To: SDSU Faculty and Staff
From: Tom McCarron, Vice President for Business and Financial Affairs & CFO
Subject: SDSU 2018/19 Budget Update

This is the third in a series of informational memos about the SDSU budget. It provides a status update on the fiscal year 2018/19 campus budget process and information about the impact of the final state budget signed by the governor last week.

Campus Budget Process Update 
Campus budget committees have completed their FY2018/19 planning processes based upon an anticipated state appropriation of $92 million to the California State University system, as stated in the Governor’s January proposed budget and no tuition fee increase. The President’s Budget Advisory Committee (PBAC) made FY2018/19 budget recommendations to President Sally Roush on May 10, 2018 and President Roush subsequently approved the recommendations. The approved FY2018/19 campus budget does not include additional funding to be provided to the CSU system by the State of California.

University Operating Budget - FY 2018/19
SDSU’s fiscal year 2018/19 operating budget is $439.6 million of which $411.4 million is comprised of state appropriation, tuition and fee revenue. This $411.4 million is the source of funding for our instruction, instructional support and administrative costs. Compared to fiscal year 2017/18, state appropriations for FY2018/19 is expected to increase by $9.9 million (SDSU’s preliminary estimate), and tuition revenue to increase by $6.8 million. After funding $14.4 million in increased mandatory costs and bargained compensation, $5.6 million in new base funding has been allocated to meet strategic and critical needs such as tenure and tenure-track faculty and lecturer hiring, critical staff hiring, and program support.

The preliminary fiscal year 2018/19 budget continues the practice of conservative revenue budgeting, in which a portion of tuition revenue is not allocated to base budget costs. This practice provides financial flexibility to protect the university against a possible future budget downturn. The funds held back from the base in 2018/19 have been made available as a one-time allocation of $21.2 million in the initial budget for strategic and critical needs such as startup packages for new faculty, classroom and lab renovations, instructional equipment, lecturer and student support hiring.

Current Outlook
Due to the strong advocacy work by the entire CSU community, the CSU system is expected to receive $197.1 million in new recurring funds, instead of the $92 million in the Governor’s January proposed budget, of which $75 million is to be dedicated to Graduation Initiative 2025 and $122.1 is for general university needs. Allocations of base funding to individual campuses will be available later this summer when the Chancellor’s Office issues its final Budget Letter.

The final 2018-19 state budget also includes $161.1 million of one-time funding for the CSU. Of this, $120 million is for a one percent increase in enrollment to be available over a four-year period, $35 million for campus deferred maintenance, and additional funds for specific state priorities such as to support student well-being. Allocations of one-time funding to campuses will be available later this summer as well.

Additional base funding allocated to SDSU as a result of the final state budget will be added to SDSU’s base reserve to build toward a target reserve of $4 million. The President’s Budget Advisory Committee (PBAC), along with the Senate Committee on Academic Resources and Planning (AR&P), will resume in the fall to consider recommendations regarding any additional base and one-time funding allocations to the campus. 

Next steps 
The CSU allocation to the campuses for fiscal year 2018/19 will be available later this summer and we plan to send another update after receiving the final budget letter. In the meantime, we have an approved budget plan for 2018/19.

Thank you for your efforts in support of our university. 

Links to Useful Information:

• PBAC President’s approval
• State Budget Agreement Announcement (June 8)
• Final State Budget (June 27)