The CSU is funded by two main sources: the state General Fund and student tuition and fees. State dollars fund 60% of the CSU’s operating costs, and tuition and fees make up the difference.

The state budget process includes three cycles: Proposed budget (January), revised budget (May), final budget (July). The campus level budget process depends on projected budget allocations and cannot be finalized until the final state budget has been passed.

The state of California cut funding to the CSU by 7.95%, or $375 million, for 2025-26. In addition to this cut, Sacramento State is facing significant inflationary and benefit cost increases.

Just over 85% of Sacramento State’s budget is dedicated to salaries and benefits, a percentage that is projected to increase substantially for the 2025-26 fiscal year and beyond. Our next largest cost is financial aid for students (State University Grants), followed by utilities and other operating expenses.

Though the tuition increase will generate $9.9 million for Sacramento State, only $6.6 million can be used to cover expenses, as the remaining $3.3 million is earmarked for financial aid for students (State University Grants). Unfortunately, $6.6 million is not enough to cover rising operational costs, insurance premiums, health benefits, and union-negotiated compensation increases, which have not been funded by the state to the CSU. In the 2024-25 fiscal year, the University covered 70%, or $12.3 million, of the union-negotiated compensation increase from our own permanent base funding (general fund).

The campus budget goes through a shared governance process, with the final allocations for each division decided by the president. The University’s Budget Advisory Committee (UBAC), which is comprised of students, faculty, staff and administrators, makes recommendations to the president. Each division vice president also offers a proposed budget to UBAC and to the president. Final budget allocations and other budget documents are regularly updated and are shared by Budget Planning and Administration on their website.

The University’s $431.6 million baseline operating budget will have an estimated $31.2 million shortfall for the coming 2025-26 fiscal year, with an additional $5.8 million projected for the following year. This is a huge reduction for us.

Upon the recommendations of the University Budget Advisory Committee (UBAC), we have started to do longer term budget planning, rather than year-by-year planning only. To that end, we will implement cuts in the upcoming fiscal year that will help us to create a balanced budget for the next two fiscal years.

Reductions will be achieved by:

• Implementing reductions to each division’s baseline budget from their 2024-25 allotment.
• Reducing the number of administrative positions by cutting or merging vacant positions, engaging in a “hiring chill” and eliminating some positions. The total number of management positions is down 8.7% from last year at this time.
• All divisions have cut travel and professional development budgets by at least 50%.

UBAC and division vice presidents are working to identify further reduction strategies and revenue streams to balance the upcoming budget.

To diminish the impact on staff, faculty, and students administrative positions (MPPs) have already been reduced.

Should layoffs for staff and faculty become necessary, we will follow all processes outlined in the applicable collective bargaining agreement(s).

In the fall of 2024, several new fees were adopted after an extensive consultation process with students. These fee dollars can only be used as outlined in the Student Fee Advisory Committee process. Those fees will fund additional services in Student Health, Wellness and Counseling; additional resources for our Cultural and Academic Resource Centers; additional funding for Instructionally Related Activities; funding for student recreation and club sports teams; and funding for athletic facilities for club, recreation, and NCAA athletics. The stadium is being funded with funds that are earmarked for student athletic facilities. These dollars cannot be spent on anything other than athletic facilities and are regularly audited for compliance.

Funding for the stadium will not come from general fund dollars.

In his April 7 message to campus, President Wood noted that the deans of each of the academic colleges have requested to start the process of creating college-based Student Success Fees. Whether or not these fees are adopted will be dependent on the outcome of a student vote. This would not be a University fee, rather it is planned as college fees. The college deans will be providing much more information about the proposed fees after consulting with the Student Fee Advisory Committee.

Sacramento State is the only large CSU campus that does not utilize this fee to provide additional resources to academic programs such as increased course sections, student support activities and student retention programs. Colleges where fees are passed may return to normal operations and even expand staffing and services, while colleges where fees are not passed will have fewer resources and therefore have deeper reductions to manage.