CALIFORNIA STATE UNIVERSITY, LONG BEACH
2005-06 RESOURCE PLANNING PROCESS
Recommended Budget Plan
Context for 2005-06 budget planning (Higher Education Compact)
CSULB has based its resource planning for 2005-06 on the assumption that Governor Schwarzenegger's multi-year commitment to higher education will survive the budget deliberations, and result in increased general fund resources to the campus for the first time in three years.
The CSU Support Budget approved by the CSU Board of Trustees last fall was consistent with the Governor's proposed budget, which in turn was based on the terms and conditions of the Higher Education Compact. The compact specifies the following funding commitments over the six-year period 2005-06 through 2010-11:
Basic Budget Support
The Compact pledges a 3% General Fund increase to the prior year's base for both 2005-06 and 2006-07 for basic budget needs including salary increases, health benefits, maintenance, inflation, and other cost increases. Beginning in 2007-08 and extending through 2010-11, the Compact provides for a General Fund increase of 4% to the prior year's base.
Core Academic Needs
For the final three years of the compact, 2008-09 through 2010-11, the State will provide an additional 1% (beyond the 4%) increase to the prior year's base for core academic support needs, e.g. equipment, technology, libraries, and ongoing building maintenance.
Enrollment
The Compact will fund enrollment growth at a rate of 2.5% per year through 2010-11. In 2005-06, the CSU will receive funding at the agreed marginal cost of instruction to increase system-wide enrollment by 8,103 full-time equivalent students (FTES).
Student Fees
The Compact assumes implementation of a stable fee policy that will keep increases reasonable, while providing adequate funding for student fee-funded programs and preserving the quality of the university. The fee policy assumes preservation of the base budget and assumes that revenues from student fees will remain with the CSU and not offset reductions in State support.
State University Fees for undergraduate students will increase 8% in 2005-06 and 2006-07.
The State University Fee for graduate students will increase by no less than 10% in both 2005-06 and 2006-07. For future years, graduate fee levels will be determined by the average cost of instruction, average fees at other public comparison institutions, market factors, etc. The CSU is expected to make progress toward the goal that graduate fees will be 50% higher than undergraduate fees.
Campus Recovery Plan
In recognition of the need to protect both instructional capacity and the quality of instruction, and to restore support services necessary to meet the demands of our increasing enrollment targets, the Resource Planning Process Task Force embraced the concept of a "recovery plan." Given the rate of new funding increases recommended for the CSU, the Task Force recognizes that it will take three or four years to restore base funding to the 2001-2002 level.
The Campus Recovery Plan was developed with the following underlying premises:
Faculty Costs for Increased Enrollment
Funding faculty costs for increased enrollment target would be the first commitment against new resources. During 2005-06, enrollment growth is 655 full-time equivalent students (FTES).
Recovery Allocations to Instruction and Non-Instruction
After faculty costs are covered, remaining recovery funds would be allocated on a pro-rata basis to both instructional and non-instructional areas to preserve instructional capacity, improve quality, and restore services impacted during the budget reduction years.
Each division would present a plan to the RPP Task Force that details expenditure priorities for departments and programs consistent with its allocation of recovery funds. It is expected that the use of funds would be consistent with plans and that expenditures would be made within the fiscal year the funds are received. New requirements would be funded within the context of the recovery allocations and as presented in the division's plan.
There are three funding sources encompassed by the campus recovery plan:
This is the amount of base budget funding available from the campus's general fund allocation after mandatory costs are covered. This amount may change depending on the final budget outcome, revised revenue projections for the campus and collective bargaining requirements.
These are the cumulative savings to be used to accelerate the campus recovery plan for 2005-06, in anticipation of a compensatory base budget adjustment in the following fiscal year. These 'reserves' result from prudent and conservative management of university-wide budgets including non-resident revenues, unexpended general reserves, and unexpended benefits budget due to extended vacancies.
These are the cumulative division savings pledged in 2005-06 to further accelerate the recovery plan. These reserves are the result of the divisions' careful management of their respective resources over a number of years, including delays in hiring and equipment replacement, savings from the faculty "golden handshake" incentive program, unexpended division reserves, etc.
Contingency Planning
Although we are cautiously optimistic that the budget proposed by the Governor will be passed by the Legislature, there is still a degree of uncertainty that warrants contingency planning by the campus. The contingency plan will be activated if the final state budget results in a reduction to the CSU as compared to the Governor's May Revision. The resources available for contingency purposes are as follows:
In addition to the funding already pledged to the Recovery Plan, there is additional base funding in the budget as a result of a late adjustments to the 2005-06 campus budgets by the system office for risk management and energy funding.
It is estimated that an additional $1.6 million of one-time funds will be available from one-time benefit savings realized in the current year.
To the extent additional division savings exist, divisions have committed to allocate these dollars toward their recovery plans as detailed in the contingency plans on Form 3B, which are provided in Appendix B.
Resource Planning Process Task Force Recommendations
The 2005-06 RPP Task Force recommends the President authorize the following funding allocations and contingency plans:
A base budget allocation of $1,797,000 in faculty resources is recommended to the Division of Academic Affairs to accommodate the 2005-06 budgeted enrollment increase of 655 FTES. This allocation is based on the formula rate used by the CSU to fund faculty salaries, excluding benefits.
A base budget allocation totaling $2,343,000 is recommended for distribution on a pro-rata basis to operating divisions for both instruction and non-instruction units.
A non-base allocation of approximately $7,841,000 from university central reserves is recommended for allocation to the campus recovery plan and distributed to operating divisions on a pro-rata basis.
Available university funds in excess of the recovery plan requirements should be held as a contingency reserve until the state budget is enacted. Currently, that contingency is estimated at $877,600 (base) and $1,600,000 (non-base). To the extent that the base reserve funds are not required to cover budget deterioration or for other purposes, e.g. to cover additional mandatory costs, such as compensation in excess of the CSU allocation due to collective bargaining outcomes or negative changes in projected revenues, the base dollars will be distributed to operating divisions on a pro-rata basis to accelerate the recovery plan. Any excess non-base university-wide reserves should be carried forward to assist in funding the 2006-07 recovery plan.