CSU Operating Budget Updates

August 2020 Update

SJSU employs a rolling three-year budget plan to facilitate strategic planning.  The 2020-21 budget plan anticipated $8 million in additional/new operating support, primarily $3.5 million to support Graduation Initiative 2025 and $4 million from increased enrollment. In January, the Governor issued his preliminary budget plan, which included $199 million for the CSU.

Before the CSU could respond to the Governor’s January budget proposal with preliminary campus allocations, the COVID-19 pandemic set in and profoundly changed the state’s and the CSU’s financial plans. In anticipation of greatly reduced tax revenues, the California Budget Act of 2020 includes a $299 million decrease in recurring General Fund appropriation for the California State University (CSU) operating fund. This General Fund decrease, along with a reduction of tuition revenue of $24.2 million from changes in student enrollment patterns and behavior, equals a $323.2 million decrease in recurring funding for the CSU compared to 2019-20. San Jose State’s net reduction in General Fund support totals $18.6 million, plus a loss of $2.2 million in special enrollment support - nearly $21 million in total.

In addition to the state reduction, the campus faces a number of other reductions in revenues and increases in expenditure as a result of the pandemic. While estimated here, net tuition revenue is unknown at this time as students and their families determine enrollment decisions for fall 2020.  We anticipate a significant shortfall in international student enrollment. Total headcount is offset by additional transfers, but there is a $9M revenue shortfall we must recover from.

Revenue impacts will be felt in other areas.  Housing revenue will be reduced due to necessary social distancing protocols and fewer students living on campus; income-producing events, programs and sponsorships will continue to be limited; and philanthropic giving will be challenged.

Note that 80% of the University's expenditures are labor-related and relatively fixed; these will remain flat in 2020-21. At the same time, other expenses in some areas such as continuous improvement to online instruction, student financial aid, student services, and unanticipated expenses related to COVID-19 (e.g. PPE equipment) will increase.

Major Changes to the 2020-21 Budget

(millions)

State support reduction

-$20.8 

Planned new operating support that didn't materialize

 -10.0

Enrollment changes net

 -11.1

    (-155 residents, -500 non-                    residences and average unit load          impacts)

 

Spring refunds: housing, meal plans, parking

 -10.0

Campus physical safety measures

-2.4

Teach Online costs

-3.4

2020-21 revenue losses (housing-$27M, athletics-$3M)

-30.0

Other unforeseen costs and deferred costs, net

-5.0

Total impacts...at the least

-$92.7

SJSU plans to address anticipated budget shortfalls by taking a series of actions to reduce expenses and bridge the funding reductions that the State issued.  As we address our budget challenges, we will do our best to protect our employees’ job stability. 

To fully address the budget shortfalls and meet our debt obligations, SJSU will need to tap into all of the reserve funds available from all its areas, including its auxiliaries. We are committed to utilizing the reserve funds from all areas to assist programs and services related to the respective areas for the greatest direct positive impact possible. 

All fungible reserves, in every area of the campus, will be reviewed and appropriately utilized in the mission of the university. 

As noted in the CSU Financial Transparency Portal, SJSU has approximately $160 million in campus reserves (about 3+ months of operating expenses). About two-thirds of this amount ($115 million) are fungible and the rest are committed.  Currently, the goal is to use half of these reserves in 20/21, about 20% in 21/22, and 10% in 22/23.

Planned Resolutions

         

Use of reserves

$58.4

CARES support

16.2

Travel curtailment

2.6

Hiring chill - staff and students

6.0

TBD - waiting for enrollment outcome

9.5

Total

$92.7

We expect to share more detailed information in the coming weeks about SJSU’s 2020-21 budget when the enrollment picture becomes clear, including any decisions about potential layoffs. The annual budget report to the Academic Senate is scheduled for the October 26th meeting.

 

January 2020 Update

Governor Newsom released his 2020-21 budget proposal on January 10th, reflecting a commitment towards an investment in higher education and the CSU.  The 2020/21 budget proposal includes an increase of $199 million ongoing General Fund increase to support CSU costs. This represents an ongoing General Fund base increase of 5%.   Unlike the Governor’s approach last year, which connected every CSU augmentation with a specific purpose, the 2020/21 gives flexibility in allocating base increases. The budget also includes $6 million one-time General Fund for the development and expansion of degree and certificate completion programs through CSU extension.

Additional details of the Governor's proposed California Budget related to the CSU may be found on the California Budget Website.

 

January 2019 Update

Governor Newsom released his first budget proposal on January 10th, reflecting a commitment towards an investment in higher education and the CSU.  The 2019/20 budget proposal requests an ongoing General Fund increase of $300 million to the CSU to support Graduation Initiative 2025, a 2.0% increase in enrollment (equivalent to approximately 7,000 new full-time resident students), and requested operational costs (employee compensation, mandatory costs).  The budget also proposes a one-time allocation of $247 million to help address the CSU deferred maintenance backlog and to improve and expand on-campus child care centers.  Another $15 million of one-time funds is also proposed for the CSU to assist campus' existing efforts to address student hunger and housing needs.

A statement from CSU Chancellor Timothy P. White regarding the investment proposed by the Governor may be found online at the CSU NewsCenter

Proposed Incremental Expenditures Amount
Graduation Initiative 2025   $45 million
Operational Costs  $193 million
Resident Enrollment Growth   $62 million
Academic Facilities and Infrastructure  $247 million
Basic Needs Initiative   $15 million
Total $562 million 

Additional details of the Governor's proposed California Budget may be found on the California Budget Website.

November 2018 Update

As a foundational step in the annual budget process for the California State University and the respective campuses, the CSU Board of Trustees votes to approve an annual operating budget plan that is proposed to the State of California and the Governor.  At the November CSU Board of Trustees meeting, the Board adopted a resolution approving the proposed 2019/20 CSU operating budget plan.  The CSU proposed a $7.3 billion operating budget for 2019/20, with $4.1 billion from the state General Fund and $3.2 Billion from tuition and fee revenue.  This budget plan represents an expenditure increase of $554.3 million over the 2018/19 operating budget.

The operating budget request supports Graduation Initiative 2025, funds the cost of compensation for current and pending employee contracts and commitments, and supports a 5.0% increase in resident enrollment (equivalent to 18,207 new full-time resident students), mandatory costs, and funding towards academic facilities and infrastructure projects.

Uses of Funds  Amount %
Graduation Initiative 2025

$75 million

13.5%
Compensation Increases   $147.8 million 26.7%
Five Percent Increase in Resident Enrollment $206.1 million

37.2%

Mandatory Cost Increases

  8.2%
  • Health Benefits
$7.3 million  
  • Retirement
$26.5 million  
  • Maintenance of New Facilities
$4.8 million  
  • Minimum Wage Increase
$6.8 million  
Academic Facilities and Infrastructures $80 million 14.4%
Total New Uses $554.3 million 100%


To fund these commitments, the 2019/20 operating budget plans for an increase of $456.0 million in General Fund support and a $98.3 million net increase in tuition revenue generated from the 5% enrollment growth.

Sources of Funds   Amount
General Fund Increase   $456 million
  • Operating Budget
$376 million  
  • Academic Facilities and Infrastructure
$80 million  
Tuiition from 5% Enrollment Growth (18,207 Full Time Equivalent Students' Revenue)   $98.3 million
Total New Sources   $554 million

 

Additional details may be found online of the CSU 2019/20 Operating Budget.

August 2018 Update

In June 2018, Governor Brown signed and enacted the 2018/19 California State Budget, appropriating General Funds of $3.6 billion towards the California State University.  This resulted in a base (ongoing) increase of $197 million to the CSU’s annual Support Budget.  The incremental base funding will support the Graduation Initiative 2025 (student success), employee compensation, benefit obligations, and other mandatory costs.  While the approved budget was greater than the earlier proposals from the Governor and the Assembly, the budget is less than the CSU's Support Budget request of $263 million for ongoing needs, and did not provide funding for enrollment growth as requested by the CSU.

SJSU received $8.9 million in General Fund support for 2018/19, plus $5.6 million for prior year adjustments relating to compensation and retirement.  Additional details on the allocation of funds across the university can be found in detail in the 2018-19 Annual Budget Report.

 

April 2018 Update 2

The Chancellor will not bring forth a tuition increase recommendation to the board of Trustees in May.  Instead, he issued a letter to the campus community asking everyone to join with him in sustaining advocacy efforts.  The Governor will issue an updated budget plan in May ("May Revision").  This will be the next opportunity, but not the last, for an increase to the new funds planned for CSU, which currently stand at $92 million.

April 2018 Update 1

On April 19, 2018, a SJSU Budget Forum was hosted to describe the plans for the 2018/19 budget year.  President Papazian, Vice President for Administration and Finance Charlie Faas, and Provost Andy Feinstein joined the forum to address questions.  The presentation and video are available for viewing online.

 

January 2018 Update

On January 10, 2018, Governor Brown released his initial 2018-19 state budget, with a proposed increase of $92.1 million for the CSU, which amounts to a 1.4 percent increase to the CSU’s operating budget.  This proposed level of funding fell short of the support anticipated by the CSU.  As a result, a budget gap of $171 million exists between the Trustees’ budget request and the Governor’s proposal.  The CSU will continue to make the case with state leaders that additional investment in the CSU is essential.  The CSU is also contemplating CSU-controlled strategies, notably a potential tuition increase and a potential reduction to academic and non-academic programs and services.

A statement from CSU Chancellor Timothy P. White on the 2018-19 state budget proposal may be found online at the CSU NewsCenter.

Additional Resources:

Governor's Proposed California Budget for 2018-19
Statement from CSSA on Proposed 2018-19 State Budget
CSU 2018-19 Operating Budget

 

November 2017 Update

As a foundational step in the annual budget process for the California State University and the respective campuses, the CSU Board of Trustees votes to approve an annual operating budget plan that is proposed to the State of California and the Governor.  At the recent November CSU Board of Trustees meeting, the Board adopted a resolution approving the proposed 2018/2019 CSU Operating Budget Plan. 

The 2018/19 plan prioritizes the following uses, which together amount to a total increase in the expenditure budget of $282.9 million.

Proposed Incremental Expenditures Amount
Graduation Initiative 2025 $75.0 million
Employee Compensation $122.1 million
1.0% Growth Full-Time Equivalent Students $39.9 million
Facilities and Infrastructure Needs $15.0 million
Other Mandatory Costs $30.9 million
Total $282.9 million

To fund these commitments, the 2018/2019 operating budget plans for $102.0 million of General Fund revenue per the Governor’s Funding Plan and a $19.9 million net increase in tuition revenue generated from enrollment growth.  To meet the prioritized needs of the CSU, the plan requests an additional $161.0 million in General Fund Revenue to address the funding shortfall. 

Anticipated Revenue  Amount
General Fund Revenue from Governor’s Funding Plan $102.0 million
Net Tuition from Enrollment Growth $19.9 million
Board of Trustees Additional Request $161.0 million
Total $282.9 million

While the CSU’s highest priority is to continue to advocate for and pursue increased state funding to cover the full operating budget request, the state allocation will not be known until a final budget agreement is reached in June 2018.  Until that time, CSU stakeholders will be considering funding alternatives and pursue cost avoidance strategies and administrative efficiencies.  More information will be shared as it becomes available.

Additional details can be found online at CSU 2018-19 Operating Budget.