January 2009 1

2008-2009Cal Poly Budget

PresentationUPBAC

January 2009

January 2009 2

2002/03 2003/04 2004/05 3 Year Total

CSU ($105.4) ($285.3) ($131.6) ($522.3)

Cal Poly ($0.6) ($14.9) ($7.5) ($22.9)

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

January 2009 3

Review of Compact for Higher Education2004-05

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 2009 4

2005-2006 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 2009 5

2006-2007 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 2009 6

2007-2008 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 2009 7

CSU Compensation Funding Shortfall for 2006-2007 and 2007-2008 CSU Cal Poly

Note: Bargaining commitments exceeded funding with or without the compact.

* A portion of the 2007-2008 shortfall was effective June 30, 2008

2006-2007 $10,600,000 $613,970

*2007-2008 $30,300,000 $1,746,954

January 2009 8

2008-2009 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 2008 10% Fee Revenue Increase $ 73.1M

January 2009 9

2008-2009 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 2009 10

Since the 2008-2009 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 2008-2009 Governor’s Budget ($97.6M vs $99.3M)

January 2009 11

Summary of 2008-2009 Budget Reductions

2008-2009 Summary of Budget Reductions by Division

Division/Area% of Base

2008-2009 Final Sources and Uses Base Reduction

% of Base

October 2008 One-Time Reduction

% of Base

Estimated Mid-year One-Time

ReductionAcademic Affairs: Instruction 1.30% (1,282,710)$ -$ 1.51% (1,495,457)$ Academic Affairs: Other 1.87% (938,672)$ -$ 2.18% (1,094,358)$ Administration and Finance Division Total 1.87% (503,760)$ -$ 2.18% (587,313)$ President's Office & Legal Counsel Total 1.87% (31,054)$ -$ 2.18% (36,204)$ Student Affairs Division Total 1.87% (184,358)$ -$ 2.18% (214,936)$ University Advancement 1.87% (61,528)$ -$ 2.18% (71,732)$ Campus Contingency & Unallocated 1.87% -$ N/A (1,653,400)$ 2.18% -$ Total Reduction -1.30% (3,002,082)$ (1,653,400)$ -1.51% (3,500,000)$

January 2009 12

Situation continues to worsen…..

January 2009 13

Legislative Analyst's Office Report to the Joint Convention of the California Legislature December 8, 2008

2008-2009 Budget Package (September) Flat General Fund spending from 2007-08 to 2008-09

($103 billion) Reliance on one-time solutions Assumed 2009-10 operating shortfall of $6 billion

Updated November Projections $28 billion problem

$9 billion current-year problem $19 billion operating deficit in 2009-10

January 2009 14

Governor’s Special Session Proposals

Comes close to addressing shortfalls through 2010-2011

2008-2009 2009-2010Revenue Increases1.5 cent sales tax (three years) $3,540 $6,643Other (ongoing) $1,180 $2,943Totals $4,720 $9,586

Expenditure SavingsPropositions 98 $2,500 $729All Other $2,004 $5,391Totals $4,504 $6,120

(in Millions)

January 2009 15

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 2009 16

2009-2010 Governor’s Budget – CSU(in millions) 10% Fee Revenue Increase $131.6

Special Session Reductions -66.3 BSN Nursing Program Increase

3.6 Mandatory Costs -84.6

Health, New Space, Energy, Financial Aid

Total Surplus/Deficit ($15.7)

January 2009 17

Cal Poly Funding vs. National Average

21.6%

12.3%42.5%

66.0%57.5%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Cal Poly National Average (2004-05)

State University Fee Cal Poly's Other Fees/Tuition State Appropriation

January 2009 18

Cal Poly SUF vs. State Appropriation

10.1%19.2%

26.6%

89.9%80.8%

73.4%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

1987/88 1997/98 2007/08

State University Fee State Appropriation

January 2009 19

2005-06 % of High Cost Program SCU’s to Campus Total

SLO

San Jose

Humboldt

Pomona

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

0 5 10 15 20 25

January 2009 20

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 2009 21

Undergraduate Resident Student Fees at Comparison Universities

January 2009 22

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 2009 23

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