CSU | Public Affairs | Compact with Governor = Release

From: Subject: CSU | Public Affairs | Compact with Governor Release Date: Tue, 11 May 2004 15:17:13 -0700 MIME-Version: 1.0 Content-Type: multipart/related; boundary="----=_NextPart_000_0000_01C4376B.09B8A260"; type="text/html" X-MimeOLE: Produced By Microsoft MimeOLE V6.00.2800.1409 This is a multi-part message in MIME format. ------=_NextPart_000_0000_01C4376B.09B8A260 Content-Type: text/html; charset="Windows-1252" Content-Transfer-Encoding: quoted-printable Content-Location: http://www.calstate.edu/pa/news/2004/compact.shtml CSU | Public Affairs | Compact with Governor = Release


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California State University, = University of=20 California and Gov. Schwarzenegger Reach Agreement on Long-term = Funding=20 Plan for 2005/06 to 2010/11

The =93Compact=94 will provide CSU = with funding=20 for enrollment growth and salary increases that will allow CSU to = maintain=20 quality and access for students

Contact: Colleen Bentley-Adler, (562) 951-4801,=20 cbentley-adler@calstate.edu

(May 11, 2004) =96 Governor Arnold Schwarzenegger, California = State=20 University Chancellor Charles B. Reed and University of California = President Robert C. Dynes today reached agreement on a six-year = =93Compact=94=20 that will ensure quality, access and affordability at the = nation=92s top=20 public university systems.

The Higher Education Compact also recognizes the overwhelming = demand=20 for student access and proposes to fund 2.5 percent annual = enrollment=20 growth through 2010/11, ensuring educational opportunities for an=20 additional 8,000 CSU students and 5,000 UC students per year. = These funds=20 will allow both systems to stem the student enrollment decreases = that each=20 has been experiencing because of the state=92s fiscal crisis.

The Compact, which will take effect in 2005/06 and continue = through=20 2010/11, will provide the CSU and the UC systems a 3 percent state = General=20 Fund increase in 2005/06 and 2006/07.

Beginning in 2007/08 and through 2010/11, the state will = provide an=20 increase of 4% to the prior year's base budget for basic needs = including=20 salary increases, health benefits, maintenance and inflation.

=93Gov. Schwarzenegger is to be congratulated for his = exceptionally=20 strong commitment to higher education, particularly given that the = state=20 still is experiencing fiscal difficulties. He clearly knows = CSU=92s and UC=92s=20 impact on the state=92s economy, and recognizes that to keep the = state=20 strong, higher education must continue to produce graduates for = the=20 workforce and to provide research capabilities and community = service that=20 benefit the state and its residents,=94 said CSU Chancellor = Reed.

=93We also want to thank members of the state Legislature for = their=20 continued support of the CSU, and for keeping the public informed = of the=20 budgetary issues facing higher education. We look forward to = working with=20 them on this year=92s budget and into the coming years when the = Compact is=20 in effect. Together, we can keep the quality high in our = educational=20 institutions,=94 Reed said.

=93I applaud President Dynes and Chancellor Reed, and everyone = involved=20 for helping to get us through the worst of our budget crisis. = Together, we=20 have found a compromise that will protect the quality of our=20 world-renowned higher education system. We have made a long-term=20 commitment for greater investments in our schools and equipping=20 California=92s workforce with the best and the brightest for years = to come,=94=20 said Gov. Schwarzenegger.

By providing fiscal stability in the initial two years of this = Compact,=20 the state will prevent further erosion of support for higher = education.=20 Funding commitments in the third year and beyond reflect the = Governor=92s=20 belief that the state will experience moderate economic growth. = This will=20 allow some recovery for CSU and UC, such as improving salaries and = addressing several years of under-funding of core programs.

=93Economic growth, the health of our people, and our = collective quality=20 of life as Californians all depend in large part on the teaching = and=20 research being done in our universities. They are where ideas = start, where=20 new jobs start, where cures to disease start, and where better = futures=20 start,=94 said UC President Dynes. =93This compact provides the = support that=20 will allow our faculty, staff, and students to preserve and = enhance that=20 positive impact on the lives of all Californians.=94

In exchange for the commitment of funds, both CSU and UC have = agreed to=20 a series of accountability measures, and will make annual reports = to the=20 Governor, Secretary of Education, fiscal committees of the = Legislature,=20 the Legislative Analyst=92s Office and the Department of Finance = by October=20 of each year.

Student Fees:
While most of the Compact does not = apply to=20 2004/05, student fees are mentioned specifically. The Compact = proposes a=20 three-year level of fee increases for CSU and UC undergraduate = students=20 that will average 10 percent in each of the coming three years. In = 2004/05, student fees will increase 14 percent, and in 2005/06 and = 2006/07, they will increase 8 percent each year.

For graduate students, the fee levels are different at CSU and = UC. At=20 CSU, in 2004/05, graduate fees will increase 25 percent, except = that=20 teacher credential candidate fees will increase 20 percent. At UC, = graduate student fees will increase 20 percent in 2004/05. For the = following two years, it is expected that both CSU and UC graduate = fees=20 will increase by no less than 10 percent.

The CSU Trustees must vote on the 2004/05 fee increases. Action = is=20 expected at the May 19 board meeting. If approved, undergraduate = fees=20 would increase by $288 (14 percent), qualified credential program=20 participants by $450 (20 percent) and all other post-baccalaureate = and=20 graduate students by $564 (25 percent). One fifth of the revenue = from=20 these fee increases will be set aside for State University Grant = financial=20 aid.

The Schwarzenegger administration expects both CSU and UC = graduate=20 student fees to eventually reach levels that make them 50 percent = higher=20 than undergraduate fees in recognition of the cost of these = programs and=20 the expected higher earnings these students will make once in the=20 workforce.

In the years 2007/08 to 2010/11, the Governor has recommended = that any=20 fee increases be tied to an annual California per capita personal = income.=20 However, he has given the two systems=92 governing boards, the CSU = Trustees=20 and the UC Regents, the power to exceed that number if fiscal=20 circumstances warrant, but not above 10 percent in any given year. = Given=20 that the CSU had a net reduction in the General Fund Budget of 20 = percent=20 over the last three years, the CSU may have to adjust fees at the = higher=20 level to make up for the lost revenue and to enhance quality for = students.=20

=93This Compact, when fully funded, has the potential for = providing=20 long-term student fee stability that is an overwhelming benefit to = students and their families,=94 said Richard P. West, CSU = executive vice=20 chancellor and chief financial officer. =93However, the Compact = also=20 includes a critical recognition by the Governor that our board may = need to=20 increase fees higher in some years to maintain quality and = preserve=20 programs, so we are grateful to the governor for having the = foresight to=20 think about the future.=94

The Governor also has asked both CSU and the UC to develop = higher fees=20 for students who take considerably more units than required for = their=20 degrees.

=93The CSU is working on a multi-pronged policy that will = benefit=20 students in the areas of articulation, advising and counseling, so = that=20 all students will have a clear path to the courses they need to = take to=20 graduate,=94 Reed said.

Enrollment:
The Compact calls for a General Fund = increase to=20 the CSU budget beginning in 2005/06 to support a 2.5 percent = growth in=20 student access, or about 8,000 students annually.

This growth will allow the CSU to return to the higher = enrollment=20 growth trend line projected by the Department of Finance. In = addition, the=20 Compact calls for state supported summer sessions that eventually = will=20 serve about 40 percent of the students who take classes in the = fall and=20 spring terms.

CSU currently enrolls about 410,000 students but will decrease=20 enrollment by up to 5 percent in 2004/05 (a non-Compact year) = because of=20 cuts proposed in the Governor=92s January budget.

Core Academic Needs:
Gov. Schwarzenegger has also = committed=20 to an additional 1 percent growth in CSU and UC budgets in = 2008/09,=20 2009/10 and 2010/11. These funds will address the annual budgetary = shortfalls in state funding for other instruction and research = support=20 critical to maintaining the quality of the academic program such = as=20 instructional equipment, instructional technology, libraries and = building=20 maintenance.

Capital Outlay:
The state will provide funding for = debt=20 service to support general obligation bonds of $345 million per = year per=20 segment to be used for high priority projects that address seismic = and=20 life-safety needs, enrollment growth and modernization of = out-of-date=20 facilities. The state will commit to support similar amounts over = the life=20 of the Compact.

One-Time Funds:
As the fiscal situation permits, and = one-time=20 funds become available, the state may provide one-time funds to = address=20 high priority infrastructure needs, such as capital renewal of = facilities=20 and deferred maintenance needed to maintain the segments=92 = capital assets.=20 For CSU, at least $141 million per year is needed for systematic = capital=20 renewal of existing facilities and utilities, and the deferred = maintenance=20 backlog for high-priority projects exceeds $365 million.

Long-Term Goals for Accountability:
Given the past = three=20 years of budget cutbacks, the governor is giving the CSU and UC = some=20 latitude in meeting all accountability expectations. However, he = is=20 requiring the CSU and UC to collect specific data and begin to = develop an=20 annual report on specific accountability measures in exchange for = the=20 funds provided by the Compact.

Some of those areas include: efficiency in graduating students, = including number of degrees and time-to-degree; utilization of = system-wide=20 resources such as student/faculty ratio and change in employee = salaries;=20 student-level information, including student proficiency levels = and=20 progress on achieving community colleges course articulation = agreements;=20 and capital outlay, including five-year plans with priorities by = campus.=20

The CSU and UC had agreements similar to Gov. = Schwarzenegger=92s Compact=20 with previous Governors Davis and Wilson. Like Gov. = Schwarzenegger, they=20 also recognized the value of higher education to the state=92s = economy.=20 Under those agreements and this one, the CSU and UC are expected = to=20 continue to raise private funds to enhance the quality of their = education,=20 and to seek contracts and grants for research activities for = faculty,=20 staff and students to enhance the state=92s vitality.

For additional information on the Compact, please see: www.calstate.e= du/BudgetCentral/index.shtml

The California State University is the largest system of senior = higher=20 education in the country, with 23 campuses, about 410,000 students = and=20 44,000 faculty and staff. Since the system was created in 1961, it = has=20 awarded about 2 million degrees, about 77,000 annually. The CSU is = renowned for the quality of its teaching and for the job-ready = graduates=20 it produces. Its mission is to provide high-quality, affordable = education=20 to meet the ever-changing needs of the people of California. With = its=20 commitment to excellence, diversity and innovation, the CSU is the = university system that is working for California. See http://www.calstate.edu/ =

Content = Contact:
Public=20 Affairs
publicaffairs@calstate.edu=

Technical=20 Contact:
webmaster@calstate.edu

Last Updated: May 11, = 2004

Public Affairs=20 Home

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