Transcript Funding the CSU A Tale of Two Budgets Rodney Rideau, Director of the Budget, Chancellor’s Office Debbie Brothwell, Deputy Vice President – Finance,

Funding the CSU
A Tale of Two Budgets
Rodney Rideau, Director of the Budget, Chancellor’s Office
Debbie Brothwell, Deputy Vice President – Finance, CSU East Bay
Overview
How is the CSU Funded?
Where Funding Is Used
How the System Blew Up
Where CSU Fits in the Universe
Budget Cuts – Do You Know Your Share?
Student Fees and Financial Aid
CSU Budget Cycle
CSU FUNDS
Slide 2
How CSU Is Funded
CSU Receives Two Budget Allocations from the State
– General Fund
– Lottery Revenues
CSU Uses One Source of Student Revenue (except when it
doesn’t) to Address BOT Budget Priorities
– Incremental Increase in Student Tuition Fees
Campuses Use All Other Student Fees and Income
– Application Fees, Nonresident Tuition, Miscellaneous Course
fees, Student Excellence Fees, Health Services Fees, Academic
Program Fees
– CERF, Parking, Housing
– Interest Earnings, Grants, Administrative Overhead
Slide 3
How Campuses Are Funded
 Campuses receive three General Fund allocations
 Operating budget (e.g., enrollment, mandatory costs, compensation)
 State University Grants
 Lottery
 Campuses must raise projected budget plan fee
revenue increase(s) or cut operating expenses,
redirect operating budgets or do both
 CO can use any operating revenue in the allocation
process
 CO can use CERF in the allocation process
 Campuses must reimburse State for lost Tuition Fee
Interest Earnings
Slide 4
System Perspective
In 1992,Budget Redesign was born.
 State ends the “needs-based,” formula-driven
methodology used for annual changes in State General
Fund appropriations to CSU
 CSU adopts a “revenue-focused” budget framework to
develop annual budget request for a reasonable
expectation of General Fund growth
 CSU establishes “gross budget” methodology to
equitably distribute annual State General Fund change.
 Budget Plan Recognizes Increase in Tuition Revenue
but all Tuition Revenue remains at the campus
Slide 5
Campus Perspective
In 1992, Budget Redesign begins new era of budgeting.
 Campuses receive increased flexibility for budgeting
expenditures. Campus responsibility for managing
enrollments and fee revenue increases.
 General Fund allocations vary by campus
 All mandatory Tuition Revenue remains at the campus
but increased revenue used in BOT systemwide budget
plan.
 Campus expenditure allocations based on past year
budget performance, two years behind budget year costs
Slide 6
The Budget Process
Where is Funding Used?
THE BUDGET PROCESS
Slide 7
2012-13 Support Budget
CSU Request
Slide 8
2012-13 Budget Plan
Slide 9
CSU Budget Priorities
Slide 10
Campus Budget Allocations
ATTACHMENT C - 2007/08 Budget Plan Expenditure Increases
Mandatory Costs
Full-Year SSI
Compensation
Health
Bakersfield
Channel Islands
Chico
Dominguez Hills
East Bay
Fresno
Fullerton
$624,000
318,000
1,373,000
759,000
947,000
1,455,000
1,894,000
$76,000
36,000
166,000
102,000
138,000
193,000
259,000
Energy
$78,000
34,000
185,000
91,000
138,000
195,000
259,000
Total New Space
Maint. Need @
$8.84 sq. ft.
$508,000
1,218,000
0
47,000
0
813,000
0
Enrollment
Compact
Funding
Marginal Cost
Funding
($425/FTESdistributed)
$308,000
740,000
0
29,000
0
494,000
0
$200,000
478,000
0
18,000
0
319,000
0
General FundMarg. Cost
Fee RevenueMarg. Cost BSN 340 FTES
Growth
($7,710/FTES less ($2,257/FTES less
$425-new space)
$1,355,000
1,377,000
1,617,000
0
0
3,460,000
9,492,000
$745-SUG)
$281,000
286,000
336,000
0
0
718,000
1,970,000
$160,000
778,000
160,000
0
0
271,000
551,000
Campus allocations are designed to determine General Fund need.
ATTACHMENT C - 2007/08 Budget Plan Expenditure Increases
Financial Aid
Compensation
Marginal Cost
Fee Increase
SUG Set-Aside 33% SUG Set- SUG Need
@ $745/FTES
Aside
Bakersfield
Channel Islands
Chico
Dominguez Hills
East Bay
Fresno
Fullerton
($139,000)
(141,000)
(165,000)
0
0
(354,000)
(971,000)
($611,000)
(234,000)
(1,292,000)
(921,000)
(992,000)
(1,660,000)
(2,615,000)
$742,800
175,400
956,000
1,152,300
790,400
2,042,700
3,551,400
3% distributed
$1,745,000
924,000
3,541,000
2,212,000
2,949,000
4,312,000
5,578,000
Salary Lag
Funding
$960,000
516,000
1,939,000
1,260,000
1,504,000
2,237,000
3,076,000
Long Term
General Fund Budget Plan Adjustment
Need
Deferred Maint.
Gross Budget Budget Plan
2007/08
(distrib.), Acad.
Plan
Fee Income
General Fund
Tech. &
Adjustments
Offset
Increase
Libraries (SWP)
$44,000
19,000
105,000
52,000
79,000
111,000
147,000
$5,823,800
5,306,400
8,921,000
4,754,300
5,553,400
13,793,700
23,191,400
($1,211,000)
(938,000)
(3,274,000)
(1,935,000)
(1,740,000)
(5,399,000)
(10,890,000)
$4,612,800
4,368,400
5,647,000
2,819,300
3,813,400
8,394,700
12,301,400
Slide 11
2012-13 Campus
Gov.’s Budget Allocations
In recent years, the same process has been used to
allocate General Fund cuts.
ATTACHMENT A - 2012/13 Governor's Budget Allocations, Gross Budget Summary
(5)
Bakersfield
Channel Islands
Chico
Dominguez Hills
East Bay
Fresno
Fullerton
Humboldt
Long Beach
Los Angeles
Maritime Academy
(6)
(7)
2012/13 Budget Adjustments
General Fund
Tuition
GF Base
Adjustments
GF Expenditure
Adjustments
2012/13 Tuition
Revenue
Adjustment
(Attach. B, Col. 7)
(Attach. C, Col. 11)
(Attach. D, Col. 16)
($2,364,980)
(217,510)
(4,661,590)
(3,047,030)
(4,287,980)
(5,816,390)
(8,478,400)
(2,851,740)
(8,852,900)
(5,454,490)
(81,580)
($3,216,700)
(3,357,100)
(8,471,000)
(5,032,800)
(8,185,400)
(9,311,000)
(14,989,000)
(5,803,300)
(16,485,700)
(9,187,700)
(1,372,400)
$3,570,000
1,863,000
7,432,000
4,941,000
5,615,000
9,173,000
14,800,000
3,899,000
15,345,000
8,095,000
421,000
(8)
(9)
(10)
(11)
2012/13 CSU Governor's Budget Allocation Totals
General Fund
Allocation
Tuition Fee
Revenue
Unadjusted
Other Fee
Revenue and
Reim.
(Cols. 1 + 5 + 6)
(Cols. 2 + 7)
(=Col. 3)
$43,159,809
40,543,710
68,197,632
51,687,052
51,548,561
90,796,432
92,618,561
50,753,310
106,056,436
82,231,939
19,653,771
$43,530,033
21,362,000
88,956,000
65,659,122
82,148,000
115,401,316
196,944,148
45,573,528
192,408,000
114,035,658
5,214,159
$3,319,971
1,449,190
10,366,000
3,559,620
16,723,000
12,075,068
22,937,849
8,212,463
29,391,500
14,078,102
1,710,823
2012/13 Gross
Budget
Allocation
(Sum Cols. 8-10)
$90,009,813
63,354,900
167,519,632
120,905,794
150,419,561
218,272,816
312,500,558
104,539,301
327,855,936
210,345,699
Slide 12
26,578,753
Where Is Funding Used
2011-12 CSU Operating Expenditures
Financial Aid
14%
Salaries
and
Benefiits
71%
Equipment,
Suplies,
utilities, etc.
15%
Source: CSU Final Budget Summaries
Slide 13
Where Is Funding Used
2011-12 CSU Operating Expenditures
Executives
0.2%
Staff Salaries
28.6%
Equipment,
Suplies,
utilities, etc.
16.2%
Benefiits
25.0%
Academic
Salaries
30.0%
Source: CSU Final budget Summaries
Does not include Financial Aid or Lease Bond expenditures
Slide 14
How the System Blew Up
Slide 15
CSU State Support versus
Higher Education Compact Funding
Agreement
$ in Billions
$4.50
Projected General Fund Appropriations under previous
Higher Education Compact Agreement
$4.00
$3.83
$3.59
$3.50
$3.35
$3.12
$1.7
Billion
Gap
$2.97
$3.00
$2.87
$2.79
$2.61
$2.68
$2.62
$2.49
$2.47
$2.50
$2.79
$2.25
$2.45
$2.16
$2.35
$2.14
State General Fund Allocations
$2.00
$1.50
98-99
99-00
00-01
01-02
02-03
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
11-12
Slide 16
How the System Blew Up
Resident
Students
450,000
2012-13 State Appropriations equal 1996-97
levels, but Resident Enrollment has
increased by 90,000 Students
$ in Billions
$3.50
446,686
$3.25
430,000
422,277
417,000
$2.97
$3.00
410,000
$2.87
398,000
392,827
390,000
394,504
$2.79
$2.75
370,000
$2.50
349,698
350,000
330,000
$2.45
$2.35
327,518
$2.25
$2.25
$2.00
310,000
$2.00
290,000
270,000
$1.80
$1.78
250,000
$1.75
$1.50
96-97
97-98
98-99
99-00
00-01
01-02
02-03
Resident Headcount
03-04
04-05
05-06
06-07
07-08
08-09
09-10
10-11
CSU State Allocation (in billions)
11-12
12-13
Slide 17
Declining State Support Forces More
Reliance on Student Fees
(in 2012 projected Constant Dollars)
$14,000
Assumes
Dec. 2012
Trigger Cut
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
1998-99
1999-00
2005-06
2007-08
Tuition and Fees less Financial Aid
2009-10
2010-11
2011-12
State Funds
2012-13
Slide 18
How the System Blew Up
Tuition Fee Increases Have NOT Offset
Tuition Fee
Have
NOT Made Up for
TotalIncreases
General Fund
Losses
General Fund Losses
CSU Student Headcount and Funding Since 2007-08
Resident Student
Headcount
2007-08
2008-09
2009-10
2010-11
2011-12
2011-12
versus
2007-08
447,301
446,686
422,277
392,827
398,059
(49,242)
Dollars in Thousands
State
General Fund
Tuition Fee
Revenue
(net of financial aid)
$2,970,643
$2,871,755
$2,345,743
$2,577,638
$2,002,751
($967,892)
$904,187
$1,090,444
$1,198,911
$1,217,072
$1,497,161
$592,974
Slide 19
Sharing the cost of education
in the CSU per $1
$1.00
$0.20
$0.42
$0.80
$0.60
$0.80
$0.40
$0.58
$0.20
$0.00
1998-99
2011-12
State
Student
Slide 20
Where CSU Fits in the Universe
Slide 21
2012-13 California’s Revenues
Estate Taxes Liquor Tobacco
0.05%
Tax
Taxes
0.34% 0.09%
Insurance Tax
2.28%
Motor Vehicle
Fees
0.03%
Corporation Tax
Other
3.20%
9.80%
Sales and Use Tax
21.78%
Personal Income Tax
62.43%
Slide 22
2012-13 California’s Expenses
Labor and Workforce
Development
General Legislative,
0.48%
Government Judicial,
Executive
3.89%
2.81%
State and
Consumer
Services
0.74%
Business,
Transportation
& Housing
0.60%
Higher Education
10.13%
Natural
Resources
2.05%
Environmental Protection
0.05%
Health and Human
Services
28.54%
K-12 Education
41.25%
Corrections and
Rehabilitation
9.45%
Slide 23
2012-13 Proposed
Higher Education Spending
Student Aid
Commission
5%
University of
California
22%
Community
Colleges
54%
California
State
University
19%
Slide 24
Where CSU Fits in
California’s Universe
 Higher Education
10%
– Student Aid Commission 5%
– University of California
22%
– Community Colleges
54%
 CSU
19%
CSU is 19% of Higher Education spending and
2.4% of the State of California’s General Fund
Expenditures
Slide 25
Do You Know Your Share?
Slide 26
Do You Know Your Share
Slide 27
Do You Know Your Share
Slide 28
CSU Share of California’s
Fiscal Problem
 If you hear the State of California has a $9 Billion
problem:
– Higher Ed
• 10% X $9B = $900 Million ($1 Billion, rounded)
– CSU
• Approximately 20% X $1B = $200 Million
 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
 2012-13 Potential Budget Reduction Trigger to the CSU
is $200 Million
Slide 29
What is your campus share?
If you hear the CSU has a $200 Million problem:
– What is your campus share?
Slide 30
What is your campus share?
Slide 31
What is your 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
Slide 32
Student Fees and Financial Aid
Slide 33
CSU Trustees Fee Policy
 Enunciated by the Board in 1993 document
“Quality and Affordability.” Reaffirmed and
elaborated upon by the Board in May 2010.
 Primary responsibility for funding the educational
mission and operations of the university,
including supporting enrollments, rests with the
State.
Slide 34
California’s Master Plan for
Higher Education
 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.
Slide 35
CSU Fees Remain Below
Comparison Institutions
Note: CPEC Comparison Institutions
Slide 36
CSU Operating Costs Among
Lowest in Nation
Greater Efficiency?
CSU Already Among the Most Efficient
Slide 37
CSU Faculty is
working harder…..
1990-1991
Student
Faculty
Campuses
Ratio
Channel Islands
Monterey Bay
Maritime Academy
San Marcos
12.50
Humboldt
15.35
Dominguez Hills
15.81
Bakersfield
16.17
San Luis Obispo
16.53
San Bernardino
16.66
San Jose
17.40
Chico
17.41
Sonoma
17.41
Stanislaus
17.60
Sacramento
17.63
Fresno
17.64
Pomona
17.81
San Francisco
18.10
Northridge
18.38
Fullerton
18.39
Los Angeles
18.49
East Bay
18.53
Long Beach
18.62
San Diego
18.65
Systemwide Average
17.25
2006-2007
Student
Faculty
%
Ratio
Variance Change
16.47
16.47
0%
22.36
22.36
0%
12.71
12.71
0%
22.92
10.42
83%
19.15
3.80
25%
22.86
7.05
45%
19.61
3.44
21%
19.15
2.62
16%
21.18
4.52
27%
20.62
3.22
19%
20.94
3.53
20%
21.74
4.33
25%
21.58
3.98
23%
20.35
2.72
15%
20.94
3.30
19%
22.15
4.34
24%
21.26
3.16
17%
22.73
4.35
24%
21.13
2.74
15%
19.03
0.54
3%
20.17
1.64
9%
19.57
0.95
5%
19.16
0.51
3%
20.34
Slide 38
CSU State University Grant
Awards Exceed $600,000,000
CSU Foregoes One-Third of all projected new Tuition Fee
Revenue to Provide Grants to Students with Need. CSU
revenue loss now exceeds $600 million.
Funding Source
2008/09
2009/10
2010/11
Estimated
2011/12
CSU Tuition Fee Revenue
State General Fund
Total Financial Aid-SUG
Funding
$279,896,000
$397,926,000
$431,007,000
$577,421,000
33,785,000
33,785,000
33,785,000
33,785,000
$313,681,000
$431,711,000
$464,792,000
$611,206,000
Slide 39
Budget Cycle
Slide 40
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
• • • • •
•
•
•
•
•
•
• •
•
Slide 41
Slide 42
CSU FUNDS
Slide 43
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.
Slide 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.
Slide 45
Enterprise Budgets
 Other CSU Funds – Campus specific budget process
–
–
–
–
–
–
Housing
Parking
Continuing Education
Instructionally Related Activities
Lottery
Miscellaneous Trust
Slide 46
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
Slide 47
Lottery Guidelines
Slide 48
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.
Slide 49
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 89230 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
Slide 50
Housing
 Funding Source
– Revenues are generated from license fees paid by
dormitory residents and must be used exclusively for
the self-supporting housing program
Slide 51
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.
Slide 52
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.
Slide 53
Slide 54