²©88ÑÇÖÞ

FY25-26

• Due to state funding shortages that are insufficient to cover cost increases like compensation and utilities, along with the reduced revenues due to declining enrollment at some campuses, ²©88ÑÇÖÞ and other CSU campuses are experiencing a budget gap.
• CSU is facing significant enrollment challenges, which puts pressure on high-demand campuses like ²©88ÑÇÖÞ to over enroll but without full state funding.
• For 25-26, the state of California has clearly signaled in the January budget proposal their intention to cut the CSU’s budget by $375 million.
• CPP implemented a Voluntary Separation Incentive Program (VSIP), reducing the deficit by $13.4 million, and received enrollment growth funding that will further reduce it by $4.6 million.
  • These efforts have lowered the budget gap from $38 million to $19 million, though additional strategies are still needed to address the remaining budget gap.
• There are still many unknowns that could change our budget gap, including the May Revise and enrollment.

FY24-25

• Enrollment Growth
  • The CSU is expected to grow resident enrollment by 1%, or 3,484 resident Full-Time Equivalent Students (FTES). The responsibility to grow enrollment falls on eight high-demand campuses, mostly southern California campuses, including ²©88ÑÇÖÞ.
  • ²©88ÑÇÖÞ is on track to achieve the increased resident FTES target set by the Chancellor’s Office.
• Increasing Costs, Reduced Revenue
  • We begin FY24/25 with a solid financial footing due to our strong fund balance. Nonetheless, several challenges remain.
  • While the state honors its $240 million compact to the CSU, the revenue is offset by a one-time cut of $75 million, reducing our proportional share of the allocation.
  • The cost of the employee compensation increase at ²©88ÑÇÖÞ is only partially funded by the state —approximately $4.1 million or 24%, which is even smaller portion than last year. ²©88ÑÇÖÞ is expected to close the funding gap again.
  • Other unfunded mandatory costs continue to escalate, with a 20% increase for utilities and a 11.7% increase for insurance premiums.
• Funding Gap
  • We anticipate a funding gap of $4.2 million, even after redirecting one-time salary and benefits savings (based on an estimated 3.5% vacancy) and centrally managed mandatory costs.
  • Although this is not a significant amount, if left unaddressed, the funding gap grows in future years. The five-year tuition increase beginning in FY24/25 provides additional funds for the university, but rising costs will still outweigh the revenue increase.

FY23-24

• We ended FY23/24 General Fund with a net operating surplus and a positive fund balance.
• The state appropriation covered less than half of the employee compensation increases. To prioritize funding for personnel, divisions covered the remaining gap by reallocating base funding from salaries and operational expenses.
• We utilized one-time funds held centrally to cover unfunded mandatory cost increases, including utilities and risk management.