Mandatory costs are expenditures the university must pay regardless of the level of funding allocated by the state, and they often increase despite growing, flat or declining state support. The 2021-22 operating budget request includes $57 million for increases due to the new ethnic studies requirement, health benefits, maintenance of new facilities and minimum wage rate.
AB 1460 requires every CSU campus to offer ethnic studies courses and every CSU student to complete a three-unit course in ethnic studies to graduate. Campuses that have no ethnic studies courses must develop them and campuses that have ethnic studies departments or courses must expand them to ensure that every student has access to an ethnic studies course. The cost to the CSU to provide an ethnic studies course to all students is a $16.5 million ongoing cost across the system and an additional $1.5 million in one-time cost. This cost is comprised of instructional, administrative and one-time Associate Degree for Transfer (ADT) review activities.
Permanent base budget costs associated with January 2021 employer-paid health care premium increases are nearly $23.8 million. Health care premiums are shared between the CSU and its employees, with the CSU funding a significant portion of the costs. The CSU is governed by California Government Code section 22871 that defines the employer-paid contribution rates.
The CSU is scheduled to open 558,969 square feet of new facilities in 2021-22. The cost to fund regular maintenance of these facilities is $20.28 per square foot, for a total of $11.3 million in 2021-22. Regular maintenance of new facilities includes the cost of utilities, building maintenance, custodial, landscape and administrative support.
In January 2021, the California minimum wage will increase from $13 per hour to $14 per hour. The estimated annualized cost of the increase on CSU campuses is over $5.3 million. Further, the California minimum wage will increase again in January 2022, when it reaches $15 per hour.