Students work at a library on the campus of Cal State San Marcos last month.
Credit: Amy DiPierro / EdSource
The University of California and California State University are facing nearly an 8% reduction to their state funding for 2025-26 under Gov. Gavin Newsom’s budget proposal unveiled Friday, raising concerns about the impact on their campuses.
Top officials at both of the state’s public university systems immediately warned that the cuts, which were telegraphed in last year’s budget agreement, would result in larger class sizes and fewer available courses. They hope the Legislature will restore some of those funds before the budget is finalized this summer.
UC, which has 10 campuses, would see a decline of $396.6 million in funding while the 23-campus CSU would lose $375.2 million under the governor’s proposal for next year.
Newsom also plans to defer previously promised budget increases of 5% — part of his multiyear compact agreements with the systems — until 2027-28.
CSU Chancellor Mildred García expressed disappointment that the governor’s budget maintains cuts even in light of a rosier state budget outlook than previously projected — and said she hopes that funding will be restored if state revenues improve. The CSU enrolls more than 460,000 students, the great majority of them undergraduates.
“The impact of such deep funding cuts will have significant real-world consequences, both in and out of the classroom,” García said in a statement. “Larger class sizes, fewer course offerings and a reduced workforce will hinder students’ ability to graduate on time and weaken California’s ability to meet its increasing demands for a diverse and highly educated workforce.”
UC President Michael Drake offered fewer specifics but said he is concerned over how the cuts might affect “our students and campus services.” UC enrolls just shy of 300,000 students.
Newsom’s proposal is only the start of the budget process. He and lawmakers will negotiate over the next several months as updated revenue projections become periodically available before the budget is finalized in the summer.
The state’s system of 116 community colleges fared better and would receive $230.4 million in new general funding as part of a small cost-of-living increase under Proposition 98, the voter-approved formula that determines how much money K-12 schools and community colleges receive from California’s general fund. The system enrolled more than 1.4 million students as of fall 2023.
Community college leaders responded favorably to the proposed budget’s support for career education and workforce development. “The governor’s emphasis on career education and recognition of prior learning aligns with our colleges’ mission to assist 6.8 million adults in advancing their career paths through their local community colleges,” Nan Gomez-Heitzeberg, a member of the California Community College trustees, said in a statement.
State funding is only one source of revenue for the two university systems, which also get money from student tuition and fees as well as federal support.
In total, the governor’s budget proposes $45.1 billion for the state’s three higher education segments – UC, CSU and California Community Colleges — plus the California Student Aid Commission, which administers the enormous Cal Grant aid programs and others.
Under Newsom’s multiyear compact agreements, first announced in 2022, UC and CSU were due to receive 5% annual budget increases in exchange for making progress toward goals like increasing graduation rates, eliminating equity gaps in college completion and enrolling more California residents. With Newsom planning to cut funding and defer those increases, achieving the goals could prove challenging.
“In the absence of that incentive, I think we in the equity community and students are going to have to really ensure that we are demanding that our CSU and UC leaders continue to hold the line and honor their commitment to students even in leaner fiscal times,” said Jessie Ryan, president of the Campaign for College Opportunity, a nonprofit organization that advocates for expanding college access in California.
Cal State’s 2025-26 budget request pleaded for the state not to cut its base funding and not to defer the money promised in the system’s previous agreement with the Newsom administration. CSU officials estimated that a 7.95% cut was tantamount to what’s needed to serve more than 36,000 full-time students.
The CSU system sought an operating budget of $9.2 billion, $593 million more than in 2024-25. That includes money for line items CSU officials say they can’t avoid, like increases to liability and property insurance and health care premiums. The budget request argues that a funding cut “would severely constrain” CSU’s ability to deliver on other top priorities, like programming for students’ basic needs and mental health.
In contrast, Newsom’s budget proposal was met with a warmer response from the chancellor of the state’s community college system, Sonya Christian, who said it “supports the priorities” of the system. In addition to the cost-of-living increases, Newsom’s budget includes several new funding proposals for the community colleges. They include:
- $168 million in one-time funding for a “statewide technology transformation” project that will streamline data collection across the system, including automating credit transfers between colleges
- $100 million to expand “credit for prior learning,” under which colleges award credit for skills learned outside the classroom, such as in a job or by volunteering
- $30 million in ongoing funding to expand the Rising Scholars Network, programs that provide services for current and formerly incarcerated students
Friday’s proposal also includes a nearly 8% cut for the California Student Aid Commission, but its programs would still receive a hefty $3.1 billion. Most of that money — $2.6 billion — would go toward the Cal Grant program, which provides aid awards for roughly 417,000 students. The remainder would fund the Middle Class Scholarship and the Golden State Teacher Grant Program, which aids students studying to become teachers who commit to working in high-need schools.
“The governor’s proposed budget recognizes the role of financial aid in students accessing the life-changing opportunities of California’s higher education institutions,” Daisy Gonzales, executive director of the commission, said in a statement.
Christopher J. Nellum, the executive director of EdTrust-West, said the January budget maintains the state’s commitment to educational equity. But he said the state should “aggressively invest more in education and keep California focused on ensuring any new resources advance racial equity” in anticipation of the incoming Trump administration, which has signaled its opposition to diversity programs.
Emmanuel Rodriguez, the senior director of policy and advocacy for California at The Institute for College Access & Success (TICAS), said in a statement that the state must also ensure the Bureau for Private Postsecondary Education is adequately equipped “to shield Californians from anticipated federal regulatory changes that will leave students more vulnerable than ever to predatory, low-quality colleges.” The bureau has the authority to discipline postsecondary institutions if they don’t provide the promised education or prove to be fraudulent.
