Sources of Revenue | 2016/17 CSU Support Budget Executive Summary | Budget | CSU
2016/17 Executive Summary

Sources of Revenue

The 2016/17 California State University Support Budget plan includes a $241.7 million increase to the CSU’s current $2.99 billion General Fund.The 2016/17 California State University Support Budget plan includes a $241.7 million increase to the CSU’s current $3.0 billion General Fund base budget for a total of almost $3.3 billion, including debt service. The requested $241.7 million General Fund increase for the 2016/17 budget will fund various mandatory costs increases, 2 percent employee compensation pool increase, 3 percent enrollment growth, student success and completion initiatives, and facilities and infrastructure needs.

The proposed 2016/17 budget plan also reflects tuition revenue from the proposed state-supported 3 percent resident student enrollment growth [10,700 full-time equivalent students (FTES)]. The net growth in tuition revenue after adjusting for foregone revenue associated with financial aid is $55.9 million.

The total 2016/17 support budget plan increase is $297.6 million.

State General Fund Increase $241,665,000
Net Tuition Revenue Adjustments $55,907,000
TOTAL $297,572,000

3 Percent Funded Enrollment (top)

The 2016/17 budget plan supports a 3 percent increase in resident student enrollment to continue offering the opportunity of a CSU education to the thousands of California high school graduates and community college transfer students who apply to the CSU each year.

Many CSU campuses continue to experience record levels of applications and enrollments. The CSU had to turn away more than 30,000 eligible undergraduate applicants in fall 2014, even with a year-over-year funding increase that allowed the CSU to grow by an estimated 9,800 students. Demand for the CSU has grown and remains high, with more than 825,000 undergraduate applications for admission for the fall 2015 term (compared to 760,000 applicants for fall 2014). Funding restrictions and prospective student demand have constrained the ability of the CSU to admit all eligible applicants as shown in the chart below.

Eligible Undergraduate Applicants—California Residents

Eligible Undergraduate Applicants - California Residents

ELIGIBLE UNDERGRADUATE APPLICANTS - CALIFORNIA RESIDENTS
  Fall 2010 Fall 2011 Fall 2012 Fall 2013 Fall 2014
Admitted 173,562 178,615 194,564 212,152 212,538
Not Admitted 28,803 21,697 22,123 26,430 30,665

Increasing enrollment by 3 percent from the current state-supported level of 356,450 California resident Full-Time Equivalent Students (FTES) to a new level of 367,150 is attainable, assuming adequate resources from the state. Three percent growth in 2015/16 was a meaningful step in the restoration of access to a high quality baccalaureate and graduate education at the CSU. It continues to be a solid investment by the state for the sake of California’s further economic recovery and workforce development to provide new funding for increased access. Simply on the basis of application demand and eligibility, an increase in state-supported enrollment of more than 3 percent would be justified. However, due to the lead times and operational complexities of implementing enrollment growth at the campuses, this plan is limited to 3 percent for the 2016/17 fiscal year.

Based on the state-approved marginal cost methodology, the 2016/17 estimated net marginal cost rate, after foregone financial aid, has been calculated at $10,285 per FTES. This amount multiplied by 10,700 FTES (3 percent) equals an estimated cost of $110.0 million for new enrollment. The General Fund portion of marginal cost is $7,673 per FTES, which equates to $82.1 million funded from the state General Fund. The remainder would be offset by the estimated tuition revenue (net of financial aid) generated by additional enrollment. The 10,700 FTES translates into more than 12,600 additional students.

Tuition Revenue (top)

A 3 percent increase in resident enrollment (10,700 FTES) is projected to generate $55.9 million in new tuition revenue, after adjusting for foregone revenue associated with students receiving State University Grant awards. Tuition rates have been held flat since 2011/12 and again are not scheduled to increase in 2016/17.