Analysis of the 2005-06 Budget Bill Legislative Analyst's Office February 2005

California State University (6610)

The Governor proposes $262 million from the Higher Capital Outlay Bond Fund of 2004 for 23 projects. Of this amount, $25 million is for 4 new projects and $237 million is for 19 previously approved projects. We recommend approval of all but one of the projects, which we discuss below.

Three Projects Require Future Funding

There are insufficient uncommitted funds remaining in the 2004 bond fund to complete 17 projects at all three segments that are proposed for partial funding in the budget. Three of these are California State University (CSU) projects. We recommend two of the projects be approved and that bond funds be designated for the future costs of these projects. We recommend the third be approved contingent upon CSU committing to fund the project's completion with nonstate funds if state funds are not available.

The Governor's budget proposes $4.2 million to prepare preliminary plans and/or working drawings for three CSU projects from the 2004 Higher Education Capital Outlay Bond Fund. The three projects will require $152 million to complete after 2005-06, as summarized in Figure 1.

As we discussed in the "Crosscutting Issues" section of this chapter, there are not sufficient funds to complete 17 higher education capital outlay projects proposed in the budget year, including the three projects for CSU. We recommend that the Legislature allocate remaining bond funds to projects based on their priority ranking. For CSU, we recommend $100 million of remaining 2004 bond funds be designated for the completion of the CSU Hayward and CSU Long Beach projects. Both projects provide classrooms and teaching laboratories to improve academic programs.

The Northridge project is an auditorium, which falls into our grouping of administrative and support facilities. As such, it is lower than the other projects in our priority ranking and not fundable with the remaining 2004 bond funds. Accordingly, we recommend the CSU Northridge project be approved contingent upon CSU committing to use nonstate funds to complete the project if state funds are not available.