Cal State University system hikes fees to offset tuition freeze

What a difference five years makes.

In 2010, the California State University system issued $352 million in revenue bonds. Earlier this month, it issued $1.1 billion of the same thing. The debt issuance is standard, generally considered to be part of the process to keep pace with growth. And financial disclosures are rich with information; people can go to prison for lying on these things.

Comparing the two issuances is a tour of the massive growth of the education industrial complex, a waltz through the luxury world of public, higher education.

Sky-rocketing revenues

According to the bond filings, gross revenues in the system more than doubled in the last 10 years, from $608.7 million in 2005 to $1.57 billion in 2014. The increases were generated across the board, in fees from parking to health facilities to the student union, and from continuing education to housing.

The revenue has started flowing from places other than tuition, which has remained the same since 2011 after increasing 60 percent for full-time undergrad students between 2005 and 2009 to $4,026.

Those increases incensed students, and protests forced bureaucrats to pay attention. Proposition 30, passed by voters in 2012, increased personal income tax on people making over $250,000 to fund education as well. That increase is scheduled to end in 2019.

In the meantime, though, schools have figured out other ways into the wallets of students, thus the increased fees.

Cost of an education

A student in 2010 paid $6,427 to live on-campus, support the student union and use the health facility. The same package today costs $7,958, or 23 percent more.

Students are trying to adjust. Some are living off-campus, which has become a cheaper alternative to the dorm.

Fees aren’t the only way the system has made money. While state funding has waxed and waned, the system increased private fundraising and government grant proceeds, from $1.2 billion in 2005 to $2.1 billion in 2014. The system notes that “amounts shown are not included as part of the gross revenues and generally are restricted to specified uses.”

Growth in the number of staff has sharply outpaced increases in the number of students they serve, with growth among administrators and faculty roughly triple that of students.

Between 2010 and 2015 the number of administrators and faculty grew from 47,000 to 57,000  – or 21 percent – while rank-and-file employees increased from 47,000 to 60,000, or 27 percent. Student enrollment increased from 433,000 to 466,000, or 7 percent.

In the last decade, the system saw two years of year-over-year declines in the number of full-time equivalent students.

Accepted students aren’t dropping everything and enrolling today; in 2010, 36 percent of those accepted enrolled; in 2014 that figure dropped to 27 percent.

With the continued flow of revenue, the system’s financial obligations have jumped 22 percent to over $5 billion from $4.1 billion in 2010.

And the budget? A 26 percent increase to a $8.7 billion budget from $6.9 billion in 2010.

Lottery revenue

The system also receives state lottery revenue: $42 million in 2014, up to $49 million this year. Cal State trustees have allocated part of that to the so-called Early Start program at the state Department of Developmental Services.

A portion of the lottery proceeds also goes toward the retirement fund for system employees. The system combined lottery and other funds to send $493 million to the pension system in 2014, up from $400 million in 2010.

And just last month, a new round of raises for executives was announced.