Baseline Commitments

The CSU fa​​ces $323.7 million in baseline commitments for the upcoming fiscal year. These required operational (mandatory) costs are expenditures the university must pay regardless of the level of funding allocated by the state, and they often increase despite the level of additional revenue.​

FINANC​​​IAL AID

The State University Grant (SUG) program is the CSU's primary institutional aid program, providing need-based awards to eligible students. The budget plan includes an additional $58.6 million for SUG associated with the tuition increase, ensuring students with the greatest financial need are not impacted by the 6% tuition increase scheduled for 2026-27.

• SUG program has grown from $4 million in 1982-83 to a projected $882 million in 2026-27
• 11% of the CSU's total operating budget is dedicated to SUG
• The CSU provided more than $1 billion in institutional aid in 2023-24, including $699 million from SUG
• Students receive significant state and federal financial aid, including $746 million from the state Cal Grant program, more than $583 million from the Middle Class Scholarship program, and more than $1.1 billion from the federal Pell Grant program
• Financial aid programs help defray the cost of attendance for the lowest-income students by providing support for tuition, fees, food, housing, and some personal expenses
• ​Only a small percentage of CSU students have debt (35% of spring 2024 graduates), and CSU student debt ($15,000 in 2023-24) is well below the national average ($29,300 in 2022-23)

HEAL​​TH PREMIUMS

CSU faces a base budget increase of $20.7 million as a result of a 2.5% rise in employer-paid health care premiums effective January 2026.

• ​CSU health care costs have grown by more than $224 million over the past five years with the employer contribution to premiums increasing by 36%.
  
• Premiums are shared between CSU and employees
• CSU funds a significant portion of health care premiums, per Government Code Section 22871, which defines the employer-paid contribution rates
• Funding the increased costs ensures affordable, continued health coverage for employees

MAINTENANCE OF N​​EW FACILITIES

​While still navigating an $8.6 billion backlog in critical capital renewal projects, CSU will open 363,000 square feet of new facilities in 2026-27, requiring an additional $12.9 million for ongoing maintenance. This funding supports:

• Ongoing upkeep at a cost of $24.72 per square foot
• Systemwide deferred maintenance at a cost of $10.75 per square foot
• Utilities, building and landscape maintenance
• Custodial services and administrative support

LIABILITY AND PRO​​PERTY INSURANCE PREMIUMS

Insurance premiums are projected to rise by $5.2 million (4%) in 2026-27. This increase reflects:

• Rising insurance costs nationwide, particularly for public entities in California
• Higher expenses for required liability and property coverage

UTILITI​ES

CSU utility costs are projected to increase by $18.4 million (10%) due to rate increases in electricity and natural gas. This funding supports the continuation of essential university operations.

INFLATION ON NON-PERSON​NEL COSTS

The CSU estimates a $28.4 million increase in 2026-27 due to inflation, based on a 3.4% rise in the Consumer Price Index (CPI). Without additional new funding, resources must be redirected from existing programs for these non-discretionary costs, which include:

• IT hardware and software
• Communications service and equipment
• Space rental
• Contractual services
• Miscellaneous supplies and goods

2024-25 F​ACULTY & ​​STAFF COMPENSATION (UNIVERSITY FUNDED)

In 2024-25, the CSU had to fund a portion of the increase for faculty and staff compensation ($159.3 million). Funding for this pre-existing commitment supports:

• Previously negotiated salary agreements with 5% increases that totaled $308.6 million
• Workforce stability and operational continuity across universities
  

2025-26 CSUEU STEPS IMPLEMENTATION (UNIVERSITY FUNDED)

The CSU will fund a $20.2 million increase in 2025-26 to implement a step structure for CSUEU-represented employees. Funding for this pre-existing commitment supports:

• A transition to a step-based salary structure implemented in the fall of 2025​
  
• Compliance with the current collective bargaining agreement
• Improved pay transparency and employee retention​