Required Operational Costs (or mandatory costs) are expenditures the university must pay regardless of the level of funding allocated by the state, and they often increase despite the level of state support. The 2023-24 operating budget request includes $42.8 million for increases due to inflation on nonpersonnel expenditures, maintenance of new facilities, and liability and property insurance premiums.
| Maintenance of New Facilities | $6,032,000
|
Liability and Property Insurance Premium Increases
| 13,700,000 |
| Inflation on Nonpersonnel Costs | 23,034,000 |
|
TOTAL |
$42,766,000 |
Maintenance of New Facilities
The CSU is scheduled to open 284,405 square feet of new facilities in 2023-24. The cost to fund regular maintenance of these facilities is $21.21 per square foot, for a total of $6 million in 2023-24. Regular maintenance of new facilities includes the cost of utilities, building maintenance, custodial, landscape, and administrative support.
Additional Information – Campus Detail
Liability and Property Insurance Premium Increases
The CSU requests $13.7 million, equivalent to a 14 percent increase in costs related to property and liability coverage. The insurance markets for property and liability coverage are emerging from nearly a decade of low premiums. Insurance premiums are on the rise across the country and more so for California public entities. There are many factors causing this significant rise in premiums in California, with major factors being an overall rise in claims and inflated values of settlements and verdicts. California higher education faces some of the toughest challenges in the liability insurance market due to higher physical abuse and molestation, law enforcement, and employment practice exposures. Additionally, sizable liability settlements at other higher education institutions are resonating throughout the insurance industry. Wildfire losses are also a factor; the CSU has experienced multiple losses, and these contribute to property insurance premium increases.
Inflation on Non-Personnel Costs
Inflation impacts all areas of the university. Over the past decade, the CSU operating budget request and the final state budget have not included funding explicitly dedicated to cost increases on a variety of expenses, such as technology, instructional equipment, library subscriptions, software subscriptions, contracts, and other supplies. Utilizing the California Consumer Price Index of three percent for 2023-24, the CSU requests $23 million for expenditure increases due to inflation.