Sources of Revenue | 2012/2013 CSU Support Budget Executive Summary | Budget | CSU
2012/13 Executive Summary

Sources of Revenue

The 2012/13 California State University Support Budget includes a $332.9 million increase to the current CSU $2.1 billion General Fund (GF) base for a total of $2.4 billion.The 2012/13 California State University Support Budget includes a $332.9 million increase to the current CSU $2.1 billion General Fund (GF) base for a total of $2.4 billion. This level of state funding represents a modest increase to move the CSU towards traditional state-supported funding levels. The $332.9 million General Fund requested increase for 2012/13 budget is comprised of the following:

  • $327,881,000 to fund 5 Percent enrollment growth, programs, and operations;
  • $4,500,000 to replace tuition fee revenue loss due to increased financial aid provisions of recently enacted legislation, AB 131; and,
  • $489,000 to fund annual cost increases for the state Center for California Studies capitol fellows program.

The CSU 2012/13 budget plan also adjusts tuition fee revenue for changes in student enrollment patterns, such as changes in relative numbers of graduate and undergraduate students and full-time and part-time students. It also reflects tuition fee revenue loss associated with implementation of AB 131, as well as tuition fee revenue from the recommended 5 percent resident student enrollment growth. The net change in tuition fee revenue (after adjusting for forgone revenue associated with financial aid) due to these factors is $64,392,000 as summarized below:

  • Change in Enrollment Patterns - ($15,576,000)
  • Revenue Loss Due to AB131 - ($4,500,000)
  • 5 Percent Enrollment Growth - $84,468,000
    (16,586 FTES Base Revenue)

The total 2012/13 support budget plan increase in sources of funds is $397.3 million.

State General Fund Increase $332,870,000
Tuition Fee Revenue Adjustments $64,392,000
TOTAL $397,262,000

General Fund

Programs and Operations (top)

The 2012/13 CSU budget request is based on a General Fund increase of $332.9 million and tuition fee revenue adjustments of $64.4 million to fund the cost of budget plan expenditure augmentations for mandatory costs, enrollment growth, employee compensation, academic programs, urgent maintenance, technology, and instructional equipment needs. The General Fund increase includes funding for the Center for California Studies. These cost increases are detailed in the next section.

5 Percent Enrollment Growth (top)

The 2012/13 budget plan General Fund augmentation supports a 5 percent increase in state-supported student enrollment. This funding will sustain the CSUís ability to address Californiaís higher education demand and increase CSU student enrollment above its 2011/12 base.

CSU enrollments are once again on an upward trajectory, following emergency enrollment restrictions necessitated by the sharp funding reduction of the 2009/10 fiscal year. Many CSU campuses experienced record levels of applications and enrollments in the most recent term (fall 2011). Demand for transfer from community colleges to the CSU remains extraordinarily high. Increasing enrollment from the current state-funded level of 331,716 California resident FTES by 5 percent to a new level of 348,302 is entirely feasible, given adequate support from the state. Restoring full access to baccalaureate and masterís instruction at the CSU is a vital and urgently needed investment by the state for the sake of student access and for the sake of Californiaís economic recovery and workforce development.

Based on the state-approved marginal cost methodology, the 2012/13 estimated gross marginal cost rate of instruction has been calculated at $10,606 per FTES. The General Fund share of this rate is $6,812. The tuition fee revenue share of this rate is $2,529, which reflects a one-third set aside ($1,265) for forgone revenue associated with student financial aid.

2012/13 Total Marginal Cost of Instruction $10,606
Less: Forgone Financial Aid ($1,265)
2012/13 Marginal Cost after Forgone Financial Aid $9,341
Net Tuition Fee Revenue ($2,529)
GENERAL FUND SUPPORT $6,812

The 2012/13 net marginal cost support for enrollment growth ($9,341 per FTES) for the proposed 5 percent enrollment growth (16,586 FTES) equates to $154.9 million.

While beneficial marginal cost components were added in 2006/07, the state Department of Finance (DOF), the Legislative Analystís 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.

2012/13 Tuition Fee Revenue (top)

A revenue adjustment of -$15.6 million will be reflected in 2012/13 campus revenue assumptions due to changes in resident and nonresident enrollment patterns used in 2011/12 revenue calculations. CSU tuition fee revenue projections are based on the most recent past-year student classification and fee paying distribution patterns, and adjustments are made annually to account for the year-to-year change in revenue assumptions. The most recent past-year data available for 2012/13 calculations are for the 2010/11 college year.

In October 2011, Governor Brown signed AB 131, one component of the California Dream Act. Among other provisions, this new law provides eligibility to a new group of students for institutional financial aid at the CSU and other public higher education segments. This new group of students includes individuals who are not currently residents of California, but who attended at least three years of high school in California and meet other specified conditions under state law. We estimate that roughly 2,000 students will qualify for State University Grants beginning with the winter and spring terms of 2013. Since State University Grants result in a loss of tuition fee revenue to CSU campuses, we estimate that the new law will result in a tuition fee revenue loss of roughly $4.5 million in 2012/13 and about $9 million annually thereafter. This budget plan proposes that the state replace this revenue loss.

Additionally, a 5 percent increase in resident FTES enrollment (16,586 FTES) is projected to generate $84.5 million in new tuition fee revenue, which reflects a one-third set-aside of forgone revenue associated with students receiving CSU grant aid.