Show Me the Money


2017-11-08 (3).png

This year tuition has increased, parking permits have increased and there are talks of another potential tuition rise. Students were visibly upset, voicing their concerns to peers and social media, complaining about their empty wallets. Last semester, protesters to the tuition increase shouted, “No justice, no peace, no tuition increase!” outside of the Chancellor’s office; a month later, Associated Students, Inc. student senators sported concerned looks and posed defensive questions as Sharon Taylor, associate vice president of financial management, announced an increased cost of parking permits.

A perception of a dollar-hungry university system comes to mind as demands for costs keep rising. But the university is pretty anemic in funds.

We sat down with Ted Kadowaki, associate vice president of budget and university services, to get a grip on what are students paying for and why the university needs so much funding.

DIG: How are fees allocated throughout the university?

KADOWAKI: Fees are not really allocated separately. They are all just thrown into a resource bucket along with our state appropriation. Those dollars are all fungible. They are not specific to any particular use. Those dollars combined pay salaries, equipment, maintenance and facilities, and utility cost.

DIG: When I checked the Cal State website for tuition at Long Beach, I noticed another tab that said "campus-based mandatory fees" ($988).  What encompasses such fees?

KADOWAKI: There's two different pieces of fees - there's state university fee (tuition fee) - one figure that's the same for every campus in the system. And then there are mandatory campus fees and those are different for every campus. The state university tuition fee is not allocated to a specific one thing or person. Some of those other mandatory fees go to specific uses. So there is a distinction. ... the rate is different for every campus but the categories are all the same. Our campus total happens to be $988 for all of these mandatory fees. The system average is $1,409. We're below the average for campus mandatory fees. The state university fee is the same for all campuses.

DIG: Do students have the ability to choose what they want their fees to go toward?

KADOWAKI: Students do in a sense when there's a referendum, [which] you either vote for it or against it. So in that sense they can choose if they want your fees to go [toward the referendum] or not. There's a long, defined process to getting a referendum on the ballot. [Associated Students Inc.] administers all student referendums. When the student success fee went into place, there was a laborious process to get through that.

DIG: Is there a tab that explains the Long Beach Transit pass? Are students paying for that under their tuition?

KADOWAKI: There's no fee for that. We, the university, are paying for that. We're using part of the fines and forfeitures budget for the passes. Fines and forfeitures are basically tickets that people pay for in parking. We're able to fine people for parking violations but part of the agreement was those revenues, other than to be used for the cost of running that staff and whatnot, would be used for alternate transportation. Some of those dollars are going for the Long Beach transit pass. Some of those dollars are being used for the shuttles, the ones that go off campus especially they go down to the traffic circle where a lot of students live in the apartments. That way they don't have to drive a car to campus.

DIG: On the 2016-17 form that explains the fees, it shows different tuition costs for students taking up to six units ($3,174) and taking six units and over ($5,472). I thought a full-time student takes 12 units. Is there an even higher cost for them?

KADOWAKI: This is a differentiation that has been around for 20+ years. I don't know why it was ever like that. There's more and more discussion about revisiting this and possibly coming up with different categories that make more sense. [But] that's the problem. If you're taking six units, you're paying $5,742 (2017-18 tuition cost). If you're taking 18 units, you're paying [the same price]. Does that seem fair?

DIG: In a CSU Board of Trustees meeting, there was discussion of closing a $100 million deficit and there were talks of a potential tuition increase? Could you explain what the deficit is in?

KADOWAKI: This is the original preliminary outlook of the 2018-19 budget … presented by the Committee of Finance at the Sept. board meeting. They look at incremental changes in the budget. These are all the additions to the existing budget that they feel they need:

  • The Graduation Initiative - trying to get students to graduate in four years - it costs money to do that. They're saying they need $75 million systemwide to advance that initiative.

  • They said if we want to grow the CSU enrollment by 1-3%, it would cost $40-120 million.

  • Currently, there's nothing in the budget request for salary increases for 2017-18.

  • Academic facilities and infrastructure - all our buildings are getting old across the state and we need money to maintain them. They're saying we need $10-25 million.

  • Other mandatory and compensation costs: Mandatory costs are things like increases to retirement, health care, dental care and vision - the normal benefit package. Those costs go up every year. The premiums that the insurance companies charge the CSU go up every year. Our costs as employees go up and so does the cost to the CSU as employers. Compensation costs are employee salary increases for 2018-19 and beyond. There are still compensation increases for 2017-18 that haven't been completed yet. The bargaining process with the unions is still going on. They don't know how much those costs are going to be but they expect there is going to be some costs. That's why the numbers are so high. It's a guesstimate but for compensation cost increases that haven't been finalized yet.

2017-11-08 (2).png

So basically the CSU needs anywhere between $256-377 million of new money.

DIG: So where are the potential funding sources for those needs?

KADOWAKI: The governor has promised $102 million for 2018-19. There would be some additional tuition revenue if we increase enrollment because there would be more students paying fees. Right now, those are the only two semi-sure things there are. The range of additional resources are only $122 million. We still need $134 to $215 million  to do these basic things. And there isn't even anything set aside for employee salary increases at all. So that's the challenge. Last year, because we couldn't get any more money from the state, there was a fee increase. And so that helped bridge this gap. So now the question is: if we can't get any more money from the state, is there another fee increase?

DIG: If there would be another tuition fee increase, would it be enough to bridge the gap?

KADOWAKI: The last fee increase that went into effect this fall generated just about $100 million after setting aside financial aid. It would be close to the bottom end ($134) but not enough.

DIG: What kind of other sources would there be?

KADOWAKI: We're probably looking to have to do some budget cuts. Every campus would have to cut budgets whatever way they seem to be the least worst option.

DIG: When is the budget finalized?

KADOWAKI: The CSU sends in the budget to the governor's office in Dec. The trustees vote on it in Nov. In Jan., the governor issues what's known as a January Budget Proposal, his first preliminary budget of the year. At that time, we have a pretty good sense of what's coming through. And then that January proposal gets reviewed and debated all spring by both sides of the legislature. And then the final budget of the year is required by June 15 to go into effect two weeks later.

The problem for the CSU is that by that time we've already admitted students. We've already hired faculty because of those students. There really is a timing problem. Take another state agency. Take the Department of Motor Vehicles. If they get their budget cut, they just cut hours or make the lines longer by reducing the number of staff or shut down for a day. We can't do that. We've already admitted all these students. We've already hired additional faculty to teach those students. We're making those kinds of decisions pretty soon for next fall. It really puts us in a bind.

DIG: Do we get anything from the federal government?

KADOWAKI: Other than financial aid for the students - pell grants [and Free Application for Federal Student Aid] - we don't get significant funding from the federal government. Most of our funding for normal classroom operations are from the state.

DIG: Let's talk parking. Last semester, it was announced that there would be a rise in parking costs. What exactly is that money being allocated toward?

KADOWAKI: The semester and annual permits - a typical student will pay a fall and a spring parking permit. All those revenues go into the parking operation. From there, the money pays operating costs like parking officers, routine maintenance and costs of equipments and so on. And then the [university] tries to build reserves so that when there's a major project necessary, we have the funds to do it. Parking lot 7 by the library, we had just enough money in reserves to fix that. That used up pretty much all the parking reserves. We used all the money for that project, we don't have enough money for any other project. Other parking lots were falling apart just as fast so we had to hurry up and find a way to increase revenues.

Parking is treated separately because those fees are specifically from parking permits and whatnot. That program was kind of ignored for quite a few years. Nobody looked at the fees. No one really looked heavily at the maintenance costs of the parking lots. And finally about a year or two ago, someone looked at it very carefully and said, 'we've got parking lots that are falling apart and we have no dollars set aside to fix it.' Finally after that analysis was done, it was determined there we need additional fee revenue to do those things. Parking lots don't repair themselves. They do wear off just like streets do and whatnot. After that analysis was done, fees had to go up in order to develop a pot of maintenance funds to do those repairs going forward.

<300x250anim.gif> <728x90anim.gif>