The California State University system stands at a pivotal moment as it faces a proposed 7.95% reduction in state funding that could reshape higher education for more than 450,000 students across the state, potentially leading to larger classes, fewer course offerings, and reduced student services at its 23 campuses.
Governor Gavin Newsom’s proposed $375.2 million cut is to the State General Fund’s appropriation to the CSU system in his 2025-26 budget proposal. It arrives as the CSU system continues to grapple with financial challenges from previous years. Additionally, the proposal would defer $252.3 million in funding until the following fiscal year, further straining the system’s resources.
“The CSU’s budget situation is dire,” said CSU Chancellor Mildred García. “These budgetary measures would have severe consequences for students, staff and faculty across all CSU universities, forcing difficult decisions that could lead to larger class sizes, reduced course offerings, diminished student services, layoffs and hiring freezes.”
State allocations make up 60% of the CSU’s funding. The rest comes from tuition and fees.
“The CSU Operating Budget is used to run the core university operations,” according to Hazel Kelly, a CSU spokesperson. This includes salaries, wages and benefits for all core employees, student financial aid, supplies and services and academic debt payments.”
While private funding helps support some programs, it can’t fill the budget gap.
Kelly said that “99% of contributions received in the past year were designated by donors to specific programs, scholarships and facilities across the system,” leaving little flexible funding for general operations.
She noted that while the system continues to use reserve funds to mitigate budget shortfalls, this approach isn’t sustainable long term.
Individual campuses are already developing plans in the case the current budget proposal is finalized.
At California State University, Fresno, which could face a $19 million reduction, administrators will draw from reserves. However, President Saúl Jiménez-Sandoval warned this still leaves $4.2 million in permanent cuts to address.
The impact could be particularly severe at campuses already struggling with enrollment challenges like Sonoma State University. According to a press release on Wednesday, enrollment there has dropped 38% since 2015. In response, Sonoma State will discontinue its athletics program, eliminate departments and majors and lay off faculty to address a projected $23.9 million budget deficit in 2025-2026.
At California State University, San Bernardino, Chief Financial Officer Samuel Sudhakar outlined specific areas facing potential cuts, including “specialized programs, such as academic tutoring, career counseling and extracurricular initiatives.” He emphasized that reduced funding particularly threatens programs designed to support underserved students and close equity gaps.
“Budget cuts often lead to decreased funding for specialized programs, such as academic tutoring, career counseling and extracurricular initiatives,” Dr. Sudhakar said. “Course offerings may also be reduced, potentially delaying students’ ability to graduate on time. Faculty professional development opportunities and campus facility upgrades could also face cutbacks.”
He also said that class sizes could increase and there could be fewer internships available.
Dr. Rosalee Rush, Interim Vice President of University Advancement at Stanislaus State University, said her university will prioritize students, focusing on minimizing impacts to their education.
“These efforts include extreme spending restrictions, reducing non-essential travel and holding positions vacant — these measures allow us to protect essential programs and resources while operating responsibly within our budgetary limitations.” Dr. Rush said. “At a time when our nation faces serious competition and dynamic challenges, the failure to invest in the future of our state, particularly for the student population served by the CSU, will have long-term consequences on our ability to compete and succeed on a regional and global scale.”
The system has had experience managing budget challenges. After the Great Recession, the CSU saved tens of millions of dollars through efficiency measures like debt refinancing and coordinated purchasing. In recent fiscal years, the CSU has used reserve money to make up for inadequate state funding.
Still, faculty representatives expressed particular concern about the cuts’ impact on educational quality.
“The Governor made it clear that our future is reflected in our values and our values are reflected in our investments,” said Dr. Charles Toombs, California Faculty Association President and San Diego State University professor. “If he chooses to cut public higher education, his values will be in direct contrast to our own.”
The CSU has maintained some progress despite previous cuts — graduation rates reached all-time highs and the average time to degree decreased to 4.7 years. However, administrators warn that this larger reduction threatens these gains and could particularly impact underserved students’ access to higher education. The system projects a potential $1 billion budget gap by 2025-26 if the current trends continue.
“We must collectively advocate strongly against these cuts and for the restoration of compact funding,” Dr. Jiménez-Sandoval said. “With state revenues showing signs of improvement, there is hope that the May Budget Revision will provide relief and restore some critical funding to the CSU.”
Dr. Sudhakar and Dr. Rush both mentioned that there is advocacy already happening to restore some funding through student and faculty outreach to legislators.
Representatives for other CSU campuses, including at Long Beach, Pomona and San Marcos, told Golden Gate Xpress that their campuses are also working on plans to adapt to the possible funding reduction.
A report on California’s fiscal outlook published by the state Legislative Analyst’s Office predicts that the state is projected to face budget shortfalls in the near future despite budgets being roughly balanced for 2025-2026. This could translate to additional cuts to CSU funding soon.