CSCU midyear update shows $44M projected FY25 surplus as enrollments rise; biennium gaps remain

The Connecticut State Colleges and Universities (CSCU) Finance Committee on [meeting date not specified] approved the system's FY25 midyear financial update, which shows stronger‑than‑expected enrollment revenue and reduced expenditures that together improved the FY25 outlook from a $3.9 million surplus at adoption to a roughly $44 million projected surplus.

CFO Lloyd Blanchard told the committee: "Those revenues are now higher by 37,000,000, now projected to be $1,257,000,000... System wide, our expenditures are down by $3,000,000... [which] lead[s] to a swing of, $40,000,000." He said the revenue increase is largely driven by fall and spring enrollment gains, and that a system spending‑mitigation program contributed to expenditure reductions.

System and institutional highlights - Systemwide: Revenues originally projected at $1.09 billion are now estimated at $1.257 billion (+$37 million). Expenditures are down about $3 million; the midyear swing produces a projected FY25 surplus near $44 million, compared with a planned $3.9 million surplus at adoption. The system applied about $14 million in RSA funds into the midyear column. - Central Connecticut State University: Revenues up $6.2M, expenditures up $2.4M; projected surplus grows to about $9.9M. - Eastern Connecticut State University: Revenues and expenditures each increased by about $3.8M; net result remains a balanced budget projection. - Southern Connecticut State University: Revenues up $2.2M, expenditures up $2.0M; projected small surplus of about $156,000. - Western Connecticut State University: Revenues up $700,000, expenditures down $1M; projected surplus of $1.7M. - Connecticut State Community College (CT State): Revenues up $23.5M and expenditures down $9.3M; the institution moved from a planned $2.2M deficit to a projected surplus of about $30M (midyear column includes RSA funds). - Charter Oak State College: Expenditure reductions of $1.7M produce a projected $1.7M surplus. - System Office and shared services: Revenues up $1.1M, expenditures up $0.8M; small projected surplus of $302,000.

Biennium budget picture: mitigation and remaining gaps The committee also received a briefing on the FY26–27 biennium request and the governor's proposed budget. The system described planned mitigation of roughly $95 million per year in FY26 and FY27 (about $190 million total for the biennium). Those plans include targeted expenditure reductions and planned use of reserves in some scenarios.

The governor's proposed budget included increases to campus block grants but did not fully replace one‑time funds (ARPA, carryforward, PAC) that supported FY24–25. As presented, the system projects a FY26 deficit of about $37.3 million and a FY27 deficit of about $52.8 million under the assumptions used in the budget slides that compare the system's request to the governor's proposal. Presenters said those projected biennial deficits do not yet reflect the midyear FY25 improvement and that subsequent modeling (including five‑year sustainability plans) will show a more complete picture.

Reserves and primary reserve ratios CFO Blanchard reviewed unrestricted net position at fiscal‑year end 2024: the system holds approximately $635 million in unrestricted net position, of which about $359 million is designated and $276 million is available for use. Blanchard noted the system office's designated balance is driven by debt service and covenant requirements.

He also presented primary reserve ratios (available unrestricted net position divided by annual spending). Using entire unrestricted net position, most institutions meet or exceed a commonly used 40% benchmark; using only undesignated unrestricted net position, the ratios are substantially lower and would be considered under industry benchmarks. The committee discussed fund‑balance policy changes and whether some reserves could be designated for strategic investments, including capital projects subject to covenants and counterparty agreements.

Committee requests and next steps Regents asked for additional detail: a supplemental report showing the spring enrollment actuals and how those figures would alter the revenue projection; more granular monthly reporting on P‑Card violations and audit outcomes (discussed in a separate item); and continued work on five‑year institutional sustainability plans. The chair and management said they will revisit fund‑balance policy language and return recommendations for the board to consider.

Ending The committee approved the FY25 midyear update and requested follow‑up analyses on the spring census and the budget impact of midyear results. Management said it will present the accountability report (already in regents' packets) and detailed schedules at subsequent board or committee meetings.