CalSTRS reviews $447.2 million proposed 2026–27 operating budget; trustees to revisit in November

The California State Teachers Retirement System board on Sept. 4 received a first reading of a proposed $447.2 million operating budget for fiscal year 2026–27 that would increase authorized positions by 60 and expand spending on technology and investment staff.

Julie Underwood, CalSTRS chief financial officer, and Pritpal Baines, assistant director of financial planning and budgetary reporting, told trustees the proposal is a first reading and can be revised before a formal vote in November. "The proposed operating budget is currently projected at 447,200,000.0," Baines said, describing a package that includes $15.6 million for enterprise strategic support (33 positions and $10 million in service contracts) and $6.1 million for 27 investment‑related positions.

Trustees pressed staff on how the board would determine whether the added resources deliver measurable value rather than becoming permanent baseline costs. Baines and Underwood pointed to the annual accomplishments report and quarterly key performance indicators, which management uses to track progress on strategic plan priorities and customer‑service metrics. "You’ll want to look at the accomplishments report for the strategic plan... and the KPIs we review quarterly," staff said in response to trustees’ questions.

Several trustees also raised the risk that outsourcing technology work can create dependency and cost escalation. Staff and project leads said contracts include training clauses and that the plan combines in‑house capacity building with selective external expertise. One trustee summarized the point: external firms will be used to transfer skills while CalSTRS builds internal capability.

Board members recommended bringing the budget back for approval in November to allow for further review and potential revisions. No final vote was taken at the Sept. 4 meeting; staff said they would take trustee feedback and return with an updated package for a decision before the statutory deadline tied to the governor’s budget process.

What’s next: The board will consider the revised operating budget at its November meeting; staff noted the Department of Finance has worked with CalSTRS to allow that timeline.