The CSU Board of Trustees Tuesday weighed the impact of a potential fund expenditure plan based on Gov. Jerry Brown’s $125.1 million CSU budget in an effort to patch the cash-strapped California State University.
Last August, the board formally requested about $441 million from Sacramento lawmakers—an admitted overshoot to compensate for lost revenue—but only received $125.1 million, forcing them to only focus on the most dire programs like health benefits and operations.
These expenses, called “mandatory costs,” will receive the most money, $48.2 million, allocated from the overall $125 million in the budget plan.
According to CSU documents, without funding for the mandatory cost increases, campuses would have to “redirect resources from other program areas to meet the obligations” of employee health benefits, operation and maintenance of newly-constructed space and energy.
“Funding mandatory costs preserves the integrity of the CSU programs,” the documents state.
Mandatory costs are expenditures each university must pay despite any monetary help appropriated by the state.
Leonard Pettis, CSU chief of plant, energy and utilities, said each campus has reduced energy usage by about 50 percent in the last 35 years to curb operational costs.
But Assistant Vice Chancellor Robert Turnage said $48 million is only enough to cover this year’s most urgent needs.
“The fact that we’re able to allocate the $36.2 million to this one-year increase doesn’t solve the problem,” said Turnage. “Because we’ve had five consecutive years of similar increases that we’ve basically been eating to the detriment of our programs.”
Of that $48.2 million, $36.2 million will go toward health benefits for employees, whose salaries have seen no increase or raise in at least five years.
In 2009, faculty members had to absorb a 9 percent salary reduction and work furloughs because of a declining economy and curtailed budget. This year’s budget proposes a $38 million employee compensation package.
The money will be disbursed based on market factors, the collective bargaining process and other items.
CSU institutions received a record amount of applications for fall 2013, but due to budget constraints, had to turn away many eligible applicants.
Applications rose about 7.8 percent last from year’s total to 314,100 individuals systemwide. CSU institutions also had to close the 2013 spring application cycle for most campuses.
To help, the budget proposes $21.7 million that would go towards growth in state-assisted enrollment in the CSU system by 1.45 percent. Benjamin Quillian, Ph.D., executive vice chancellor and chief financial officer for the CSU, noted that the Board of Trustees, in their original request, asked for about $155 million to compensate for an additional 5 percent enrollment demand.
“Many of the CSU campuses are currently facing a record number of applications for fall of 2013,” Quillian said. “And increasing the investment is considered not only vital to our students, but to the economy of California as well.”
The growth increase would allow more than 5,700 more students to enroll in the CSU.
The money will be disbursed based on consultation with campus presidents as well as helping increase enrollments at smaller campuses who have the capacity to grow.
The Board of Trustees approved a 5 percent increase of state-assisted enrollment for the sake of improving California’s economic recovery and workforce development.
The board justified it based on burgeoning demands they discussed last November.
Brown, an ex officio member of the Board of Trustees, who has been making appearances at the CSU Board of Trustees and UC Board of Regents meetings in the wake of the passage of Proposition 30, said one CSU president took a pay cut even though the school was offering more.
He said the people with the biggest belts need to “tuck it in” in an effort to carry some of the budget burdens the system has recently been experiencing.
“California has lots of needs for highways, corrections for schools, for childcare, but we can’t do everything,” said Brown. “Everybody has to get ready to make hard choices.”
Also allocated from the $125 million budget is $10 million for online classes designed as a strategy to assist students in getting through “high-demand” courses, called “bottleneck courses.”
Ephraim Smith, executive vice chancellor and chief academic officer for the CSU, said the online classes would take the form of hybrid in-class and online courses, as well as massive open online courses, or MOOCS.
Brown said these classes offer much more flexibility than other school systems and keeps the door open for more students to enter the CSU.
“I do think this system has the opportunity to be the national leader in this online program,” Brown said.
When questioned by Trustee William Hauck about the approach of putting bottleneck courses online, Smith, who once was the dean of Cal State Fullerton’s School of Business and Economics from 1990 to 1998, said the goal of online classes is not to make them easier, but to facilitate better atmospheres for students and faculty members.
“(These are) different ways of providing technology to students we can improve pass rates from courses,” said Smith. “(It) keeps students engaged in a class, so this would be a major section of how the money would be used.
“Our goal is that we would come up with multi-campus solutions to be used by students across the system, not just on one campus,” Smith said.
The last $7.2 million will be apportioned to help students succeed through initiatives aimed at reducing the time it takes to graduate to four years and improve graduation rates through more effective academic advising and better preparing first-time freshmen.
Lt. Gov. Gavin Newsom, also in attendance at Tuesday’s meeting, said he supports the governor’s budget plan for the CSU although he raised some concerns about some of the programs like Cal State Online.
“I want to make the point that I’m supportive and I’m very enthusiastic and appreciative about the governor’s leadership on this and his willingness to put money where the spirit of his initiative is—I just want to make sure we do justice to that,” he said.
The CSU Board of Trustees meeting continues in Long Beach on Wednesday.