2013/14 Executive Summary

Three-Year Budget Summary

The tables on the following pages provide background data on the CSU's state-assisted budget for the current and prior fiscal years, and summarize the CSU's budget plan for the 2013/14 fiscal year. The budget plan focuses on the need to address critical unmet needs to fulfill the CSU's mission to educate Californians under the state's higher education master plan, and, to this end, to seek necessary reinvestment from the state. The planning approach is tempered by a recognition of the state's ongoing fiscal challenge, yet represents a credible statement of the CSU's key funding needs for the upcoming fiscal year.

Dollar amounts shown in the document are consistent with direction given by the state Department of Finance that all state entities should formulate budgets for the 2013/14 fiscal year assuming enactment of Proposition 30 by the voters. The amounts shown also assume the "rollback" of tuition fee rates to the 2011/12 academic year levels, which has been approved by the Board of Trustees contingent on enactment of Proposition 30. As shown in the summary on the next page, this rollback creates a revenue loss of $129.4 million in the current fiscal year and an ongoing revenue loss of $131.7 million starting in 2013/14. As also shown in the summary on the next page, the legislature and governor enacted Assembly Bill (AB) 1502, which includes a General Fund appropriation of $125 million to the CSU. That appropriation, also contingent on enactment of Proposition 30, would become effective in the 2013/14 fiscal year, and would almost offset the ongoing revenue loss starting in that fiscal year. Our planning approach treats this already enacted appropriation as part of the budget "baseline." This is appropriate since the appropriation merely replaces lost university revenue and does not add to the university's capacity to serve students or carry out programs or operations. Therefore, the increase in the CSU's annual budget that is needed to address high-priority unmet needs for 2013/14-a total of $441.8 million, as shown in the summary-is in addition to the $125 million appropriation in AB 1502.

This $441.8 million increase would bring the CSU's annual support budget to approximately $4.5 billion, with almost $2.0 billion from tuition fee revenues (net of financial aid and the tuition fee rollback) and a requested state appropriation of more than $2.5 billion. As shown in the summary, we estimate that additional tuition fee revenues generated by enrollment growth (offset to some extent by an anticipated change in the "mix" of graduate and undergraduate students and part-time and full-time students) will total $69.9 million. This revenue, combined with a recommended increase of state support of $371.9 million, would provide the needed ongoing revenues for the recommended spending increase. Specific justifications for the elements of planned spending increase are provided in the narrative pages for uses of revenue following the summary displays.

A much larger increase in resources could be justified for the CSU to fully meet the expectations placed upon it by the higher education master plan. This budget plan, however, strikes a balance in meeting the increased expenditure needs of the CSU between an amount that can be reasonably requested from the state and an amount that can be reasonably provided through tuition fee revenues generated by enrollment growth. Development of a 2013/14 budget request on these lines provides the governor and legislature with an achievable plan to begin reinvesting in the CSU for the sake of California's economic and social future. Failure of Proposition 30 at the November election would affect what is achievable, particularly in terms of what the state can contribute. Even under that circumstance, however, this document would constitute a legitimate statement of the CSU's key funding needs.

  2011/12
Actuals
Est. 2012/13
Final Budget1
2013/14
Request
General Fund Appropriations2 $1,999,927,000 $2,062,101,000 $2,433,971,000
Tuition Fee and Other Fee Revenue (net)3 $1,948,141,000 $2,013,466,000 $2,083,366,000
Rollback to 2011/12 Tuition Fee Rates (net)   (129,388,000) (131,748,000)
General Fund, AB 1502 - Replace Revenue from Fee Rollback 0 0 125,000,000
Reimbursements 2,975,000 1,000 1,000
Totals $3,951,043,000 $3,946,180,000 $4,510,590,000
Enrollment Growth, Programs, and Operations $371,366,000
Center for California Studies4 504,000
Total General Fund Increase $371,870,000
Change in Enrollment Patterns (11,066,000)
5 Percent Enrollment Growth 80,966,000
Net Tuition Fee Revenue Adjustments5 $69,900,000
Total Sources of Revenue $441,770,000

1The CSU 2012/13 Final Budget assumes passage of Proposition 30 in the November election. If Proposition 30 is not enacted, the 2012/2013 budget will be cut by $250M.

2The CSU 2012/13 GF Final Budget Act Appropriation was $2,010,652,000 and is adjusted to include the estimated 2012/13 employer-paid retirement adjustment of $51,449,000.

3Includes tuition fee revenue and other CSU Operating Fund fee revenue reduced by the total amount of tuition fee discounts from revenue forgone (reference the last table in this section) plus state funded institutional aid of $33.8M. These resources for institutional aid are reported in campus total revenue before discounts. The state funded $33.8M is reflected in the General Fund total.

4This number included within the 2013/14 Support Budget is an expenditure augmentation of $504,000 at the request of the Center for California Studies, which is a state-funded program administered through the CSU.

5This represents the change in enrollment patterns and enrollment growth revenue net of tuition fee discounts.

THREE-YEAR BUDGET SUMMARY BY PROGRAM
  2011/12
Actuals
Est. 2012/13
Final Budget1
2013/14
Request
Instruction $1,838,943,000 1,891,892,000 $1,891,892,000
Research 7,275,000 4,226,000 4,226,000
Public Service 10,057,000 8,508,000 8,508,000
Academic Support 483,600,000 476,485,000 476,485,000
Student Services 477,104,000 461,666,000 461,666,000
Institutional Support 568,818,000 573,067,000 573,067,000
Operation and Maintenance of Plant 532,415,000 506,039,000 506,039,000
Student Grants and Scholarships
(without Tuition Fee Discounts)2
29,856,000 24,296,000 24,296,000
Reimbursement 2,975,000 1,000 1,000
Provisions for Allocation 0 0 564,410,000
Gross Expenditures $3,951,043,000 $3,946,180,000 $4,510,590,000

1 The CSU 2012/13 Final Budget assumes passage of Proposition 30 in the November election. If Proposition 30 is not enacted, the 2012/2013 budget will be cut by $250M.

2 The state appropriates an additional $33.8 million for CSU institutional aid which is used to provide grants that cover tuition fees for students with need. The student aid provided by the state that funds student access is used for student instruction and is reflected as an expense in the Instruction program totals.


THREE-YEAR SUMMARY OF TUITION FEE DISCOUNTS AND TUITION FEE WAIVERS/REVENUE FORGONE
  2011/12
Actuals
2012/13
Budget
2013/14
Budget
Tuition Fee Discounts
(Forgone from Tuition Fees)1
$585,773,000 $598,229,000 $597,049,000
Tuition Fee Discount Adjustment from Enrollment Growth 0 0 23,967,000
Tuition Fee Waivers2 54,279,000 54,578,000 54,578,000
Total Tuition Fee Discounts and Waivers/Revenue Forgone $640,052,000 $652,807,000 $675,594,000

1 Tuition Fee Discounts cover tuition fees for eligible students with financial need. Amounts awarded reflect forgone tuition fee revenue for the CSU. There is an additional $33.8 million of state funded institutional aid funded by General Fund appropriation.

2 Includes the campus tuition fee waivers reported annually in Enrollment Reporting System Students (ERSS) database (Waiver Codes 01-08). Amounts awarded reflect forgone tuition fee revenue for the CSU.