BUDGET UPDATE
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BUDGET UPDATE Ryan Storm Assistant Vice Chancellor for Budget
San Francisco San Jose San Luis Obispo San Marcos Sonoma Stanislaus
April 7, 2015
1
ROADMAP Current Year Finances “Odorless” News Budget Year Finances Multi-Year Trends “Malodorous” News CSU Support Budget Governor’s Budget Proposals “Fragrant” LAO’s Critique of Governor’s Plan News Next Steps in Budget Cycle Future Considerations
2
CURRENT YEAR FINANCES
3
2014-15 CSU OPERATING BUDGET BY EXPENDITURE CATEGORY
4
14-15 CSU OPERATING BUDGET BY SALARIES
Executive 0.4%
Support Staff 33.0%
Management 13.2%
Academic Salaries 47.6%
Student Assistant/Temp Help/OT 3.2% Department Chairs 2.6%
5
BUDGET YEAR FINANCES
6
CSU PROJECTED REVENUES (IN MILLIONS)
gory
ral Fund Appropriation (w/GO and LR Bond Debt Service) Tuition Fees
n Fee Discounts
esident Tuition
cation Fee
nt Health (pass-through) Fees & Revenue Sources
Projected Revenues
2014-15
2015-16
$2,696
$2,889
2,236
2,265
-644
-648
168
168
25
25
95
95
164
164
$4,741
$4,959 7
2015-16 CSU SOURCES OF REVENUE Tuition Fees Discount (Revenue Foregone), $648M
State Appropriation, $2.9B, 53%
Net Resident & Nonresident Tuition Fees, $2.2B, 41%
Other Student Fees, $164M, 3%
Application & Student Health Fees, $121M, 2%
8
CSU GENERAL FUND APPROPRIATIONS REVISED 2014-15 & PROPOSED 2015-16
4/15 Budget Act General Fund ropriation (w/GO & LR Bond Debt Service)
$2,695,755,000
pplemental GF Appropriation for State Funded 14/15 Retirement Rate Adjustment
66,263,000
4/15 Revised General Fund
15/16 Governor's Budget General Fund Base dget Increase
ase Revenue Bond Debt Service Adjustment
5/16 Governor's Budget General Fund
$2,762,018,000 119,467,000 7,268,000 $2,888,753,000 9
MULTI-YEAR TRENDS
10
Eligible Undergraduate Applicants California Residents
0
0
26,430
30,209
22,123
10,435 28,803
21,697
0
0
Not Admitted*
193,928 173,562
178,615
Fall 2010
Fall 2011
212,152
214,939
Fall 2013
Fall 2014
194,564
0
0 Fall 2009
Fall 2012
Admitted*
General Fund Appropriation and Resident Student Enrollment Trends $ in Billions
FTES 370,000
$4.00 360,294 est.
357,222
360,000
$3.75
351,955
353,915
350,000
$3.50
343,226 341,280
340,000
$3.25
340,302 331,353 334,343
330,000
$3.00 $2.97
320,000
$2.87
$2.81
328,155
$2.75
$2.70 $2.57
$2.58
310,000
$2.69
$2.50
$2.60
$2.43
$2.35
$2.35
300,000
$2.25
$2.06
290,000
$2.00
290,554 $2.00
280,000
$1.75 273,928
270,000
$1.50 98-99 00-01 02-03 05-06 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17
Actual Full Time Equivalent Students (Resident)
Gap Between State Appropriation and Tuition and Fees as a Percentage of Funding Source has Narrowed 100% 90% 82%
79%
80% 72%
71%
70% 62%
63%
60% 51%
51%
49%
49%
52%
54%
50% 40% 38%
30% 28%
20% 18%
10% 0%
21%
29%
37%
48%
46%
Lower State Support has Forced More Reliance on Student Tuition & Fees 000
000
000
000
000
000
000
$0
HEALTH CARE PREMIUM COSTS (CSU OPERATING FUND) In Millions
$450 $400 $350 $300 $250 $200 $150 $100 $50
15
CSU SUPPORT BUDGET
17
2015-16 CSU SUPPORT BUDGET REQUEST
Student Success & Completion Initiatives 3 % Enrollment Compensation (2 % “pool”) Critical facility maintenance/infrastructure Information technology upgrade/renewal Mandatory costs (health benes, new space) Center for California Studies
Total new investments
$38.0 m 103.2 m 65.5 m 25.0 m 14.0 m 23.1 m 0.2 m
$269.0 m 18
GOVERNOR’S BUDGET PROPOSALS
19
NOTABLE GOVERNOR’S BUDGET PROPOSALS AFFECTING CSU:
$119.5 m Support Budget Increase
$25 m one-time for Deferred Maintenance
Academic Sustainability Plan
Awards for Innovation at CSU
Health Benefits for Retired State Employees 20
2015-16 SUPPORT BUDGET PLAN
otal New Investments
uition Increase et Tuition Revenue (from 3% Funded Enrollment) overnor’s Multi-Year Funding Plan
$269.0 m 0.0 m 52.4 m 119.5 m
vailable Revenues 171.9 m ____________________________________________________ otal Additional Resource Need $97.1 m equested of the State 41
STATE FUNDING REQUESTED VS. GOVERNOR’S PROPOSAL
U Request
$216.6 m
oposed by the Governor
$119.5 m
nding Gap
$97.1 m
23
General Fund Appropriation Over Time (Out-Year Governor's Multi-Year Plan / no GO Bonds)
$2.971 $2.809 $2.685
$2.578
$2.566 $2.346 $2.000
2007-08
2010-11
2011-12
$2.063
2012-13
2013-14
2014-15
2015-16
2016-17
LAO CRITIQUE OF THE GOVERNOR’S PLAN
25
TABLE
U:
LAO RECOMMENDATIONS AFFECTING
No new full time equivalent students for 2015-16
No proposals to meet infrastructure needs
2.2% Inflation increase covers everything
Establish state support & tuition cost share policy
Reject innovation awards proposal
26
NEXT STEPS IN BUDGET CYCLE
27
28
SUMMARY OF FUNDING PROPOSALS
ard of Trustees
vernor
gislative Analyst
$216.6M state General Fund; No tuition fee increase $119.5M state General Fund; -Unallocated Increase No tuition fee increase $94 M state General Fund (Cap); -Unallocated Increase $??? tuition increase (???%)
29
30
UMMARY OF
enate
ssembly
FUNDING PROPOSALS (CONT.) $305.5M state General Fund -Additional Courses -Support Services -Additional Enrollment -Graduation Incentive Grant No tuition fee increase $266.6M state General Fund -Fund Trustees Request -Add'l $50M Unallocated Increase No tuition fee increase
31
FUTURE CONSIDERATIONS
32
SIGNIFICANT CONSIDERATIONS reative Strategies to “Making it all Work”
Revised Budget Allocation Methodology Infrastructure Needs Expanded Investment Authority CSU Student Outcome Measures State-Req’d Performance Measures Sustainable Tuition Policy
mployee & Retiree Salaries & Benefits
Why All of Us Do What We Do 33
34
BUDGET UPDATE Ryan Storm Assistant Vice Chancellor for Budget
San Francisco San Jose San Luis Obispo San Marcos Sonoma Stanislaus
April 7, 2015
1
ROADMAP Current Year Finances “Odorless” News Budget Year Finances Multi-Year Trends “Malodorous” News CSU Support Budget Governor’s Budget Proposals “Fragrant” LAO’s Critique of Governor’s Plan News Next Steps in Budget Cycle Future Considerations
2
CURRENT YEAR FINANCES
3
2014-15 CSU OPERATING BUDGET BY EXPENDITURE CATEGORY
4
14-15 CSU OPERATING BUDGET BY SALARIES
Executive 0.4%
Support Staff 33.0%
Management 13.2%
Academic Salaries 47.6%
Student Assistant/Temp Help/OT 3.2% Department Chairs 2.6%
5
BUDGET YEAR FINANCES
6
CSU PROJECTED REVENUES (IN MILLIONS)
gory
ral Fund Appropriation (w/GO and LR Bond Debt Service) Tuition Fees
n Fee Discounts
esident Tuition
cation Fee
nt Health (pass-through) Fees & Revenue Sources
Projected Revenues
2014-15
2015-16
$2,696
$2,889
2,236
2,265
-644
-648
168
168
25
25
95
95
164
164
$4,741
$4,959 7
2015-16 CSU SOURCES OF REVENUE Tuition Fees Discount (Revenue Foregone), $648M
State Appropriation, $2.9B, 53%
Net Resident & Nonresident Tuition Fees, $2.2B, 41%
Other Student Fees, $164M, 3%
Application & Student Health Fees, $121M, 2%
8
CSU GENERAL FUND APPROPRIATIONS REVISED 2014-15 & PROPOSED 2015-16
4/15 Budget Act General Fund ropriation (w/GO & LR Bond Debt Service)
$2,695,755,000
pplemental GF Appropriation for State Funded 14/15 Retirement Rate Adjustment
66,263,000
4/15 Revised General Fund
15/16 Governor's Budget General Fund Base dget Increase
ase Revenue Bond Debt Service Adjustment
5/16 Governor's Budget General Fund
$2,762,018,000 119,467,000 7,268,000 $2,888,753,000 9
MULTI-YEAR TRENDS
10
Eligible Undergraduate Applicants California Residents
0
0
26,430
30,209
22,123
10,435 28,803
21,697
0
0
Not Admitted*
193,928 173,562
178,615
Fall 2010
Fall 2011
212,152
214,939
Fall 2013
Fall 2014
194,564
0
0 Fall 2009
Fall 2012
Admitted*
General Fund Appropriation and Resident Student Enrollment Trends $ in Billions
FTES 370,000
$4.00 360,294 est.
357,222
360,000
$3.75
351,955
353,915
350,000
$3.50
343,226 341,280
340,000
$3.25
340,302 331,353 334,343
330,000
$3.00 $2.97
320,000
$2.87
$2.81
328,155
$2.75
$2.70 $2.57
$2.58
310,000
$2.69
$2.50
$2.60
$2.43
$2.35
$2.35
300,000
$2.25
$2.06
290,000
$2.00
290,554 $2.00
280,000
$1.75 273,928
270,000
$1.50 98-99 00-01 02-03 05-06 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17
Actual Full Time Equivalent Students (Resident)
Gap Between State Appropriation and Tuition and Fees as a Percentage of Funding Source has Narrowed 100% 90% 82%
79%
80% 72%
71%
70% 62%
63%
60% 51%
51%
49%
49%
52%
54%
50% 40% 38%
30% 28%
20% 18%
10% 0%
21%
29%
37%
48%
46%
Lower State Support has Forced More Reliance on Student Tuition & Fees 000
000
000
000
000
000
000
$0
HEALTH CARE PREMIUM COSTS (CSU OPERATING FUND) In Millions
$450 $400 $350 $300 $250 $200 $150 $100 $50
15
CSU SUPPORT BUDGET
17
2015-16 CSU SUPPORT BUDGET REQUEST
Student Success & Completion Initiatives 3 % Enrollment Compensation (2 % “pool”) Critical facility maintenance/infrastructure Information technology upgrade/renewal Mandatory costs (health benes, new space) Center for California Studies
Total new investments
$38.0 m 103.2 m 65.5 m 25.0 m 14.0 m 23.1 m 0.2 m
$269.0 m 18
GOVERNOR’S BUDGET PROPOSALS
19
NOTABLE GOVERNOR’S BUDGET PROPOSALS AFFECTING CSU:
$119.5 m Support Budget Increase
$25 m one-time for Deferred Maintenance
Academic Sustainability Plan
Awards for Innovation at CSU
Health Benefits for Retired State Employees 20
2015-16 SUPPORT BUDGET PLAN
otal New Investments
uition Increase et Tuition Revenue (from 3% Funded Enrollment) overnor’s Multi-Year Funding Plan
$269.0 m 0.0 m 52.4 m 119.5 m
vailable Revenues 171.9 m ____________________________________________________ otal Additional Resource Need $97.1 m equested of the State 41
STATE FUNDING REQUESTED VS. GOVERNOR’S PROPOSAL
U Request
$216.6 m
oposed by the Governor
$119.5 m
nding Gap
$97.1 m
23
General Fund Appropriation Over Time (Out-Year Governor's Multi-Year Plan / no GO Bonds)
$2.971 $2.809 $2.685
$2.578
$2.566 $2.346 $2.000
2007-08
2010-11
2011-12
$2.063
2012-13
2013-14
2014-15
2015-16
2016-17
LAO CRITIQUE OF THE GOVERNOR’S PLAN
25
TABLE
U:
LAO RECOMMENDATIONS AFFECTING
No new full time equivalent students for 2015-16
No proposals to meet infrastructure needs
2.2% Inflation increase covers everything
Establish state support & tuition cost share policy
Reject innovation awards proposal
26
NEXT STEPS IN BUDGET CYCLE
27
28
SUMMARY OF FUNDING PROPOSALS
ard of Trustees
vernor
gislative Analyst
$216.6M state General Fund; No tuition fee increase $119.5M state General Fund; -Unallocated Increase No tuition fee increase $94 M state General Fund (Cap); -Unallocated Increase $??? tuition increase (???%)
29
30
UMMARY OF
enate
ssembly
FUNDING PROPOSALS (CONT.) $305.5M state General Fund -Additional Courses -Support Services -Additional Enrollment -Graduation Incentive Grant No tuition fee increase $266.6M state General Fund -Fund Trustees Request -Add'l $50M Unallocated Increase No tuition fee increase
31
FUTURE CONSIDERATIONS
32
SIGNIFICANT CONSIDERATIONS reative Strategies to “Making it all Work”
Revised Budget Allocation Methodology Infrastructure Needs Expanded Investment Authority CSU Student Outcome Measures State-Req’d Performance Measures Sustainable Tuition Policy
mployee & Retiree Salaries & Benefits
Why All of Us Do What We Do 33
34
