Update on budget planning for 2025-26
Dear Beach Faculty and Staff:
With the January 10 release of the governor’s state budget proposal, fiscal planning for 2025-26 is now underway in earnest here at The Beach.
While the governor proposed a balanced budget, and revenue projections are above previous expectations, the CSU and UC are being asked to now take the 7.95% general fund reduction in 2025-26 that other state agencies realized in 2024-25. A 7.95% cut to the CSU’s general fund allocation equates to $375 million. For planning purposes, we expect CSULB’s share of this cut to be approximately $28 million — just under 5% of our total operating fund budget of $581 million.
The governor also proposed deferring Year 4 funding of the higher education compact until 2027-28, but has asked the CSU to continue to grow enrollment without the necessary funding in the interim. Needless to say, this is problematic.
Compounding our challenges is $10 million in new mandatory costs in the year to come: expenses like health benefit rate increases, property and liability insurance increases, utility cost increases, and new money set aside from the tuition increase for our State University Grant program.
To offset a portion of these fiscal pressures, we are projecting some new revenue. We anticipate the restoration of a one-time general fund cut from 2024-25 of $6.4 million. Also, there will be new tuition revenue of $17 million resulting from the previously approved 6% increase set by the system’s Board of Trustees.
The reality, however, is that our obligations exceed our revenue, leaving us with a structural deficit of approximately $15 million. Conversations about how to mitigate this deficit will begin in the coming weeks, with the divisions being asked for specific plans. Layoffs are not under consideration at this time. This past fall, we implemented a strategic hiring freeze to pause searches for vacant management and staff positions, with exceptions being granted on a case-by-case basis to ensure we continue to meet the needs of our campus community.
Between now and when the final state budget is approved in late June, we will join with the rest of the CSU to advocate for no budget cut and restoration of the higher education compact in 2025-26. More information about the advocacy efforts will be shared in the weeks to come.
I appreciate your engagement in these important matters so critical to our educational mission.
Jane Close Conoley, Ph.D.
President
