Governor’s Budget Honors Higher Education Compact, Protects Students from Fee Increases, Provides for Enrollment Growth and Compensation
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(June 30, 2006) —Governor Arnold Schwarzenegger has signed a new state budget which provides $226 million in new revenue for the California State University, fully funding the trustees’ budget request for 2006-07, and providing enough funds to eliminate student fee increases scheduled for fall 2006.
The proposed budget provides nearly $2.8 billion in state General Fund revenue to the CSU, which represents a 7.8 percent increase over the current 2005-06 budget year appropriations. Included in this amount is $54.4 million above the state’s General Fund commitment under the Higher Education Compact to eliminate a proposed fee increase of 8 percent for undergraduate and 10 percent for graduate students.
“The budget the governor signed is good for the students, their families, and the CSU,” said California State University Chancellor Charles B. Reed. “The elimination of the fee increase provides financial relief to middle class students, affording them more time to study and less time working to pay for the additional fee increase.
“This budget underlines the governor’s commitment to offer more students an opportunity to achieve a college degree and to meet the demand for an educated workforce that can only strengthen California’s future,” Reed said.
As agreed in the compact, the budget provides a 3 percent general fund increase $75.8 million for general operations.
The budget provides CSU with $61.3 million for a 2.5 percent enrollment increase. This increase will open university doors for an additional 8,490 full-time-equivalent students -- more than 11,000 headcount.
The 2.5 percent increase in enrollment is projected to generate $26 million in revenue. The budget provides a permanent outreach funding appropriation of $7 million and also provides nearly $2.4 million to support nursing education and $1.1 million for teacher training in math and science.
“The CSU was subject to three years of budget reductions that resulted in a loss of more than $500 million to the university,” said Richard West, CSU executive vice chancellor and chief financial officer. “This budget recognizes and begins to address some critical funding issues faced by our campuses, as well as the impact of those budget reductions on students, faculty, and the delivery of education in the classroom.”
“These funding priorities are consistent with the trustee’s budget recommendations,” said CSU Board Chair, Roberta Achtenberg. “Funding for nursing programs and for K-12 teachers of math and science is critical to address certain specialties where California has prevalent shortages of qualified professionals.”
Uses of Revenue
The CSU will use $70.1 million to fund costs of direct instruction, academic support and student services associated with enrollment growth. In 2006-07 the CSU will have approximately 348,262 FTES (approximately 435,400 headcount).
The CSU plans to use $77.4 million of the Higher Education Compact to fund a 3 percent compensation pool for all employees. In addition, in 2006-07 the CSU will initiate a five-year strategic plan to begin reducing significant salary lags for all CSU employees. The CSU’s 2006-07 budget plan includes $16.6 million for the first year of the plan. Combined, they represent an overall compensation increase pool in 2006-07 of 3.64 percent. With respect to the compensation for represented employees, the amount of such compensation is not predetermined, but shall be subject to collective bargaining. This applies both to the 3 percent compensation pool as well as increases to reduce salary lags.
The budget plan also allocates $33.6 million for mandatory costs -- expenditures the university must pay regardless of its financial condition -- including health benefits, new space, energy, and service-based salary increases. It also allocates $10 million to fund long-term needs in technology, libraries, deferred maintenance and instructional equipment.
The newly approved budget increases allow California resident students entering the CSU to avoid expected fee increases. Instead, they will pay state university fees at current year levels: $2,520 for undergraduates, $2,922 for teaching credential students, and $3,102 for graduate students. (In addition to the state university fee, students pay an average of $644 in campus fees.)
The California State University is the largest system of senior higher education in the country, with 23 campuses, 405,000 students and 44,000 faculty and staff. Since the system was created in 1961, it has awarded about 2 million degrees, about 84,000 annually. The CSU is renowned for the quality of its teaching and for the job-ready graduates it produces. Its mission is to provide high-quality, affordable education to meet the ever-changing needs of the people of California. With its commitment to excellence, diversity and innovation, the CSU is the university system that is working for California. See www.calstate.edu.
Last Updated: June 30, 2006