January Cal Poly Budget Presentation UPBAC January 2009

2 Summary of Budget Reductions prior to Governor’s Compact Agreement with the CSU (in Millions) – net of fee increases

January Review of Compact for Higher Education Covers six years – 2005/06 through 2010/11 Adjustments to the base budget: 3% annual increase for 2005/06 – 2006/07 4% annual increase for 2007/08 – 2010/11 An additional 1% annual increase to the base budget for 2008/09 – 2010/11 for equipment, technology, & libraries State will cover annuitant dental benefits, retirement contributions and debt service Identifies importance of restoring more competitive salaries for CSU employees 2.5% growth per year through 2010 – 8,000 FTES/10,000Headcount per year for CSU

January Final Budget Allocations First Year of Governor’s Compact 3% Increase in Operating Funds  Compensation  Technology  Deferred Maintenance 2.5% Enrollment Growth Funding Fee Increase for undergraduate and teacher credential students (8%) and graduate students (10%)

January Final Budget Allocations 3% Increase in Operating Funds  Compensation  Technology  Deferred Maintenance 2.5% Enrollment Growth Funding Fee Increase “buy-out” for undergraduate and teacher credential students (8%) and graduate students (10%)

January Final Budget Allocations 4% Increase in Operating Funds  Compensation  Technology  Deferred Maintenance 2.5% Enrollment Growth Funding Fee Increase for undergraduate, teacher credential and graduate (10%)

January CSU Compensation Funding Shortfall for and CSUCal Poly Note: Bargaining commitments exceeded funding with or without the compact. * A portion of the shortfall was effective June 30, $10,600,000 $613,970 * $30,300,000 $1,746,954

January CSU Budget Negotiations Trustees Request  Based on Governor’s Compact 2.5% for Enrollment Growth $ 68.9M 4% for General Operations 116.9M 1% for Core Academic Support 29.2M 10% Fee Revenue Augmentation 73.1M Governor’s Budget 10% Fee Revenue Increase $ 73.1M Budget Reduction (99.3)M Final Budget – September % Fee Revenue Increase $ 73.1M

January Cal Poly Operating Budget The net of the fee increase and the unfunded mandatory cost resulted in a funding shortfall for Cal Poly of $3,002,082

January Since the Final Budget…. October, 2008  Department of Finance directed state agencies and departments of the need to cut $390 million statewide. For the CSU this amount was $31.3million  For Cal Poly this amount was $1,653,400 November, 2008  Governor proposes an additional $66.3M reduction to CSU Estimated cut to Cal Poly will be $3,500,000 Note: Cumulative reduction very close to the original reduction proposed in the Governor’s Budget ($97.6M vs $99.3M)

January Summary of Budget Reductions

January Situation continues to worsen…..

January Legislative Analyst's Office Report to the Joint Convention of the California Legislature December 8, 2008  Budget Package (September) Flat General Fund spending from to ($103 billion) Reliance on one-time solutions Assumed operating shortfall of $6 billion  Updated November Projections $28 billion problem  $9 billion current-year problem  $19 billion operating deficit in

January Governor’s Special Session Proposals Comes close to addressing shortfalls through

January Legislative Analyst's Office Report to the Joint Convention of the California Legislature If Gap was solved through Tax Increases alone  2 cent sales tax increase  15% personal income tax surcharge  2 percentage point corporate tax rate increase If Gap solved through spending reductions alone  Eliminate funding for UC and CSU  Eliminate funding for welfare payments  Eliminate funding for developmental services, mental health, and in-home supportive services

January Governor’s Budget – CSU (in millions)  10% Fee Revenue Increase$131.6  Special Session Reductions  BSN Nursing Program Increase 3.6  Mandatory Costs  Health, New Space, Energy, Financial Aid Total Surplus/Deficit($15.7)

January Cal Poly Funding vs. National Average

January Cal Poly SUF vs. State Appropriation

January % of High Cost Program SCU’s to Campus Total

January Fee Revenue % of Budget National Average excluding California is 42.5%  California's Average is 30.3% California would have to increase student fees by approximately 69% to equal the national average

January Undergraduate Resident Student Fees at Comparison Universities

January Cal Poly Budget Goals and Principles Goals  Structurally balanced budget supporting: High quality academic programs. High quality faculty, students, and staff. Academic programs consistent with polytechnic mission and the needs of the State of California. Student success demonstrated by high retention and completion of degrees in a timely manner. Support services that demonstrate an adherence to professional and ethical standards. Exemplary care of grounds and facilities.  Compliance with laws, policies, and quality service practices.

January Principles  The Cal Poly budget is decentralized.  Program decisions and budget management are the responsibilities of those assigned with the management and leadership of their campus operating units.  Funding for program priorities is to be addressed first within the vice presidential divisions and, if needed, then through the campus Sources and Uses process.  The President, in consultation with the vice presidents, approves new funding priorities or funding reductions in the Sources and Uses process.  Budget and enrollment decisions are made with the entire campus in mind, including the impact on auxiliaries.  Enrollment must be consistent with available resources, including the campus-based fee revenue.  The University should adhere to an enrollment policy that stabilizes enrollments and minimizes enrollment oscillations.  The University budgetary process should be open and include all constituencies.  Faculty, students, and staff are entitled to timely budget, financial, and enrollment information. Cal Poly Budget Goals and Principles