2016/17 Executive Summary

Three-Year Budget Summary

The tables on the following pages provide background data on the CSU’s operating budget for the current and prior fiscal years and summarize the CSU’s 2016/17 budget plan. The plan focuses on the CSU’s mission to educate Californians under the state’s higher education master plan and seeks ongoing reinvestment by the state in the CSU. The planning approach is tempered by recognition of the state’s finite resources, yet represents a credible statement of the CSU’s key funding needs for the upcoming fiscal year.

The 2016/17 budget plan increase of $297.6 million would bring the CSU’s annual support budget to $5.5 billion, with approximately $2.2 billion from tuition and other fee revenues (net of $0.7 billion foregone revenue for financial aid), and a state appropriation of $3.3 billion. As shown in the summary on the next page, it is estimated that additional tuition revenues generated by enrollment growth will total $55.9 million. This revenue, combined with a requested increase of state General Fund of $241.7 million, would provide the needed ongoing revenues for the proposed increase in critical expenditure priorities. Specific justifications for the planned spending increases are provided following the summary displays.

For the CSU to fully meet the expectations placed upon it by the higher education master plan, a much larger budget request could be justified. This budget plan, however, strikes a balance between an amount that can be reasonably requested from the state and an amount that can be reasonably provided through tuition revenues generated by enrollment growth in order to address the growing demand for a CSU education and the increased spending to support that growth. Development of a 2016/17 budget plan that builds on the success achieved in recent years provides the governor and legislature an achievable plan to continue investing in the CSU for the sake of California’s economic and social future.

THREE-YEAR BUDGET SUMMARY
Table 1: Support Budget 2014/15
Actuals
2015/16
Final Budget1
2016/17
Plan
General Fund $2,464,241,000 $2,667,021,000 $2,883,686,000
Net Tuition and Other Fee Revenue2 2,258,728,000 2,145,812,000 2,201,719,000
TOTAL SUPPORT BUDGET $4,722,969,000 $4,812,833,000 $5,085,405,000

Table 2: Facilities and Infrastructure Needs 2014/15
Actuals
2015/16
Final Budget1
2016/17
Plan
General Fund Debt Service
Payments on Existing Facilities3
$287,777,000 $303,944,000 $311,809,000
Budget Plan: Facilities and Infrastructure Needs $10,000,000 $35,000,000 $60,000,000
TOTAL FACILITIES AND INFRASTRUCTURE NEEDS $297,777,000 $338,944,000 $371,809,000
Total Support Budget General Fund Increase
Enrollment, Programs, and Operations (Support Budget)
$216,665,000
Net Tuition Revenue Adjustment4 $55,907,000
Facilities and Infrastructure Needs Increase $25,000,000
TOTAL SOURCES OF REVENUE $297,572,000

Table 3: Sum of Tables 1 & 2 2014/15
Actuals
2015/16
Final Budget1
2016/17
Plan
Total Support Budget $4,722,969,000 $4,812,833,000 $5,085,405,000
Total Facilities and Infrastructure Needs 297,777,000 338,944,000 371,809,000
GRAND TOTALS $5,020,746,000 $5,151,777,000 $5,457,214,000

1 The CSU 2015/16 GF Final Budget Act Appropriation (support budget) was $2,987,063,000, inclusive of $338,944,000 for facilities and infrastructure. Additionally, the state-funded 2015/16 employer-paid retirement adjustment of $18,902,000 is added to the GF support budget total.

2 Includes tuition and other fee revenue reduced by revenue foregone from State University Grant awards. (reference table 4).

3 Total 2014/15 actual GF appropriation for debt service was $296,316,000 versus expenditure of $287,777,000 resulting in an $8,539,000 carry forward balance. Beginning in 2014/15, state lease revenue bond and general obligation (GO) bond debt service attributable to CSU facilities were included in the CSU main appropriation. In 2016/17, the lease revenue bond debt service increases $7.9 million to a total of $114.6 million. There is no change in the GO bond debt service amount of $197.2 million.

4 This represents revenue to be collected from an increase in funded enrollment net of financial aid.

THREE-YEAR SUMMARY OF STATE UNIVERSITY GRANTS (SUGs) AND TUITION WAIVERS/REVENUE FOREGONE
Table 4 2014/15
Actuals
2015/16
Final Budget
1
2016/17
Plan
SUG Awards
(Foregone Tuition Revenue)1
$646,055,000 $655,961,000 $655,961,000
SUG Adjustment from Increase in Funded Enrollment 0 0 11,706,000
Tuition Waivers2 67,590,000 67,590,000 67,590,000
TOTAL SUG AWARDS AND WAIVERS/REVENUE FOREGONE $713,645,000 $723,551,000 $735,257,000

1 SUG Awards cover tuition for eligible students with financial need. Amounts awarded reflect foregone tuition revenue for the CSU.

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

THREE-YEAR BUDGET SUMMARY BY PROGRAM
Table 5 2014/15
Actuals
2015/16
Final Budget
1
2016/17
Plan
Instruction $2,189,079,000 $2,303,801,000 $2,303,801,000
Research 10,939,000 10,778,000 10,778,000
Public Service 11,653,000 11,226,000 11,226,000
Academic Support 594,322,000 601,377,000 601,377,000
Student Services 584,147,000 570,847,000 570,847,000
Institutional Support 706,310,000 731,235,000 731,235,000
Operation and Maintenance of Plant1 886,527,000 884,590,000 892,455,000
Student Grants and Scholarships
(without SUG Awards)2
37,769,000 37,923,000 37,923,000
Provisions for Allocation 0 0 297,572,000
GROSS EXPENDITURES $5,020,746,000 $5,151,777,000 $5,457,214,000

1 2016/17 operations and maintenance of plant includes a $7.9 million state increase in lease revenue bond debt service.

2 Amount is reduced by the SUG awards (revenue foregone) as shown in table 4.