California State University Board of Trustees Proposed
2014-15 Support Budget

AS-3149-13/FGA (Rev)

RESOLVED: That given limitations in state funding to the California State University (CSU), the Academic Senate of the California State University (ASCSU) support the CSU Board of Trustees (BOT) 2014-15 Proposed Support Budget (below); and be it further,

RESOLVED: That the ASCSU support the CSU BOT request for additional funds to hire tenure-line faculty to decrease bottlenecks, improve graduation rates, and provide advising that will further improve access and academic excellence in the CSU, and to make the goal of 75% tenure density in the CSU a reality under Assembly Concurrent Resolution (ACR) 73; and be it further,

RESOLVED: That the ASCSU distribute this resolution to CSU Board of Trustees, CSU Chancellor, California State Governor, CSU campus Presidents, CSU campus Senate Chairs, CSU Governmental Relations Office, CSU Emeriti and Retired Faculty Association, California State Student Association, and California Faculty Association.

RATIONALE: The CSU BOT 2014-15 support budget requests a $237.6 million augmentation to the CSU budget, which is more than what has been promised ($142.2 million) by the governor for 2014-15 in his multi-year plan (see below). Although both amounts fall short of the needs of the CSU system, especially after the budget of the last five years, the amount is reasonable considering the economic situation of the state, the key needs of the system, and what can be realistically expected from the state. The request balances revenues from both the state and proposed enrollment increases. The plan assumes no increase in tuition fee rates for the 2014-15 academic year.

The focus of the budget request is on increasing enrollment and student success efforts, such as graduation and completion rates, investment in maintenance and aging infrastructure, mandatory cost increases, and a modest increase in compensation of 3% to employees who received an increase of about 1% in 2013-14 after many years of stagnant salaries and furloughs in the face of rising costs of living. In contrast, many other state employees, including legislators, have been provided a 4-5% increase in compensation this year because of the improved economic condition of the state.

With the budget stabilizing, the ASCSU also believes that this is a time to begin investing in quality education and improve the tenure density in the CSU under ACR 73.

Excerpt from the CSU BOT agenda for the November 2013 meeting:

The State Constitution requires the submittal of the Governor’s budget proposal each year by January 10. The significant tax revenues produced by Proposition 30 and the ongoing economic recovery allowed the state to begin anew to invest in public higher education, including a $125.1 million programmatic funding increase for the CSU in the recently enacted 2013-14 budget.

The Governor’s Multi-year Funding Plan for the UC and CSU

Last January Governor Brown’s budget proposal included his call for a multiyear plan to provide funding stability to the University of California (UC) and the CSU. This plan, reiterated in the Department of Finance’s enacted budget summary reflecting the signed 2013-2014 Budget Act, calls for state funding increases to the two universities totaling $511 million each over the course of four years culminating with the 2016-2017 fiscal year. This recognizes the fact that both universities endured state funding reductions in equal dollar amounts during the recent half decade of fiscal crisis. The cumulative increase occurs in annual increments as follows:

• $125.1 million in 2013-2014
• $142.2 million in 2014-2015
• $119.5 million in 2015-2016
• $124.3 million in 2016-2017
• Cumulative increase in annual funding = $511.1 million

Although the legislature has not adopted this plan, it did approve the first-year increase of $125.1 million in 2013-2014.

Recommended 2014-2015 CSU Support Budget

In this agenda item we share with the Board a recommended support budget request for 2014-2015 for the university. The planning approach is tempered by recognition of the state’s ongoing fiscal challenges, yet represents a credible statement of the university’s key funding needs.

Expenditure Plan

The recommended expenditure plan, shown as increases to the CSU’s current baseline from state funds, tuition and other system-wide fees, is summarized below. These recommended items would require new ongoing revenues from the state of $237.6 million. This expenditure plan does exceed the minimum $142.2 million increase specified for 2014-2015 under the Governor’s multi-year plan. However, it is a statement of the university’s true funding needs and—given the possibility that 2014-2015 state revenues could grow substantially above current levels— presents worthy opportunities for the state to invest further in the students, faculty and staff of the CSU.

  • 5% Enrollment Demand (From tuition revenue
$84.6 million
  • 5% Enrollment Demand (from state)
$79.2 million
  • Augmentations for Student Success and Completion
$50.0 million
  • Financing maintenance and infrastructure needs
$15.0 million
  • Mandatory costs (health benefits, new space)
$13.7 million
  • Compensation increase (3 percent “pool”) 
$91.6 million
  • Center for California Studies—cost increases

$ 0.2 million

Total ongoing expenditure change $334.3 million

This expenditure plan would bring annual spending for support of the CSU to approximately $4.6 billion, including student fee revenues (net of financial aid). The enrollment demand item would accommodate not only growth in the number of students admitted and served, but would also help accommodate demand by current students for additional courses (allowing improved time-todegree). The costs of accommodating additional enrollment would be partially offset by the additional tuition fee revenue generated by the extra enrollment. This additional fee revenue – estimated at $84.6 million, net of financial aid – is factored into the budget plan. Thus, the amount needed from the state to fund the enrollment demand would be $79.2 million. This amount would enable campuses to enroll approximately 20,000 additional students (headcount), translating into a requested investment by the state in its economic and social future of less than $4,000 per student. It should be noted that this plan, summarized above, assumes no increase in tuition fee rates for the 2014-2015 academic year. The recommended expenditure plan includes a $50 million augmentation under the title of Student Success and Completion for a variety of efforts and strategies to close achievement gaps and facilitate student success and degree completion. These funds would be used in six initiative areas:

1. Tenure/track Faculty Hiring. $13 million for campuses to hire tenure-track faculty and begin reversing the declining ratio of tenured and tenure-track faculty to lecturers, as well as to improve student/faculty ratios. These funds would augment state funds and fee revenue related to enrollment growth to enable campuses to hire more than 500 full-time tenure-track faculty system-wide. More tenure-track faculty, added to current faculty numbers, mean more sections of high- demand courses taught and more faculty mentoring/advising of students.

2. Enhanced Advising. $8 million, with half the funds to hire 70 more professional staff advisors system-wide, and half the funds to leverage the work already underway with various e-advising technologies that provide clear and accurate “real time” information for students and advisors related to graduation and major requirements, and the efficient scheduling of classes.

3. Augment Bottlenecks Solution Initiative. $2.5 million to expand annual initiative to $12.5 million, a 25 percent increase over the current base. The added funding would support more online concurrent enrollment courses.

4. Student preparation. $8 million augmentation to help incoming freshmen attain college readiness before arriving on CSU campuses.

5. High-Impact Practices for Student Retention. $12 million to “scale up” a wide range of successful “high-impact” practices, including service learning projects, undergraduate participation in applied research, firstyear learning communities (a cohort or shared academic focus for groups of first-year students), and peer mentoring (upper division students mentoring lower division students).

6. Data-Driven Decision Making. $6.5 million to accelerate completion of the Data Dashboard project. Implementing “data dashboard” technologies on all campuses will dramatically improve implementation of various student success initiatives by providing the tools for quick assessments of the efficacy of different efforts.

The CSU’s backlog of facility maintenance and infrastructure needs, even if restricted to the highest priority needs, is massive and growing. State funding for capital outlay has reached critically low levels in recent years and constrained annual support budgets cannot keep up with maintenance needs. This preliminary plan would attack the problem by building up—with annual increments of $15 million over the three remaining years of the Governor’s multi-year plan—an ongoing “base” of $45 million available for annual debt service on bonds. This option would allow the CSU to finance an estimated $750 million to $800 million, depending on interest rates, of vitally needed work—addressing deferred maintenance priorities, but also upgrading and replacing basic infrastructure (such as campus electrical systems and water systems dating back more than a half century). Such a program could also address key needs in terms of technology infrastructure and instructional equipment replacement. A similar approach was approved by the legislature in the mid-1990’s, although on a smaller scale and focused solely on deferred maintenance. Each of the three annual increments would be associated with its own “round” of bond financing, with each round generating an estimated $250 million or more of bond proceeds to fund projects. Under this approach, the board, in each of the next three years, can review the annual increment as part of the annual budget before committing to a new round of bond financing.

When the support budget plan was reviewed at the September 24-25, 2013, board meeting, mandatory cost increases were estimated on a preliminary basis at $20 million. This estimate has been revised to $13.7 million, largely due to a recommendation to shift the budgeting of energy cost increases from a prospective basis to an in-arrears basis. This shift makes sense because energy prices are highly variable and exceedingly difficult to predict in advance of an upcoming fiscal year. An in-arrears approach on energy costs will result in a far more accurate matching of budget allocations with actual costs.

Revenue Plan

The following plan for increased revenue would provide the resources needed to meet the expenditure plan.

Total State General Fund Increase $237.6 million
Tuition Fees Revenue Adjustments:  
  • Net tuition fee revenue from enrollment growth
$84.6 million
  • Change in enrollment patterns
$12.1 million
Total Tuition Fee Revenue Increase $96.7 million
Total Revenue Increase $334.3 million

Each year the “mix” of students attending part-time or full-time, or attending at undergraduate or graduate levels, shifts slightly, in the process shifting fee revenue estimates as well. Based on most recent data, we estimate a revenue increase of $12.1 million due to this effect. Although slight (about 0.6 percent) in the context of annual system-wide fee revenues of close to $2 billion, this $12.1 million helps meet expenditure needs and reduce by a corresponding amount what is needed from the state. This recommended revenue plan strikes a balance in meeting the increased expenditure needs of the CSU between an amount that can be reasonably requested from the state and an amount that can be reasonably provided through tuition fee revenues generated by enrollment growth. Development of a 2014-2015 budget request on these lines would provide the governor and legislature with an achievable plan for investment in the CSU for the sake of California’s economic and social future. The plan is capable of reprioritization if, ultimately, the university must budget within the minimum $142.2 million funding increase specified for 2014-2015 under the Governor’s multi-year plan. At this stage, however, the recommended budget focuses on stating needs and being positioned for opportunity.

ACR 73 -



Approved Unanimously – November 1, 2013





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