Essential Priorities

The CSU has identified $273.4 million of essential priorities for the upcoming fiscal year that reflect university values, including enrollment growth, faculty and staff compensation, and debt service for facilities and infrastructure projects. ​All are contingent on securing additional state funding to support these priorities.

ENROLLME​​NT GROWTH​

As part of the compact agreement with the Governor, the CSU is committed to increasing enrollment by approximately 3,511 resident undergraduate full-time equivalent students (FTES) in 2026-27—a growth of about 1%. Using the marginal cost rate—the average cost of educating each FTES—the CSU estimates it would require approximately $57.8 million in additional funding.

• Builds on a decade-long investment of $564 million, which increased student access to the CSU by nearly 45,000 FTES (13%)
• CSU strategically allocates new enrollment funding to universities with high demand and is following an Enrollment Target & Budget Reallocation Plan to shift resources from under-enrolled to fully enrolled universities
• In 2024-25 and 2025-26, enrollment at universities significantly below target was shifted to those universities meeting or exceeding their state-funded resident target
• The anticipated enrollment increase will generate $8.4 million for the SUG program, representing one-third of the projected new tuition revenue generated by this growth

FACULTY & STAF​​F COMPENSATION POOL

A faculty and staff compensation pool funding allows for various compensation elements such as salary and benefit changes across entire bargaining units. This budget plan includes a 3% increase at a cost of $176.6 million to fund the 2026-27 compensation pool. The compensation pool is subject to collective bargaining and contingent on the state providing the funding to support this priority. Through mutual agreements between the CSU and its bargaining units, this funding can address specific market needs, salary structures, or job framework changes. The exact form of compensation will be determined by agreements between the CSU and each bargaining unit.

• CSU invests $5.9 billion annually in employee compensation.
  
• ​Between 2021-22 to 2024-25, the system invested more than $915 million in 17% cumulative compensation increases.
  
• Budget Acts of 2023, 2024 and 2025 did not fully fund compensation needs.
• High inflation is pressuring the need for general salary increases.
• Recruitment and retention will suffer without market-competitive pay.
  
• Impacts of insufficient resources include: larger class sizes, fewer course offerings, reduced student services, hiring freezes, or layoffs.​
  

DEBT SERVICE: FACILITIES ​& INFRASTRUCTURE

To support student access and maintain modern academic environments, the CSU must continue investing in critical infrastructure by renovating outdated academic facilities and building new ones—especially in high-demand fields like engineering, health care, and the sciences. Currently, about $440 million, or 5% of the 2025-26 operating budget, is allocated to debt service. Since 2014, following a change in state law, the CSU has had the authority to issue debt for academic facilities using operating funds. Additionally, the state has provided $803 million in one-time funding over the past two decades to address deferred maintenance needs; however, the last appropriation was in 2022-23.

For 2026-27, the plan includes $25 million in ongoing funds to support debt service of approximately $300 million in capital and renewal projects.

The CSU is also requesting one-time funding of $1.1 billion to address critical facility and infrastructure projects. This request would address less than 13% of the existing backlog.

• The CSU faces a significant and growing backlog of deferred maintenance, exceeding $8.6 billion.
• The backlog is expected to increase by roughly $402 million per year due to inflation and continued facility aging.
• Without sufficient funding, the CSU will continue to face growing delays in urgently needed repairs and capital upgrades.
• Many facilities are more than 50 years old and no longer meet modern educational or operational standards.
• Inadequate infrastructure hinders the CSU's ability to attract and retain students, faculty, and staff.
• High-demand academic programs may suffer from outdated facilities, limiting student access and success.
• Persistent facility issues disrupt student learning and university operations, while also weakening recruitment and retention efforts.​
  

CSU STRATEGIC PLAN PRI​​ORITIES

Following a more than year-long strategic planning process, a final systemwide strategic plan will be presented to the Board of Trustees at the September meeting. This comprehensive plan is designed to guide the CSU through a period of transformation while staying true to its mission and maximizing its impact for students, campuses, and the state. A guiding framework for alignment across campus-level plans while allowing universities to address the unique needs of the communities they serve, the plan has four strategic objectives:

• Strengthen the CSU as the Premier Engine for Economic Mobility and Workforce Durability Through Flexible and Technology-Enhanced Learning Experiences to Improve Student Success
  
• Demonstrate Higher Education's Value Through Financial Resilience and OperationalEffectiveness, Enhancing Student’s Financial Access​
  
• Establish the CSU as the Employer of Choice Through Professional Excellence That Advances System Transformation and Strengthens Student Outcomes
  
• Maximize the Long-Term Success of the CSU’s Entire Community​ Through Statewide Impact and Community Connection
  

To accomplish these objectives, $5.6 million is recommended as an initial investment​​.