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«CALIFORNIA STATE UNIVERSITY THE OFFICE CHANCELLOR O F TH E September 29, 2016 BAKERSFIELD CHANNEL ISLANDS Mr. David Lopez, President Ms. Isabelle ...»

-- [ Page 1 ] --

CALIFORNIA STATE UNIVERSITY

THE

OFFICE CHANCELLOR

O F TH E

September 29, 2016

BAKERSFIELD

CHANNEL ISLANDS

Mr. David Lopez, President

Ms. Isabelle Franz, Chair, Board of Directors

CHICO

California State Students Association

401 Golden Shore

DOMINGUEZ HILLS

Long Beach, California 90802 EAST BAY

Dear David and Isabelle:

FRESNO A tuition increase is a painful step that I hope – with your assistance – we can avoid. The California State University remains committed to our joint advocacy efforts to that effect.

FULLERTON Indeed, as we have shown the past few years, the work of the California State Student Association on the Stand with CSU campaign demonstrated the significant power of student HUMBOLDT voices.

LONG BEACH We continue to explore every option to keep costs low for our students and their families. At the same time, we are committed to the goals of Graduation Initiative 2025, which include LOS ANGELES facilitating more timely completion of degree while continuing to provide students with an education of substance – in preparation for a lifetime of personal and professional success.

MARITIME ACADEMY

Ultimately, this important work supporting our students’ success requires student-focused resources for faculty, staff and facilities.

MONTEREY BAY

At this early point in the 2017-18 budget process, we must keep all options open.

NORTHRIDGE Consequently, attached is a proposal on possible student tuition for 2017-18 that addresses the matters raised by the Working Families Student Fee Transparency and Accountability POMONA Act. I also seek to arrange a meeting to discuss this proposal and other items related to the legislation on October 5, 2016.

SACRAMENTO I will continue to rely on your voice as we tackle the tough issues raised in this budget cycle.

SAN BERNARDINO

I remain – as always – committed to the work we are doing together to build California’s future.

SAN DIEGO Sincerely,

SAN FRANCISCO

SAN JOSÉ Timothy P. White

SAN LUIS OBISPO

Chancellor SAN MARCOS TPW/ef SONOMA c: Dr. C. Rob Shorette, Executive Director, California State Student Association STANISLAUS 401 GOLDEN SHORE • LONG BEACH, CALIFORNIA 90802-4210 • (562) 951-4700 • Fax (562) 951-4986 Possible 2017-18 Tuition Proposal for

Consideration:

Prepared for the California State Student Association September 29, 2016 Amended October 5, 2016 (see footnote pg.1)

–  –  –

Contents 1 The California State University (CSU) is initiating consultation with the California State Student Association (CSSA) on consideration of a possible tuition increase as part of the 2017-18 support budget plan. If approved, the increase would take effect in fall 2017.

In keeping with the timeline and requirements of the Working Families Student Fee Transparency and Accountability Act, the following information is included for your consideration and to begin conversations as part of the consultative process with the CSSA.

The Working Families Student Fee Transparency and Accountability Act is codified in Sections 66028 through 66028.6 of the California Education Code. The act requires the CSU to first consult with the CSSA before any increases to mandatory systemwide tuition are considered by the Board of Trustees (Board) and to ensure transparency in the process. The following areas are addressed to begin the

conversation about this proposal:

1) Justification for a possible tuition increase proposal including facts supporting the increase

2) A statement specifying the purposes for which revenue from the potential increase would be used

3) A description of the efforts to mitigate the impact of any potential tuition increase on financially-needy students

4) The potential impact to students including but not limited to:

a. Changes to the minimum workload burden for all students b. Institutional financial aid awards c. Average student loan debt

5) Alternative proposals that could be considered in lieu of a potential tuition increase To orient the reader, each section of this document is numbered and identified according to the five required pieces identified above.

In addition to this required information, the CSU also provides the following:

• Potential Systemwide Tuition and Fee Changes for the 2017-18 Academic Year

• Timeline The original version of this document included potential maximum tuition levels for undergraduate, credential and graduate programs. This amended version reflects the original intent that potential maximum tuition levels would also apply to doctoral and graduate business professional programs and non-resident tuition. This clarification was discussed at the consultation meeting of the CSU and the CSSA on October 5, 2016. Clarifying edits are underlined and limited to pages 5, 9, 11 and 12.





–  –  –

1) JUSTIFICATION FOR A POSSIBLE TUITION INCREASE

Context Over the last two decades, state tax revenues that support public higher education institutions have significantly fluctuated—with a trend toward a decrease in real dollars—across the country and within California. This decline came as states responded to the condition of the economy and shifted public dollars to other priorities.

The decrease in public investment has come at a time of increased student and industry demand for bachelor’s, master’s and other advanced degrees. Universities—including the California State University—have responded over the past two decades by making programmatic cuts while increasing tuition and fees in order to balance budgets. These cuts, coupled with shifting of costs from states to students and the connected reduction in educational opportunities for students were unfortunate, yet necessary, steps to continue to operate quality programs.

State investment in support of the CSU has moved from approximately 80 percent in the mid-1990s to closer to 50 percent by 2016-17, with the remaining revenue provided by tuition and fees. In spite of this fiscal trend, the CSU has remained committed to providing students a high-quality education and admitting qualified students from California’s high schools and community colleges.

The CSSA has been a dedicated partner advocating with the CSU for increased state investment. Over the last four years, these advocacy efforts have coincided with an important increase in state tax revenues, which recovered by $33.2 billion between the low point of the recession and today. However, the CSU is only now, as of 2016-17, funded at prerecession levels of 2007-08—despite serving 20,000 additional students.

Also over the past four years, the CSU consistently made support budget requests that would reinvest in our most critical priority areas, yet only once in the last four years since the worst days of the recession has that request been fully funded. Put another way, the state did not fund a total of $425 million of recurring funding requested by the CSU since the recovery began (see below figure).

The governor’s multi-year funding plan for the CSU from 2013-14 through 2016-17 provided increases in general fund support with a caveat requirement that tuition be held at 2011-12 levels. These state funds have allowed modest recoveries in course sections, faculty and staff hires, technology and infrastructure, while providing employees with salary increases for the first time since the beginning of the recession.

Based on recent information from the governor’s administration, the governor will likely propose an increase of $157.2 million to the CSU support budget for 2017-18. This will continue the limited and incremental nature of investment that has dominated state funding for the CSU during California’s recovery.

–  –  –

2017-18 CSU Support Budget Each September, the Board considers the preliminary support budget request and identifies funding priority areas. A final support budget request is brought before the Board in November for approval and is then submitted to the governor and legislature for their consideration.

During their meeting on September 20-21, 2016, the Board considered a preliminary support budget request that identified major priority areas. Current estimates indicate that these priority areas would require investment of $346 million in new revenue. At this time, the CSU anticipates the governor will allocate $157.2 million in new funding to the CSU in his January budget proposal. This leaves about a $168.8 million funding gap between anticipated state funding and the real needs of the university.

Board of Trustees Priorities:

Graduation Initiative 2025: The CSU is committed to improving the opportunities for a more I.

timely graduation for all our students, including a doubling of the four-year graduation rate from 19 percent to 40 percent, achieving a 70 percent six-year graduation rate, shortening time to degree for transfer students, and closing the achieving gap among low income and underserved students. While these goals are important indicators of the overall effectiveness of the system, Page 3 of 13

POSSIBLE 2017-18 TUITION PROPOSAL FOR CONSIDERATION:

PREPARED FOR THE CALIFORNIA STATE STUDENT ASSOCIATION

the tools and strategies that will help support more students earning degrees in a timely manner are directly tied to the ability to invest new funding to improve tenure-track faculty hiring, student-advisor ratios, eAdvising platforms, college readiness and use of data to ensure resources are dedicated to the most important factors leading to overall student success.

Enrollment Growth: The CSU confers the most baccalaureate degrees in the state and II.

contributes to the California workforce in significant ways. Increased enrollment funding contributes to new sections of high-demand courses, hiring new tenure-track and temporary faculty, providing more academic and student support services, and bolstering overall institutional support and operation of the campus to serve additional students. With a total student body of more than 470,000 students, the CSU continues to see increased demand from qualified applicants each year.

Academic Facilities & Campus Infrastructure: Leading-edge academic facilities support quality III.

degree programs setting the stage for CSU graduates to be workforce ready and equipped to excel in their chosen field. CSU campuses have several of these academic and laboratory spaces, but a significant portion of CSU facilities are dated. Specifically, fifty-five percent of all CSU buildings are more than 40 years old. Every campus can point to a classroom building or a piece of critical infrastructure that has fallen into disrepair. While the CSU has maintained its buildings as best as it could with available funding, the state funded most of the costs associated with the construction and maintenance of academic buildings and campus infrastructure. The state shifted this obligation to the CSU in 2014, making facilities and infrastructure a significant consideration when developing and implementing the CSU support budget. Dedicating a portion of the CSU support budget to facilities and infrastructure is essential to allow the most pressing facility and infrastructure needs on campuses to be addressed.

Employee Compensation: Central to the student experience is the ability to interact, learn from IV.

and be guided by outstanding faculty and staff. The CSU is proud of our thousands of employees who are dedicated to our students and their success. As such, compensation increases are a significant priority for the CSU in order to remain competitive to recruit and retain faculty, staff and administrators who are committed to students’ well-being and academic success.

Mandatory Costs: Mandatory costs are the expenditures in the operating budget that increase V.

annually due to inflation and other state, federal or statutory mandates that apply to the CSU.

These include changes in the cost of health care and retirement for employees, changes in state and federal wage laws—including a multi-year incremental increase in the minimum wage—and the increased cost of operating and maintaining new facilities. Without funding for mandatory cost increases, campuses would have to make cuts and redirect resources from other program areas to meet these obligations.

–  –  –

Possible Tuition Proposal for Consideration To ensure the university has all revenue options available to meet its 2017-18 priorities, the CSU must begin a conversation about a possible tuition increase. The process to potentially increase tuition begins with notification and this submittal to the CSSA.

In the coming months, appropriate consultation with and feedback from the CSSA and other CSU stakeholders on this possible tuition proposal will be aligned with CSU’s shared governance model and considered by the Board. At the same time the CSU will engage with the CSSA, Academic Senate and other stakeholders to advocate for full funding of the CSU’s support budget request.

It is anticipated that this consultation period will include an information item at the November 2016 Board meeting and an action item at the January 2017 Board meeting. The state budget cycle is asynchronous from the planning decisions of the CSU, as well as the planning that current and potential students must undertake to prepare for the 2017-18 academic year. Specifically, the outcome of the 2017-18 budget cycle will not be known until June 2017. To provide students and their families adequate time to plan, and to ensure the CSU is in alignment with the law, the administration, the Board, and all constituents must begin a conversation regarding tuition now. If a tuition increase is approved by the Board at their January 2017 meeting, the tuition increase would go into effect for the fall 2017 term and apply to the full 2017-18 academic year.



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