Assembly hearing spotlights proposed $375 million CSU cut and enrollment imbalance across campuses

A California State Assembly Budget Subcommittee No. 3 hearing on education finance on Oct. 27 focused on the fiscal and enrollment stress facing the California State University system after the administration proposed substantial base reductions and a deferral of a scheduled base increase.

Chair David Alvarez opened the hearing saying it would “focus on both the CSU and the library budgets” and that the agenda included five CSU issues and two on the State Library. The Department of Finance described the administration's proposal as a roughly 7.95% reduction in ongoing general-fund support for CSU—about $375 million beginning in 2025–26—and said the planned 5% base increase (about $252.3 million) would be deferred to 2027–28.

Why it matters: CSU educates a large share of California's workforce and serves primarily state residents; lawmakers, CSU leaders and the Legislative Analyst’s Office warned that large, systemwide cuts threaten course offerings, student services and the pace of degree completion.

Officials' overview and disagreement over the deferral Devin Mitchell of the Department of Finance described the budget mechanics: the 5% compact increase would be deferred, and the system should “continue planning for a reduction of 7.95% in ongoing general fund support totaling approximately 375,200,000.0, beginning in the 2025–26 fiscal year.” Natalie Gonzalez of the Legislative Analyst's Office recommended the Legislature reject the deferral, saying, plainly, “we recommend the legislature reject the deferral,” because the state has not identified a reliable plan to restore deferred amounts and doing so could force cuts elsewhere.

CSU leaders and campus representatives urged against the reductions. Ryan Storm, assistant vice chancellor for budget at the CSU Chancellor’s Office, said the system is already addressing structural budget shortfalls and faces additional operating-cost pressures, then warned that the proposed cuts put CSU in “a pretty precarious crossroad.” Nathan Evans, CSU deputy vice chancellor for academic and student affairs, said the governor’s 2025–26 budget plan threatens “the mission for the state and for our current and future students.”

Already-implemented reductions and enrollment trends CSU officials detailed actions already taken to close previous deficits: systemwide reductions in personnel and course sections, hiring freezes and administrative consolidations. The Chancellor’s Office reported that since the most recent shortfalls campuses have reduced 1,208 jobs across 17 campuses, eliminated 1,430 course sections at seven universities, and non‑retained 98 management personnel. CSU warned further reductions could mean larger class sizes, fewer course offerings and cuts to student support that would slow graduations.

At the same time, CSU presented enrollment data showing wide variation across campuses. Nathan Evans said the system saw a net increase of roughly 11,000 full‑time equivalent (FTE) resident students over the prior year (about 12,300 additional California resident heads), with record first‑year classes at multiple campuses. The Legislative Analyst’s Office noted the 2024–25 budget act directed CSU to grow resident undergraduate enrollment by about 6,000 FTE; CSU exceeded that with roughly 9,000 FTE growth in 2024–25. The LAO recommended holding 2025–26 enrollment expectations flat at the 2024–25 level in light of the uncertain budget picture.

Access imbalance and campus reallocations Members pressed CSU about an enrollment imbalance: some campuses (San Diego State, Cal Poly San Luis Obispo, Long Beach and Fullerton among them) are turning away tens of thousands of applicants while other campuses have sustained declines. CSU described a multiyear enrollment reallocation plan that shifts funding away from chronically underenrolled campuses (using a 10% or greater shortfall threshold) toward campuses with sustained demand. Evans said the system is also piloting multi‑campus collaborations and direct‑admit outreach programs (for example, a Riverside County direct admissions pilot that mailed offers to more than 17,000 high‑school seniors), and noted campuses are exploring shared academic program delivery to preserve access.

Policy tradeoffs and legislative options Several members argued the Legislature could make cuts more surgically—targeting central administration or noninstructional institutional support—rather than adopting a single percentage reduction across all CSU operations. The LAO confirmed the Legislature could be more precise, but cautioned that targeted cuts have tradeoffs: centralized or instructional cuts may affect campuses differently based on local financial condition. CSU recommended that if the Legislature chooses to require reductions, providing campuses flexibility to implement them would let on‑the‑ground leaders prioritize preserving instruction and student services.

What was not decided No votes were taken during the hearing. The LAO advised against the proposed deferral and recommended holding enrollment targets flat in 2025–26 and 2026–27 pending clearer fiscal and demographic forecasts. CSU representatives asked the Legislature to avoid cuts that would undo progress on student success initiatives.

Looking ahead Committee members pressed for greater transparency in how past augmentations were spent and asked staff and the LAO to develop reporting that would let the Legislature and public track where funds are allocated and where cuts are made. The subcommittee left the item open for follow‑up and signaled it will continue exploring whether and how to pursue more surgical reductions and better reporting to protect instruction and student access.