Mandatory costs are expenditures the university must pay regardless of the level of funding allocated by the state, and they often increase independent of growing, flat or declining state support. The costs identified here go beyond the increases for employee health and retirement benefit rate increases, included in the Salary and Benefits section. The 2020-21 operating budget request includes $27.3 million for increases in mandatory cost obligations for state minimum wage increases, the operations and maintenance of newly constructed facilities as well as the CSU share of a state-initiated loan repayment.
The CSU is scheduled to open 198,880 square feet of new facilities in 2020-21. The cost to fund regular maintenance of these facilities is $19.49 per square foot, for a total of $3.9 million in 2020-21. Regular maintenance of new facilities includes the cost of utilities, building maintenance, custodial, landscape and administrative support.
In January 2020, the California minimum wage will increase from
$12 per hour to $13 per hour. The estimated annualized cost of the increase on CSU campuses is over $5 million. Further, the California minimum wage will increase each subsequent year until January 2022, when it reaches $15 per hour.
Senate Bill (SB) 84 (Chapter 50 of 2017) authorized the state to borrow
$6 billion from a state cash account and make a one-time supplemental pension payment to CalPERS in 2017-18 to reduce unfunded pension liabilities. The law required the state General Fund and other state funds that would benefit from lower-than-projected pension cost increases to repay the loan over several years. The law tasked the state Department of Finance to determine each department’s share of the repayments.
The Department of Finance concluded that the CSU operating fund portion of the repayment was $19.0 million in 2018-19 and approximately $18.4 million each year from 2019-20 through 2023-24, with a final payment of $15.6 million in 2024-25.