Legislative Analyst's Office

Analysis of the 2003-04 Budget Bill

Funding Higher Education Capital Outlay

As in the past, we recommend the Legislature fund higher education capital outlay based on year-round operation, statewide priorities and criteria, reasonable construction cost guidelines, and appropriate utilization of existing facilities.

In previous years, we have recommended the Legislature fund capital outlay for higher education based on:

Last year, we examined the efficiency with which the segments were utilizing their existing instructional facilities. We found that the University of California (UC) utilized their classrooms and teaching laboratories substantially less than the Legislature's standards. We also noted that the California State University (CSU) and California Community Colleges (CCCs) were not tracking and reporting their utilization to the Legislature. We look at this issue again this year in light of new information received from the segments.

This year we also review the amount of research space at UC campuses—and its cost to the General Fund. We find that UC has substantially more research space than its peer institutions and that it comes at a high cost to the state.

Year-Round Operation

The Legislature has previously indicated its intention that the segments operate their instructional facilities at nearly uniform enrollments year-round—including summer term—in order to increase access for students, accelerate their time-to-degree, and avoid or defer the need to construct new classrooms and teaching laboratories. The CSU and UC have made progress in increasing their summer enrollment, but they still have a great deal of underutilized instructional capacity in summer term. In spite of this underutilized capacity, CSU and UC capital outlay plans continue to include construction of hundreds of millions of dollars of instructional facilities. Many of these new instructional facilities would not be needed if existing classrooms and teaching laboratories were fully utilized in summer term. In our discussion of the individual segments, we recommend the Legislature direct CSU and UC to delete construction of new instructional space from their capital outlay programs in future years if the space is justified solely on the basis of enrollment growth and a campus could accommodate the growth by higher enrollment in summer term.

We have not been able to determine the full extent to which the 108 CCCs have been utilizing summer term because of the limited availability of summer enrollment information. We recommend the Legislature direct the community colleges to provide more complete summer enrollment information so the need to construct new instructional facilities can be assessed.

Recommended Priorities and Criteria

For the past five years, we have recommended the Legislature fund construction of higher education facilities based on statewide priorities. Our recommended priorities have remained about the same from year-to-year, with some adjustments to reflect new information or conditions. This year we have introduced a new category for research facilities (applicable only to UC) to reflect our examination of the amount and cost of UC research facilities discussed below. Our recommendations are shown in Figure 1 (see next page).

We recommend these priorities be applied on a statewide basis, that is—across segmental boundaries. Implicit in this is our continuing recommendation that available funds not be arbitrarily allocated among the three segments based on predetermined percentages or amounts for each segment—but on the merits of individual projects.


Figure 1

LAO Recommended Priorities for Funding
Higher Education Capital Outlay Projects

Priority Order

Description of Priority


Critical Fire, Life Safety, and Seismic Deficiencies


Necessary Equipment


Critical Deficiencies in Utility Systems


Improvements to Undergraduate Academic Programs


  • New construction or renovations that increase instructional efficiency and are needed based on year-round operation.

  • Libraries.


  • Renovation of existing instructional buildings.


        -- Enrollment shifts in wet laboratories.


        -- Enrollment shifts in other instructional spaces.


        -- Buildings 30 years or older that no longer can
             accommodate the academic program.


        -- Instructional program changes.


Integrity of Operationally Important Facilities


Administrative and Support Facilities, and Faculty Offices


New Research Facilities





Construction Cost Guidelines

As we have done in prior years, we recommend the Legislature provide funding for construction of new buildings on higher education campuses using construction cost guidelines to control costs. We use construction cost information from a number of sources to determine the range of costs for comparable buildings constructed elsewhere in the country. We have adjusted these costs for inflation and geographical differences and use them in preparing our recommendations. Our data base currently consists of 85 classroom, 191 teaching laboratory, 419 research laboratory buildings, and 80 office buildings.

The CSU and CCCs use construction cost guidelines. The CSU increased its guidelines about 15 percent to 20 percent in the last year in order to fund more durable materials and systems that are estimated to be more cost-effective on the basis of a building's life cycle. We have examined CSU's life cycle studies and believe the methodology used is sound. We have compared these higher CSU guidelines, and the CCC guidelines, to the cost of comparable buildings constructed elsewhere and found them to be reasonable. Accordingly, we recommend the Legislature fund CSU and CCC facilities in accordance with their respective guidelines.

The UC does not use construction cost guidelines. Based on our examination of cost information from the three segments and comparable buildings constructed elsewhere in the country, we recommend the Legislature fund construction of new buildings at the UC using the guidelines in Figure 2.


Figure 2

LAO Recommended
Construction Cost Guidelines
For University of California

(Dollars per Assignable Square Foot)

Building Type

Construction Cost Guideline





Teaching laboratories


Research facilities




Utilization of Facilities

We recommend the Legislature not fund construction of new instructional facilities (classrooms and teaching laboratories) that are justified solely on the basis of enrollment growth at campuses that are not utilizing their facilities at least as intensively as the Legislature's standards. The state's legislatively approved utilization standards for station use (such as a desk in a classroom or workspace in a teaching laboratory) are shown in Figure 3 (see next page).


Figure 3

Utilization Standards
CCC, CSU, and UC


Room Use
(Hours per Week)


Station Use (Hours per Week)





Teaching laboratories





a  Standard is 48 hours for community college campuses with less than 14,000 student hours per week.

b  Standard is 23.4 hours for lower division and 17.6 hours for upper division teaching laboratories.



Utilization at both CSU and UC is less than the legislatively approved standards. The CCCs have not provided sufficient information to determine how well they are utilizing their existing facilities. Utilization is discussed further in the analyses of the individual segments.

Funding UC Research Facilities

This year we examine the cost of research facilities at the UC and the amount of research space at its campuses compared to the Legislature's standards. We also look at the amount of research space at comparable institutions elsewhere in the country. We find UC has substantially more research space than allowable under the Legislature's standards—and compared to its peer institutions. Peer institutions are the top 100 (exclusive of the eight UC general campuses) universities in the country in research expenditures, as measured by the National Science Foundation.

Return to Capital Outlay Table of Contents, 2003-04 Budget Analysis