1. URPC Budget Update January 29, 2016

2. CA Governor’s Budget Reflects ongoing economic recovery o Projects economy will continue to grow in 2016 and 2017 Conservative due to potential for recession in a few years Prioritizes reserves and one-time spending with discretionary resources

3. Source: 2016-17 Governor’s Budget

6. Governor’s Budget Discretionary Spending ($7.3 billion) Source: LAO’s 2016-17 Overview of the Governor’s Budget $3.1 $2.3 $.8 $1.1 (in Billions) CSU & UC

7. Governor’s Budget for CSU  +$140.4 million General Fund Increase $125.4 million (4%) multi-year plan increase $15 million from changes to Middle Class scholarship program Tuition must remain flat  +$35 million (one-time) for deferred maintenance  +$35 million (one-time) for cap and trade energy projects  $101 million short of CSU Support Budget Request Impact: Very limited discretionary funding

8. Source: CSU 2015-16 Budget Planning Slide

9. 2016-17 CSU Support Budget Request

10. What it means for HSU Minimal discretionary funding available Covers mandatory cost increases o 2% compensation pool o Retirement and health benefit increases 1% funded enrollment growth

11. Cabinet Priorities: New Allocations Advance the Strategic Plan Invest in Institutional Assets Sustain the future (Contingency and Reserves)

12. President’s Charge to URPC Develop a strategic budgeting approach that aligns resource allocations with strategic planning by the end of the 2015-16 academic year. A set of guiding principles for strategic budgeting, including definitions and guidelines for budget categories; (Finalizing) Proposals for appropriate policies to support strategic budgeting; (Need to do) A recommended framework for evaluating existing base budgets (Need to do) Recommended processes that integrate institutional data and assessment with resource requests; and (Lisa C.’s Workgroup) A revised proposal for a reserve policy. (Need to do)

13. Next Steps Cabinet Develop 2016-17 Budget URPC Continue to build out strategic budgeting framework

14. Budget Planning Focus as We Move Forward Five year planning horizon ->Need to shift to planning for two years out Convergence of strategic plan and strategic budgeting Budget is still incremental ->Need to link to strategic categories 2 Year Concept 16-1717-1818-1919-2020-21 Plan 18-1919-2020-2121-2222-23 Reaffirm 18-1919-2020-2121-22 Implement

15. Jim Collins Quote: The purpose of budgeting in a good-to- great company is not to decide how much each activity gets, but to decide which arenas best fit with the Hedgehog Concept (core mission) and should be fully funded and which should not be funded at all. “Stop doing” lists are more important than “to do” lists.