SDSU Budget Outlook
This is the first of a series of informational memos about the SDSU Operating Budget. This memo provides information about SDSU's current budget and the budget process for the CSU and SDSU 2018/19 budgets. Updates will be provided throughout the spring semester as new information becomes available and developments occur.
Total University Budget:
SDSU’s fiscal year 2017/18 total budget, including all auxiliaries, is $894.2 million, an increase of $51.6 million or 6% compared to fiscal year 2016/17.
Current Outlook: University Operating Budget - FY 2017/18
The Operating Budget outlook for the current fiscal year 2017/18 is stable. Key factors include:
- Summer enrollment increased by almost 20% in 2017 over the previous summer as part of a Student Success initiative.
- Fall 2017 enrollment and revenue were in line with targets.
- We anticipate similar outcomes for both enrollment and revenue in spring 2018.
Overview: University Operating Budget - FY 2017/18
SDSU’s fiscal year 2017/18 operating budget is $415.8 million of which $390.5 million is comprised of state appropriation and tuition and fee revenue. This $390.5 million is the source of funding for our instruction, instructional support and administrative costs. Compared to fiscal year 2016/17, state appropriations this year increased by $10.6 million, and tuition revenue increased by $11.5 million inclusive of a 5% fee increase. After funding $17.3 million in mandatory costs and bargained compensation, $5 million in new base funding was allocated to meet strategic and critical needs such as tenure and tenure-track hiring, a new university graduate fellowship program and other priorities associated with the university’s strategic plan.
The fiscal year 2017/2018 budget continues the practice of conservative revenue budgeting, in which a portion of tuition revenue is held back from allocation to base budget costs. This practice provides financial flexibility as a hedge against a possible future budget downturn. The funds held back from the base in 2017/18 were made available as a one-time allocation of $19.5 million in the initial budget for strategic and critical needs such as startup packages for new faculty, classroom and lab renovations, lecturer hiring, and HVAC replacement in the North Life Sciences Building.
Additionally, employee compensation obligations were conservatively estimated and budgeted in the initial 2017/18 budget because of several open collective bargaining agreements. The final outcome of our recent collective bargaining agreements resulted in available funding. An additional $2.5 million in base budget funding has been made available for allocation this spring, along with $14.8 million in one-time funding.
The President’s Budget Advisory Committee (PBAC), along with the Senate Committee on Academic Resources and Planning (AR&P), has initiated a schedule and process for making recommendations regarding the additional funding. As the committees discuss, review and then vote on recommendations for allocations of these funds, further budget updates will be provided.
CSU Operating Budget: FY 2018/19
The CSU Board of Trustees met on September 19-20, 2017 to begin the planning process for the fiscal year 2018/19 CSU Operating Budget. The board met again in November and initiated the legally required process of notifying the California State Student Association of a possible tuition increase. The governor’s funding plan for the CSU system at that time was projected to provide the CSU system an increase of $102 million.
On January 10, 2018, the governor released his proposed state budget, which included an increase of only $92 million for the CSU. This amount falls far short of the Trustees’ budget request for $282.9 million.
The CSU Board of Trustees met on January 30-31 and discussed different approaches to address the funding gap pursuant to Governor Brown’s proposed budget for 2018/19. In the coming months, CSU’s first priority and commitment is to seek additional state funding and make the case with lawmakers and the governor that additional investment in the CSU is necessary and in the best interest of the state and our students. The CSU Trustees will not be asked to raise tuition, if it becomes necessary, until May at the earliest. This will allow time for a deeper understanding of the state’s financial outlook, as well as time to make CSU’s case to policymakers and to evaluate the efforts undertaken to streamline operations across the university. While the CSU continues to advocate for additional state funding, the enrollment targets for 2018-19 will remain unchanged from 2017-18 levels.
The budget gap and its impact on the CSU will continue to be evaluated throughout the spring as the legislature convenes. We expect the state budget to be finalized in June.
SDSU Budget Process: FY 2018/19
The governor’s proposed budget for the CSU system creates the possibility of budget challenges for 2018/19. Even with a 4% tuition increase effective for fall 2018, the system would face a shortfall in funding needed to cover negotiated salary increases, projected mandatory costs, the Graduation Initiative 2025 and any enrollment growth that may be contemplated system-wide.
Part of our “budget watch” activities over the next four months will include a series of discussions on campus. We will present current and developing information about the budget and outline the process for developing, discussing and recommending a final SDSU 2018/19 budget.
San Diego State University has a long history of prudent budget management, including the practice of holding back a portion of tuition revenue from base budget uses. Consequently, it is likely that we may be able to cover any shortfall in 2018/19 state appropriation funding through the tuition revenue we have typically held back from base uses. Toward that end, if spring 2018 tuition revenue is in line with projections, we will discuss the advisability of not allocating the resulting one-time revenue until there is a definitive decision about the 2018/19 budget for the CSU system.
Conclusion
While the remainder of 2017/18 looks stable and in line with targets, 2018/19 is less certain. There are many factors and much is still unknown at this time. We will continue to keep you updated. Our university has faced budget uncertainty in the past. Thanks to the collective efforts of faculty and staff, we will continue to meet those challenges effectively. I offer my sincere thanks to each member of the SDSU community for your dedication to our students and our university.
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