failure to receive state operating budget increases since 2008/09 limited CSU resources that could be expended on necessary infrastructure to support the needed academic technology.

The 2005 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 were focused on the development of the necessary structural foundation to address these needs and to begin development of affordable learning solutions and online education initiatives. 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 leveraging technology in support of the CSU Graduation and Early Start Initiatives. Because anticipated funding was not available to advance these efforts in the years from 2008/09 to 2010/11, gains achieved are at risk.

The funding included for fiscal year 2011/12 will significantly broaden academic technology support and related human resources across the CSU through expansion of efforts in the target areas of existing and emerging baseline needs, and systemwide academic technology initiatives begun in 2007/08.

The remaining $22 million of the $47 million requested will be directed toward digital scholarly and instructional resources ($3 million) and deferred facility maintenance projects ($19 million). The $3 million allocation to libraries will restore and enhance library and digital information resources that are critical for more efficient access to scholarly and instructional data. The funds allocated to deferred maintenance will enable the CSU to ensure that required maintenance projects can continue and that the progress made toward library and academic technology initiatives to date is sustained.

2.5 Percent Enrollment Growth, $83,126,000 (top)

The 2011/12 budget plan includes 2.5 percent enrollment growth of 8,497 resident FTES from a 2011/12 resident FTES base of 339,873. With nonresident students added, the 2011/12 enrollment total is 362,879 FTES.

2011/12 Full-time Equivalent Students Enrollment Target
2011/12 Resident FTES Base 339,873
2011/12 Resident Student Enrollment Growth (2.5%) 8,497
2011/12 Total Resident FTES 348,370
Nonresident Students
(for nonresident tuition paying purposes)
14,509
2011/12 Total FTES 362,879

This enrollment growth will be funded using a marginal cost rate of $9,783 per FTES, which excludes a one-third set-aside for financial aid ($1,080) from the tuition portion of the marginal cost rate. The total funding required to sustain direct instruction, academic support, student services, institutional support, and plant operations is $83.126 million.

The following table summarizes estimated 2011/12 marginal cost funding for 2.5 percent resident enrollment growth in accordance with the state Department of Finance methodology.

Estimated 2011/12 Marginal Cost Per FTES
General Fund $7,624
Tuition Revenue (net of financial aid) $2,159
Net Marginal Cost Funding per FTES $9,783
Financial Aid Set-Aside (1/3 of total tuition portion) $1,080
Total 2010/11 Marginal Cost of Instruction $10,863
x 2011/12 Projected Enrollment Growth 8,497
2011/12 Marginal Cost Funding for Enrollment Growth $83,126,000