Higher-education leaders warn students will feel governor—s proposed cuts and deferred compact payments

Assemblymember Jose A. Alvarez, chair of the California State Assembly Subcommittee on Education Finance, opened the Feb. 18 hearing by flagging uncertainty in the governor—s budget and asking higher-education leaders how the state can protect access and affordability amid projected deficits.

"The governor's budget is balanced, but it is unclear what we will see in the May revise," Alvarez said, noting both the Department of Finance and the Legislative Analyst—s Office had identified multibillion-dollar shortfalls in the out years.

Department of Finance and Legislative Analyst—s Office officials walked the subcommittee through the administration—s proposals and the fiscal tradeoffs. Gabriela (Gabby) Chavez of the Department of Finance told members, "Both the UC and the CSU should continue planning for a 7.85% reduction in ongoing general fund support." The LAO described the proposed reductions to the systems as roughly an "about 8%" cut and flagged deferred compact payments that push some funding to the 2027-28 fiscal year.

The Department of Finance presented specific figures attached to the multiyear compact: it identified a deferred compact payment for the University of California of about $240.8 million and a deferred compact payment for the California State University of about $252.3 million, and told the committee that the statewide control section would require planning for large reductions in ongoing support. The LAO, using its own analysis,…