San Francisco State University continues to prepare for significant budget reductions in the upcoming fiscal year. However, at the end of yesterday’s University Budget Committee meeting, officials voted to plan with the assumption that budget cuts would be less severe than initially proposed.

After reviewing three possible budget scenarios, the budget committee voted to recommend planning based on a middle-ground scenario that assumes a 5% state funding reduction rather than Governor Gavin Newsom’s full 7.95% fiscal amputation or a best-case scenario of a 4% cut.

The 5% scenario will require approximately $25.6 million in total reductions to close a $35.6 million deficit after using $10 million of one-time retention grants from the chancellor’s office. Academic Affairs, which includes the library and the seven colleges, is slated to bear about $12.5 million of those cuts.

Earlier in the two-and-a-half hour virtual meeting, President Lynn Mahoney reported on her recent lobbying efforts in Sacramento, where she met with legislators to speak against the full cut.

“The tone, as I read yesterday, is the state’s budget isn’t good, but it’s not as dire as it has been the last two years,” Mahoney said. “If I had to guess, while no one has said this, they will scale down from the 8%… It seems like there’s a lot of pressure from the legislature, the senate and the assembly to scale back from the 8%.”

Mahoney emphasized the magnitude of the governor’s proposed cut — $375.2 million to the CSU — detailing how it would devastate campus operations and student access.

“That would translate for San Francisco State into having to lay off or non-retain 100 employees,” Mahoney said. “It translates into hundreds of sections of classes and it translates into at least 12,000 less enrollments, individual enrollments in a class. That will impede students’ access. It will impede their time to graduation. It will impede the services they receive.”

Jeff Wilson, vice president for Administration & Finance, explained the university’s obligation to maintain balanced finances regardless of state funding levels.

“We are a state agency, so we cannot have an unbalanced budget,” Wilson said. “We have to address the deficit by either using one-time funds, reserves or reductions. Our long-term strategy is not to have to use one-time funds or reductions, but to have an alignment between our resources and our costs.”

The financial challenges are compounded by continuing enrollment declines. According to Sutee Sujitparapitaya, associate provost of Institutional Research, the Spring 2025 headcount is 5.3% lower than last spring, continuing a multi-year trend of about a 5% decline per year.

Katie Lynch, senior associate vice president of Enrollment Management, highlighted the demographic challenges facing higher education nationally and particularly in California.

“The demographic decline that we’ve been talking about over the past several years persists for years to come,” Lynch said. “When we look at California, we’re expecting a 29% decline by 2041 compared to 2024.”

Lynch stressed the importance of focusing on student retention as a cost-effective strategy compared to recruiting new students.

“It costs less to keep a student than to recruit new students,” Lynch said. “It’s important for us to look at where we’re losing students in their life cycle as an SF State student — to think about from all of our different positions, what could we be doing differently or better to help keep students at SF State.”

Data presented by Lynch showed that while SFSU’s first-year retention rates exceed 82%, above the national 78% average for four-year public institutions, the university struggles with keeping students through graduation. The six-year graduation rate is 55.2% compared to 62% for the CSU system overall and 64% nationally at four-year public institutions.

Mari Hulick, director of the School of Design, questioned the approach to cuts.

“Maybe we need to be just looking at cuts, but can we move beyond mere cutting and start to think about the education we’re offering our students that will not only bring them to the campus, but will also keep them here,” Hulick asked. “We’ve got to remember our primary purpose is educating our students.”

Provost Amy Sueyoshi said that academic departments are planning conservatively for the fall semester while maintaining flexibility.

“We’ve instructed the colleges to mount the leanest schedule possible, to staff all the tenure-track faculty first, to leave some courses hidden,” Sueyoshi said. “Depending on whether there’s more students who are coming in or how the budget changes, we’ll then unhide those courses and offer them — but to not put all the courses that folks want to offer on the books now for students to register, because then cancelling classes will be absolutely terrible after students have registered.”

Sueyoshi also said there’s a need for departments to rethink their approaches to education.

“We absolutely need to rethink the meaning of not just higher education, but also of areas in which we’re having declining enrollments,” Sueyoshi said. “We’re finding that Gen Z actually want degrees that specifically apply to jobs and careers. So, how can we then mount curriculum that actually relates to jobs and careers?”

According to Sueyoshi, the university’s budget planning process will continue over the coming months. Planning memos will be issued to departments in early April, with the understanding that plans may need to be adjusted to the actual state budget, which will be finalized at the end of June.

“I just want to continue to encourage you to come to UBC to participate in planning through your departments, through your colleges, through your divisions,” said Sueyoshi, as the meeting concluded. “We need all of us to figure this out.”