The California State University Board of Trustees voted on March 22 to increase tuition by 5 percent, but the tuition increase won’t entirely fix the support budget shortfall; the CSU still needs over $90 million of additional funding from the state. While students will be paying more, there is no guarantee that the state will provide funding for the rest of the deficit.
The approval to charge students an additional $270-438 annually, based on graduate level, in tuition will only cover less than half the total amount of the $167.7 million shortcoming, according to data given to the Daily 49er by Ted Kadowaki, associate vice president of budget and university services.
In November, the CSU submitted its budget request of $343.7 million of additional funding for the 2017-18 year to the state of California and in January, Gov. Jerry Brown released his proposed state budget and gave the CSU $157.2 million of additional funding. If this is all the CSU gets, it will need to use that for compensation for existing faculty and staff contracts and mandatory cost increases for healthcare and other benefits, which cost $139.1 million and $26 million, respectively.
“That means we have no money at all for the graduation initiative, which is more classes and more faculty to get students through quicker, no money at all for any enrollment growth, no money at all for compensation for employees who don’t have existing contracts and no money for academic facilities and infrastructure,” Kadowaki said.
According to CSU spokesman Michael Uhlenkamp, the new revenue is already earmarked to alleviate the need for the graduation initiative, but not the rest.
“Of the revenue provided by the tuition increase, about $77.5 million, it goes specifically to the Graduation Initiative 2025, which means we’re hiring more faculty and offering more classes and reducing time to degree,” he said.
During the spring, hearings will occur in Sacramento and in mid-May, Gov. Brown will send out the “May Revise.” By the end of June, the governor will have to approve an official budget.
Unless Gov. Brown funds the CSU system with the amount they are asking for, the Board of Trustees’ decision to increase tuition will stand.
“That mantra that students have come up with, ‘the more we pay, the longer we stay,’ I think that’s right on point,” Kadowaki said. “If we can get them out quicker by hiring more faculty, by offering more class sections, then the less they pay.”
Members of the BOT who did not agree with the tuition increase tried putting forward the idea to delay the vote on the tuition hike, but with no other viable way to make up the money, the board was forced to make the decision to have students foot the bill until Gov. Brown releases the budget in June. If California funds the CSU to the amount needed, the BOT will rescind the tuition hike, according to Uhlenkamp.
“What’s frustrating here is that we’re so predictable,” said Lieutenant Governor Gavin Newsom at the BOT meeting, in disagreement with the increase. “We did [the state’s] bidding for them, we increased $77.5 million revenue … so now they’re off the hook. We’ve become predictable and as a consequence, we continue to burden more and more debt on the backs of our students.”
According to Kadowaki, the reason the vote on the tuition increase could not be delayed is because the CSU needs to cover the deficit now, while students are registering for next fall’s classes and getting their financial aid packages.
Other than increasing state appropriations and hiking tuition, the only other option for addressing the shortfall is reducing costs, according to the Budget Report revised in December. Kadowaki said that Cal State Long Beach constantly analyzes and reviews their expenditures for places they can cut down.
“We’ve pretty much taken off all the fat off the bone, if you will,” Kadowaki said. “We’ve made a lot of cuts, we eliminated a lot of things and we got down to the bare minimum. At this point, we’re still looking for efficiencies, but we’ve implemented about as much as we can without severely impacting services and classes.”
To cover the entire need, Kadowaki estimated that the tuition increase would’ve had to have been about double what it was. Uhlenkamp has assured that there is no way tuition will rise again this year. The rest of the $90 million will need to come from the state or the CSU will have to decide on more cuts.
“We will continue to advocate to meet with legislators and the governor to increase the budget,” Uhlenkamp said. “The May Revise will happen, and the state department might say things are looking a bit rosier and fully fund us … We’re absolutely concerned about [the $90 million needed] and if we don’t receive it, then we’ll have to make some tough decisions regarding enrollment growth, facilities and employee compensation.”
One way the budget could turn out is that Gov. Brown could see the tuition increase as a permanent change and only give the difference of the shortfall on top of the amount already promised in the proposed budget.
“The hope is that between now and June, the governor provides the CSU with additional funding, thereby not needing that fee increase revenue,” Kadowaki said. “The lobbying efforts are ongoing in Sacramento … If we can convince them that the dollar amount that they didn’t fund from the request is priority, then they’ll fund that.”
Although this is the best case scenario for the CSU system, it is the least likely. Two years ago, CSUs got a budget increase to exactly what they requested and it will be hard to get another while competing with other agencies, Kadowaki said.
Part of the deficit comes as a result of the increase in faculty salaries last year. According to Kadowaki, the funding for the pay raises this year came from a reserve of one-time campus funds that are now depleted.
“All employees went without increases for quite a few years so frankly, we were losing a lot of talented faculty because of that. They were going elsewhere and getting a lot higher pay … I don’t think [the BOT] had a choice [in raising faculty salaries].”
According to Uhlenkamp, the CSU Employees Union, a group represents about 15,000 staff member across the 23 campuses, is in collective bargaining talks right now for their contract that expires in June and the budget deficit could disrupt that. CSULB’s share of the shortfall amounts to $999,003, according to the Budget Report.