Budgets in the CSU. CSU 101 Budget February 2012 Pismo Beach. Debbie Brothwell Deputy Vice President, Finance CSU East Bay

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1 Budgets in the CSU CSU 101 Budget February 2012 Pismo Beach Debbie Brothwell Deputy Vice President, Finance CSU East Bay

2 Overview How is the CSU Funded? Overview of the CSU Budget Process State of California Chancellor s Office Campus Overview of CSU s Funding Model based on Enrollment Review Budget

3 CSU Trustees Fee Policy CSU Trustees Fee Policy Enunciated by the Board in 1993 document Quality and Affordability. Reaffirmed and elaborated upon by the Board in May Primary responsibility for funding the educational mission and operations of the university, including supporting enrollments, rests with the State. 3

4 The Master Plan for Higher Education of California 3. Reaffirmation of California's long-time commitment to the principle of tuition-free education to residents of the state. However, the 1960 Master Plan did establish the principle that students should pay fees for auxiliary costs like dormitories and recreational facilities. Because of budgetary reductions, fees have been increased and used for instruction at UC and CSU in recent years, but fee increases have been accompanied by substantial increases in student financial aid.

5 Per $1.00 Sharing the cost of education in the CSU $1.00 $0.20 $0.80 $0.42 $0.60 $0.80 $0.40 $0.58 $0.20 $ State Student

6 Declining State Support Forces More Reliance on Student Fees (in 2011 Constant Dollars) $14,000 Tuition Fees and Other Fees less Financial Aid State Funds $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $

7 State Appropriations equal levels, but Enrollment has increased by 58,000 FTES FTES $ in Billions 357,223 $ , ,394 $ ,716 $ , ,396 $ ,190 $3.25 $ ,000 $2.79 $2.79 $ ,000 $2.61 $2.50 $2.16 $2.35 $ , ,928 $2.14 $2.00 $ , Full Time Equivalent Students (FTES) 7 CSU State Allocation (in billions) $1.50

8 CSU State Support versus Higher Education Compact Funding Agreement $ in Billions $4.50 $4.00 Projected General Fund Appropriations under previous Higher Education Compact Agreement $3.83 $3.59 $3.50 $3.35 $3.00 $2.50 $2.47 $2.61 $2.68 $2.49 $2.62 $2.79 $2.97 $3.12 $2.87 $2.79 $1.7 Billion Gap $2.16 $2.25 $2.45 $2.35 $2.00 State General Fund Allocations $2.14 $

9 Tuition Fee Increases Have NOT Made Up for General Fund Losses Note: General Fund does not reflect potential $100 million trigger cut. 9

10 CSU Takes One-Third of Tuition Fee Increases for State University Grants to Needy Students SUG Awards Now Come to Over $600,000,000 10

11 CSU Fees Remain Below Comparison Institutions Note: CPEC Comparison Institutions 11

12 Greater Efficiency? CSU Already Among the Most Efficient 12

13 California s Revenues Insurance Tax 2.20% Motor Vehicle Fees 0.21% Liquor Tax.36% Tobacco Tax.10% Other 2.64% Corporation Tax 12.23% Sales Tax 26.81% Personal Income Tax 55.46%

14 California s Expenses Labor & Workforce, 0.49% Higher Education, 11.60% General Government, 2.26% Legislative, 2.96% State & Consumer Services, 0.71% Transportation & Housing 0.82% Natural Resources, 2.44% Environmental Protection, 0.07% Health & Human Services, 25.03% K-12 Education, 42.80% Corrections & Rehabilitation, 10.83%

15 Higher Education Student Aid Commission, 6% Universtiy of California, 27% Community Colleges, 42% California State University, 25%

16 CSU vs the State of California Higher Education 11.6% Student Aid Commission 6% University of California 27% Community Colleges 42% CSU 27% CSU is 27% of Higher Ed and 3% of the State of California

17 Our State Share If you hear the State of California has a $9B problem: Higher Ed 11.6% X $9B = $1B CSU 27% X $1B = $282M The allocation of the current problem is never prorated like this, but it does give you an idea of the potential impact to the CSU Budget Reduction Trigger to the CSU is $200M

18 What is your campus share? If you hear the CSU has a $200M problem: What is your campus share?

19 What is your campus share? Campus General Fund Allocation State University Fee Revenue Nonresident Tuition Revenue Unadjusted Other Fee Revenue 2009/10 Gross Budget Allocation % of Total Budget Allocation % of General Fund Allocation Bakersfield $49,859,822 $29,867,000 $705,000 $2,283,000 $82,714, % 2.13% Channel Islands 38,120,853 12,550,000 6,600 1,143,000 51,820, % 1.63% Chico 90,188,102 60,176,000 3,441,000 4,988, ,793, % 3.86% Dominguez Hills 61,273,282 45,241, ,300 2,363, ,631, % 2.62% East Bay 67,857,621 57,544,000 8,094,400 4,219, ,715, % 2.90% Fresno 118,055,402 82,780,000 6,037,100 5,082, ,954, % 5.05% Fullerton 136,371, ,652,000 9,089,900 12,668, ,781, % 5.83% Humboldt 62,436,110 28,824,000 1,650,500 3,533,000 96,443, % 2.67% Long Beach 154,573, ,318,000 13,305,300 11,111, ,307, % 6.61% Los Angeles 103,587,079 84,868,000 5,807,200 5,314, ,576, % 4.43% Maritime Academy 16,472,011 2,814, ,600 2,625,000 22,622, % 0.70% Monterey Bay 46,061,803 14,692, ,500 1,510,000 62,757, % 1.97% Northridge 148,718, ,645,000 14,067,800 9,541, ,972, % 6.36% Pomona 110,101,122 82,585,000 6,621,100 3,929, ,236, % 4.71% Sacramento 126,087, ,595,000 3,650,800 8,751, ,084, % 5.39% San Bernardino 83,133,458 68,458,000 3,702,700 5,087, ,381, % 3.56% San Diego 166,107, ,265,000 14,866,200 12,651, ,889, % 7.10% San Francisco 128,676, ,792,000 16,489,700 14,452, ,409, % 5.50% San Jose 125,111, ,660,000 13,702,500 9,188, ,661, % 5.35% San Luis Obispo 110,289,288 73,979,000 5,703,800 21,520, ,492, % 4.72% San Marcos 53,536,642 33,333, ,100 3,436,000 91,218, % 2.29% Sonoma 51,085,673 31,849,000 1,028,600 2,685,000 86,648, % 2.19% Stanislaus 51,346,837 31,639, ,000 3,582,000 87,067, % 2.20% Campus Total $2,099,050,790 $1,615,126,000 $131,342,700 $151,661,000 $3,997,180, % 89.78% Chancellor's Office 67,011, ,011, % 2.87% CalStateTeach 1,244, , ,123, % 0.05% International Programs 2,476,496 2,324, ,800, % 0.11% Summer Arts 98,800 (40,000) , % 0.00% Systemwide Provisions 168,069, ,126, ,195, % 7.19% CSU System Total $2,337,951,649 $1,618,289,000 $131,342,700 $153,787,000 $4,241,370, % %

20 Campus share Sample CSU Campus Estimated Reductions: 3.2% = $9M 3.2% of $200M = $9M 4.7% of $200M = $13.2M 7.1% of $200M = $20M CSU Maritime total budget is $22.6M

21 Total Operating Expenditures (including financial aid) Financial Aid 11% Equipment, Supplies, Utilities, etc. 14% Salaries and Benefits 75% Note: Operating Expenditures exclude lease-revenue bond payments. Source: CSU FIRMS Reported Actuals

22 Total Operating Expenditures Executive Salaries 0.2% Equipment, Supplies, Utilities, etc. 15.9% Academic Salaries 30.4% Benefits 23.3% Staff Salaries 30.3% Note: Operating Expenditures exclude financial aid and lease-revenue bond payments. Source: CSU FIRMS Reported Actuals

23 The Budget Process

24 CSU Support Budget Cycle Budget Calendar Exec Council Review Budget Advisory Com. Review Statement of Priorities Trustees Approve Budget Governor's Budget Issued Legislative Analyst Analysis Preliminary Campus Allocations Legislative Hearings & May Revise Budget Signed Jun Aug Sep Nov Jan Feb Apr May Jun

25 CSU Support Budget Request

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28 CSU Support Budget Cycle Budget Calendar Exec Council Review Budget Advisory Com. Review Statement of Priorities Trustees Approve Budget Governor's Budget Issued Legislative Analyst Analysis Preliminary Campus Allocations Legislative Hearings & May Revise Budget Signed Jun Aug Sep Nov Jan Feb Apr May Jun

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30 Governor s Budget

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32 Student Faculty Ratio Student Faculty Ratio CSU is working harder.. % Change Campuses Variance Channel Islands % Monterey Bay % Maritime Academy % San Marcos % Humboldt % Dominguez Hills % Bakersfield % San Luis Obispo % San Bernardino % San Jose % Chico % Sonoma % Stanislaus % Sacramento % Fresno % Pomona % San Francisco % Northridge % Fullerton % Los Angeles % East Bay % Long Beach % San Diego % Systemwide Average

33 CSU Support Budget Cycle Budget Calendar Exec Council Review Budget Advisory Com. Review Statement of Priorities Trustees Approve Budget Governor's Budget Issued Legislative Analyst Analysis Preliminary Campus Allocations Legislative Hearings & May Revise Budget Signed Jun Aug Sep Nov Jan Feb Apr May Jun

34 Budget Cycle

35 Enterprise Budgets Other CSU Funds Campus specific budget process Housing Parking Continuing Education Instructionally Related Activities Lottery Misc Trust

36 Main Operating Fund General Fund/Student Fee Revenue CSU Operating Fund The primary purpose of the CSU Operating Fund is to record revenues and expenditures for statesupported instruction. Used to record state tax revenue and student fees. The state tax revenue portion, which is annually allocated by the California Legislature to the CSU, is the main source of funds for the University operating budget. A secondary source of funds is student fees such as the CSU State University Fee, Non-Resident Tuition, Application Fee, Health Services fee, and other fees.

37 IRA (Instructionally Related Activities) Use of Funds Funding source are fees collected for the mandatory IRA Fee and or revenue generated by the IRA program itself IRA funds are to be used solely for the support of instructionally related activities as defined in Section of the Education Code and by CSU System-wide policy. As a general rule, expenditure of IRA funds follows the same principles and guidelines as required of CSU Operating Fund monies. Exception: Different Guidelines under Hospitality Policy If capital equipment is purchased whose use will not be restricted to IRA programs/activities, IRA funds may be employed only in proportion to the anticipated IRA use. Expenditure for awards that are the culmination of a group(s) or individual(s) efforts through competition or as a normal part of program activities will be allowed. Awards will normally be in the form of trophies, plaques, ribbons, and other similar items, the value of which is primarily intangible and limited to the recipient(s). Departments are allocated IRA Funds by an annual cash transfer

38 Lottery Education Fund Funding source Cash generated from the sale of California State Lottery tickets, a portion of which is allocated to CSU campuses Departments are allocated Lottery Funds by an annual budget allocation

39 Lottery Guidelines

40 Housing Funding Source Revenues are generated from license fees paid by dormitory residents and must be used exclusively for the self-supporting housing program

41 Parking Funding Source Parking revenue is generated from the sale of parking permits and fines paid for citations issued. Parking permit revenue must be used to maintain parking lots and parking staff Citation income must be used for administration of citations and alternate transportation.

42 Continuing Education Revenue Fund (CERF) Funding Source These sources are generated by student fees for enrollment in Continuing Education courses. Funds must be used for self-supporting instruction in the Continuing Education program.

43 Campus Union Funding Source Revenues are generated from the mandatory University Union fee. Exclusively for the self-supporting Campus University Union facilities and related programs.

44 Capital Outlay Funding Source There are two sources of funds for CSU capital outlay programs state tax revenues appropriated by the state legislature the proceeds from the sale of bonds. funding is allocated to the University as either Minor Capital Outlay (projects of $400,000 or less) Major Capital Outlay (projects greater than $400,000). The funding must be used for the construction projects specified.

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