Current Budget Context

The CSU’s current budget situation provides important context for constructing the 2024-25 budget plan. We are entering the 2023-24 year with several unfunded costs that are creating significant cost pressures for our universities. Each CSU university is undertaking a critical assessment of priorities and how to balance available resources with rising costs, unfunded mandates and underfunded compensation increases.

Predictable multi-year tuition revenue is an important consideration in the budget plan. The additional revenue from the multi-year tuition plan will provide essential resources to complement the state’s compact funding and will allow the university to substantially advance the most important budget priorities.

Along with existing cost pressures, the CSU is facing several emerging items that are creating new fiscal constraints. Significant resources will be required to implement the Title IX and discrimination, harassment and retaliation (DHR) program recommendations from the Cozen O’Connor report. In addition, several strategic workgroup recommendations call for new investments to support enrollment, Black student success, the graduation initiative and a sustainable financial model.

The multi-year compact between Governor Newsom’s administration and the CSU continues to provide necessary financial support. Beginning in fiscal year 2022-23 and continuing through 2026-27, the governor has agreed to propose annual, ongoing state general fund increases of 5% for the term of the compact (equivalent to approximately 2.9% of the CSU Operating Fund). The governor’s administration supported that commitment by ensuring that the 5% state General Fund increase ($227.3 million) was provided in 2023-24. The CSU is grateful for the multi-year compact because it provides foundational, predictable and more sustainable funding for our shared commitments to access, equity and student success. Further, the CSU views the compact as a critical safety net to protect the university from economic fluctuations over the next several years.

Currently, both positive and negative economic signals make the future uncertain. It is unclear if there will be additional state revenue to support CSU priorities above that provided by the compact. Market volatility–specifically capital gains– delayed tax receipts, rising inflation and interest rates, and financial institution failures contribute to continued economic uncertainty.