1998-1999 Support Book 2 Documentation
The higher education funding compact, initiated by the Governor in 1995/96, supports one percent average annual growth in enrollment. This support has been critical to recovery from the student enrollment decline that occurred during in the early 1990's. When first established, the compact's one percent enrollment commitment was a reasonable expectation given the uncertainty of state's financial recovery and other factors - such as the 1994 Northridge earthquake - affecting CSU enrollment. However, enrollment demand has surpassed the one percent growth commitment in each of the compact years.
The chart below shows that for each year of compact financing, actual enrollment increases have been higher than the one percent growth commitment. In fiscal year 1996/97, the CSU served approximately 7,000 full-time equivalent students (FTES) over the compact enrollment target. Preliminary projections for fiscal year 1997/98 suggest enrollment may exceed the compact enrollment target by as many as 8,400 FTES.
Budgeted Enrollment vs Actual Full Time Students Enrolled
One-time funding allocations, fee revenue from additional students, campus productivity measures, and adjustments in the delivery of instruction and teaching services have been used as temporary measures to support excess enrollment. However, these measures place a financial strain on other obligations required to maintain the quality of CSU educational services and cannot be a permanent solution for unrestricted access.
As CSU enters the fourth and final year of the compact, campus enrollment experience and state enrollment projections require that the compact be adjusted to correct the underestimation of enrollment growth and fund fully current demand for access. It is possible to achieve 4 percent enrollment growth in 1998/99, which would require $52.8 million in General Fund support. Current compact funding will provide $13.2 million of this amount for one percent growth of 2,580 FTES. CSU is requesting $39.6 million in support for an additional 7,740 FTES, which would bring the total enrollment increase for 1998/99 to 10,320 FTES. With this additional General Fund support, CSU can continue to employ one-time cost-savings and funding redirections to ensure access above funded levels for all who are qualified to enroll. Campuses have estimated enrollments could exceed 270,000 FTES in 1998/99.
|FTES Increase||General Fund
|Under the Compact (1% Growth)||2,580||$12,268,000|
|Additional 3% Growth||7,740||$39,559,000|
|Total Enrollment Request (4% Growth)||10,320|
|* Does not include fee revenue|
The additional funding request for enrollment is based on marginal cost of instruction per FTES of $6,389. State funding support for enrollment growth is calculated by subtracting the fee revenue component, 20 percent of total marginal cost. One-third of the $1,278 fee revenue component will be used to increase funding available for State University Grants. CSU budgets enrollment funding at $5,963 per FTES for direct costs and $426 per FTES through the State University Grant program.
The marginal cost of instruction is the methodology used to calculate the cost for instructing one new full-time student after adjusting for campus "economies of scale." It is primarily driven by average costs per FTES included in the instruction, academic support, student services, and institutional support budget programs that are discounted by percentages calculated for fixed costs. The marginal cost methodology also recognizes the need for instructional equipment (based on annual depreciation used to determine replacement costs) but it excludes financial aid and physical plant operations from the calculation.