four people standing in front of a California flag
Story Budget

Invest in the CSU; Invest in California’s Future

Alisia Ruble

CSU chancellor calls for predictable funding in 2024-25 California state budget.

four people standing in front of a California flag

From left: CSU Chancellor Mildred García, Speaker of the California State Assembly Robert Rivas​, Chair of the CSU Board of Trustees Wenda Fong and CSU Monterey Bay President Vanya Quiñones in Sacramento, California for CSU Advocacy Day February 2024.

CSU Chancellor Mildred García testified in front of the California State Senate Budget Subcommittee #1 on Education in support of the CSU’s budget request March 14, alongside University of California President Michael V. Drake.

In her testimony, Chancellor García reminded legislators that the CSU serves one of the most ethnically, economically and academically diverse student populations in the country—more than 450,000 students across its 23 universities—and that it is California’s greatest driver of social mobility and economic vitality. More than half of CSU undergraduates are from traditionally underrepresented backgrounds, nearly half are Pell-eligible and more than one-quarter are the first in their families to attend college.

“The CSU is a model for serving America’s new majority,” Chancellor García said. “Resources entrusted to the CSU are not an expenditure, but an investment, an investment with dividends measured in social mobility, in more vital communities, and in powering California’s future diverse and educated workforce—all at a scale only the CSU can provide.”

Chancellor García also highlighted key areas where support is needed, underscoring the message that “predictability is as important a currency as the money itself.” The CSU requests that the state honor the funding set forth in the governor’s multi-year compact—either as originally structured or as modified in the governor’s January budget proposal—and support ​an education facilities bond that includes higher education.

On January 10, California Governor Gavin Newsom proposed a state budget that would defer the 2024-25 CSU compact funding commitment of approximately $240 million by one year—until fiscal year 2025-26—to help address the state budget shortfall. Reiterating his commitment to the CSU and to advance compact-related goals, the governor proposes to reimburse the CSU with a one-time payment of approximately $240 million at the start of fiscal year 2025-26, in addition to resuming ongoing compact funding.

State Funding is Key

Unlike other educational institutions, the CSU relies on only two revenue sources: the state’s general fund—which comprises approximately 60% of its core revenue—and student tuition and fees, which remain among the lowest in the country. The CSU also faces increased costs from recent collective bargaining agreements, rising health insurance premiums and costs associated with its steadfast commitment to strengthen Title IX and other anti-discrimination programs​ and to achieve full and timely compliance with NAGPRA and CalNAGPRA.

Considering both the multi-year compact and the five-year tuition plan the CSU adopted last September, revenue projections enabled the university to reach multi-year contracts with its labor unions, which include increased parental leave and a return to salary steps for some unions​.

In addition to deploying difficult cost-containment strategies at both the campus and system levels, the CSU has introduced key efficiency strategies, including an Enrollment Target and Budget Reallocation Plan that will better align funding resources with the realities of shifting demographics and student demand. And it is identifying additional collaboration opportunities among the 23 universities to further reduce costs.

“But without sustained state funding, this work becomes exceedingly difficult—our progress in mission-critical areas will be slowed, to the detriment of our diverse and deserving students,” Chancellor García said. “When students enroll at the CSU, they expect they will receive​ the quality academic programming and student support they need to graduate in a timely manner. These cannot be turned on one year and off the next due to volatility in our ability to pay for them.”​

Investing in California Communities

Earning a CSU degree has the power to change the trajectory of students’ lives, and the lives of their family members. The university provides more than half of all undergraduate degrees earned by California’s Latinx, African American and Native American students combined, and has garnered multiple Top 10 spots in a wide range of national social mobility rankings, including CollegeNET’s “Social Mobility Index.”

At about $6,000 per academic year, CSU tuition is among the lowest in the country. Nearly 80% of undergraduate students receive some form of financial aid, and more than half of them graduate with zero student loan debt. In fact, CSUs have been recognized for a high return on investment in rankings like Washington Monthly’s “Best Bang for the Buck” in the West.

A recent economic impact report showed that the CSU and its 23 universities contribute significantly to California’s economy. In the 2018-2019 academic year, CSU-related expenditures were responsible for supporting nearly 209,400 jobs and $26.9 billion in industry activity throughout California, as well as $1.6 billion in state and local tax revenue. 

The CSU’s more than 4 million alumni contribute significantly to the state’s, and the country’s, economic well-being. Every 1 in 10 California employees is a CSU graduate, and every 1 in 20 Americans holding a college degree earned it at the CSU.

The CSU has emerged from a period of challenge and transition and is now on a steeply upward trajectory thanks, in part, to historic state funding in previous budget cycles.

Its flagship student success effort, Graduation Initiative 2025, has led to all-time highs in graduation rates for students from all backgrounds, and the four-year graduation rate has nearly doubled since 2015, increasing from 19% to 35%. In fact, the CSU has produced a cumulative total of more than 150,000 additional degree-holders since the initiative was launched. Improved graduation rates also mean improved access for future students, and the university is closing the gap toward the state’s enrollment targets.

The CSU also recently completed a systemwide inventory of existing efforts across all 23 universities to support Black student success. The resulting report assesses the many programs in place, highlights current areas of strength that can be scaled across the system and sets forth university action items that align with the recommendations of the CSU’s Black Student Success Report, which will be implemented over the next 18 months.

These are just a few of the myriad examples that underscore an undeniable positive momentum for the CSU, but, as Chancellor García said in her testimony, “sustaining this critical momentum requires the necessary ongoing resources.”

Watch Chancellor García's full testimony.