Our Current Budget Status

California's budget deficit stems from a confluence of factors, primarily a significant decline in state revenue coupled with increasing costs. The state relies heavily on personal income taxes that account for about 60% of the general fund—especially from high-income earners and capital gains tied to stock market performance—which causes revenues to swing significantly from year to year.

While other factors—like voter-approved spending mandates, delayed federal tax deadlines, and rising healthcare costs—also play a role, the single biggest contributor to recent deficits is this extreme revenue volatility. During good years, revenue surges can create large surpluses that often lead to expanded programs or one-time investments. But in downturns, those same revenue streams shrink quickly—creating budget gaps that reserves alone can’t cover.

This boom-and-bust cycle makes long-term planning very difficult. That’s why at Fresno State—and across the CSU—we are preparing now for fiscal sustainability, even as we continue to advocate for consistent state investment in higher education.

The CSU is vulnerable to state budget cuts because it does not have the same level of financial protection as other parts of California’s higher education system. The University of California has constitutional autonomy, and K-16 education, including community colleges, is funded by Prop 98, which ensures a fixed percentage of the state’s budget. The CSU, however, is treated as a discretionary budget item, making it dependent on annual tax revenues or the priorities of the Governor and Legislature. When these revenues decline, as they have this year, the CSU system faces cuts. Compounding this situation is that the CSU competes for state resources with myriad entities that seek its support –from social services to entrepreneurship initiatives. The CSU faced a $218 million gap in funding for the 2024-25 fiscal year. Fresno State’s share of these cuts totaled around $10 million. According to the final 2025-26 state budget cuts to the CSU in 2025-26 are estimated at $144 million, reduced from the $375.2 million initially proposed in January. Fresno State’s share of this reduction is estimated to approximately $7 million.

In addition to the $144 million in cuts from the state General Fund for FY 2025-26, $252.3 million in compact funding to the CSU will be deferred to fiscal year 2027-28. In 2022, the CSU and the Newsom administration established a five-year compact focusing on shared goals. However, due to the CSU’s discretionary budget status, this funding is also dependent on annual tax revenues or the priorities of the Governor and Legislature.

For future projections, the California Department of Finance anticipates a state General Fund budget gap of 6.5% in 2026-27 and 8% in 2027-28. This is important because the state General Fund is a significant revenue source for the CSU Operating Fund.

As we remain committed to transparency and to advocating for Fresno State’s role in educating the Central Valley's students, the President and Cabinet are exploring all possible ways to mitigate this responsibility. 

The negotiated salary step structure is being implemented October 1, 2025.  The specific increases employees expected to see were tied to the CSU receiving full funding in the state budget. If the CSU had received this funding, employees would have been placed at their “target” step, which corresponds to their cumulative length of service in their current classification. Because the final budget included a permanent reduction to the CSU’s base funding, those dollars did not fully materialize. As a result, employees will be placed in the closest step to (and higher than) their current salary.  The CSU is in ongoing conversations with CSUEU to reopen negotiations on Article 20 (Salary) and Article 21 (Benefits) in the CBA.

At Fresno State, we remain committed to advocating for our people. We deeply value the dedication of our employees and believe that fair and competitive compensation is essential to our mission and future success.

In April 2025, President Saúl approved the $495/year increase to the Instructionally Related Activities (IRA) fee, starting in Fall 2025, which will support critical programs and services that promote student success and enhance co-curricular experiences. While we are grateful to the Governor for reducing the reduction to the CSU, and while we see that this is a very positive development, with the 3% reduction and the deferred Compact funding, we will still face a significant permanent cut to our ongoing base funding. Furthermore, the Governor and Legislature have indicated that there are more severe financial challenges for the CSU expected in the coming years. 

The Save Mart Center debt is scheduled to be fully paid off by 2031. While it is part of the CSU systemwide revenue bond program, Fresno State has dedicated auxiliary reserves set aside specifically for this purpose. These reserves are sufficient to meet the ongoing debt obligations.

Pride Points Webpage: Discover highlights of our accomplishments and milestones that showcase the essence of Fresno State.

“The Value of Fresno State” Video in 60 Seconds: A concise, shareable video capturing the heart of what makes Fresno State special- our very own elevator pitch. 

Dear Colleagues,

I’m following up on my message in May to share an update now that Governor Newsom has signed California’s final state budget for the year ahead. This budget directly impacts our work and students, and I invite you to read the CSU’s statement on the budget here.

While California continues to face a significant budget shortfall, the final budget is more favorable for the CSU than what was first proposed. The CSU’s ongoing funding reduction was decreased to 3% (about $144 million) instead of the deeper cuts originally outlined. This reflects the essential role that the CSU plays in driving California’s future.

For Fresno State, this means our reduction will be about $7 million in ongoing funds — much less than our earlier estimate of $19 million. This is good news, and I want to thank each of you who advocated for Fresno State and the CSU. Still, the permanent reduction to our base funding, along with deferred compact dollars, means we must continue to navigate ongoing fiscal challenges thoughtfully and strategically.

To face this financial challenge, I have decided to use one-time funding to cover the shortfall for next year, primarily coming out of our benefits reserves. While we will have to adjust some budgets in the coming year, I have been deeply intentional in maintaining a budget that prioritizes our people and minimizes impact wherever possible; your hard work is the basis for the student success we all experienced back in the commencement ceremonies in May.

I will be very glad to share more details about how we will continue prioritizing the sustainability of our programs, services and student experience in the near future.

How you can help:

As we look ahead, I encourage you to keep championing Fresno State in your conversations. Your advocacy makes a real difference.

As a reminder, here are some great resources to support you:

• Pride Points Webpage: Discover highlights of our accomplishments and milestones that showcase the essence of Fresno State.
• “The Value of Fresno State” Video in 60 Seconds: A concise, shareable video capturing the heart of what makes Fresno State special - our very own elevator pitch.

For the latest updates, FAQs and past budget presentations, please visit our budget resources website.

Together, we’ve made an impact, and together, we will continue to uphold Fresno State’s role as the economic, intellectual, and social keystone of the Valley.

Sincerely,

Saúl Jiménez-Sandoval, Ph.D.

President

Dear Colleagues,

Last Wednesday, the Governor announced the May Revision of the state budget, bringing encouraging news for the CSU. Fortunately, the May Revision reduces proposed cuts to the CSU to 3% or $143.8 million of ongoing funding–down from the 7.9% or $375.2 million cut initially set forth in the governor’s January proposal. This revision reflects the governor’s recognition of the essential role public higher education plays in driving California’s economic vitality and uplift of our communities. However, the $252 million in ongoing multi-year compact funding for the CSU, originally slated for 2025-26, remains deferred until fiscal year 2027-28 to help address the state’s budget gap. 

What does this mean for Fresno State? 

The May Revision reduces Fresno State’s anticipated budget cut to approximately $7.2 million of permanent funds–down from the originally projected $19 million. While we are grateful to the Governor for reducing the permanent cuts to the CSU, and while we see that this is a very positive development, with the 3% cut and the deferred Compact funding, we will still face a significant permanent cut to our ongoing base funding. Specific actions regarding next year's budget will be identified after the legislature passes the final budget on June 15 and I will discuss details during the Fall Assembly.

What’s next? 

Legislative budget hearings will begin soon to review the details of the May Revision. The Governor proposes the California Budget and the Legislature has the power to review and edit the proposed cuts.The upcoming budget hearings will be followed by deliberations and final negotiations with Governor Newsom. The Legislature is constitutionally required to pass the state budget by June 15.

How you can help:

• Contact Our Legislators: Continue contacting our legislators to emphasize the vital role Fresno State plays in our region and advocate for the elimination of all cuts to the CSU. Since the CSU graduates more than 130,000 talented students a year, it is a deeply consequential player in promoting California’s economy. 
• Share your story: Use social media to share how proposed budget cuts could impact you. Include the hashtag #stopCSUcuts and refer to the CSU social media toolkit for resources. 

For the latest updates, FAQs and past budget presentations, please visit our budget resources website. 

Together, we will continue to advocate for Fresno State – the economic, intellectual, and social keystone of our Valley.

Sincerely,

 
Saúl Jiménez-Sandoval, Ph.D.
President

Dear Colleagues,

As we begin the spring semester, I want to provide an update on the fiscal challenges facing Fresno State and the CSU system.

Here’s where we stand after the most recent budget proposal from the Governor to the Legislature on January 10, 2025:

• Background: The CSU faced a $218 million gap in funding for the current fiscal year (2024-25).
• Currently, the Governor has proposed a $375 million cut to the CSU in 2025-26. 
• Fresno State’s share of this reduction is estimated to be at approximately $19 million.
• The Governor has reiterated his commitment to the multi-year compact agreed to in 2022 – valued at a growth of permanent annual funding of $250 million. However, similar to last year, the proposal will defer our 2025-26 compact funding of approximately $252 million to fiscal year 2026-27.
• For this year, we at Fresno State balanced our budget, despite a $10 million budget shortfall. 
• Looking ahead, we are planning for the Governor’s proposed $375 million cut to the system by drawing $13.8 million from Benefit and Compensation one-time reserves to temporarily reduce our campus’ $19 million permanent loss. 
• Furthermore, to protect our teaching mission, I’ve allocated an additional $1 million, from one-time carryforward funds, to Academic Affairs. This leaves $4.2 million in permanent cuts to address.

It’s important to note that dipping into reserves is a one-time solution. While this approach allows us to preserve as much of our campus operations, staff, and faculty as possible for the upcoming fiscal year, it is not a sustainable strategy as the funds are one-time, and not recurring. If these budget challenges persist, we will not be able to rely on the $14.8 million one-time reserves to offset future permanent shortfalls.

Cuts have deep consequences, and in our mission of transforming lives, those consequences are deeply human. They affect our employees, communities, industries relying on a diverse workforce, the state’s economy, and most of all, the students and families we serve—paid for in time, expense, and dreams deferred.

We must collectively advocate strongly against these cuts and for the restoration of compact funding. With state revenues showing signs of improvement, there is hope that the May Budget Revision will provide relief and restore some critical funding to the CSU. This timeline is key as we must now continuously make the case for Fresno State’s and the CSU’s vital contributions to California.

I encourage you to share the immense value that Fresno State and the CSU bring to California’s economy and communities. Now is the time to ensure our voices are heard.

We remain committed to transparency. Please visit our budget resource website for the latest updates, FAQs, and past budget presentations.

Thank you for your continued dedication to our students and mission, especially as we navigate these fiscal challenges.

Sincerely,

 
Saúl Jiménez-Sandoval, Ph.D.
President

Dear Colleagues,

This last Friday, the Governor delivered the May revised budget, and the outcome for the California State University system is very concerning. 

As you recall, based on the California Master Plan for Higher Education of 1960:

The University of California forms part of the California constitution and therefore enjoys constitutional autonomy – they present a budget, and the Governor and Legislator do their best to comply.

Prop 98 appropriates 45% of the Legislature’s budget (revenue comes from annual taxes generated) for K-16, which includes our community college partners.

This scenario leaves the CSU as a discretionary budget line that is dependent upon State tax revenues and vulnerable to budget cuts.

To mitigate this situation, Governor Newsom agreed to a five-year Compact with the CSU two years ago – each year, the State would allocate $240 million to support enrollment growth for the system. 

Given that the tax revenues are not as strong as last years’, the Governor is proposing the following:

1. To postpone the $240 million compact funding (Year 3) from 2024-25 until 2025-26. Each University may be expected to use its own reserves to cover the deferral. Fresno State’s contribution could be approximately $12 million (5%). In addition, the Governor is proposing a one-time budget reduction of $75 million in FY 2024/25.
2. In 2025-26, the State would provide the CSU with that year’s $240 million allocation, plus the previous year’s $240 million that was deferred from 2024/25.
3. Yet, in 2025-26, the State would also implement an 8% budget cut to the CSU. This 8% cut would erode most of the $480 million for 2025-26 to approximately $98 million. A reduction of $380 million, or approximately $20 million for our campus, in FY 2025/26.

What does this mean for Fresno State? 

We will have to implement a hiring freeze and purchasing restrictions on non-essential travel as well as restricting non-essential expenditures, effective immediately. This does not apply to active employee searches that are critical to campus operations already in progress. Any hiring exceptions will need to be approved by both the Division VP/Cabinet member and myself.

Unfortunately, our campus does not have permanent base funding to cover this projected shortfall. The factors contributing to this shortfall include a decrease in actual tuition revenue earned, 55% of the annual cost of recent compensation increases for which Fresno State is responsible, significant increases for electricity (20% increase each year), as well as increases in employee benefit costs.

In addition to implementing a hiring freeze and restricting all non-essential travel and non-essential operating expenditures, I have asked each Cabinet member to develop a budget reduction plan that considers the projected reductions in both FY 2024/25 and FY 2025/26.

I recognize that budget uncertainties cause understandable concern, and I want to commit to all of you that we will provide transparent and ongoing communication as the budget conversations continue. I also commit to you that I will advocate, at every possible opportunity, for our Fresno State and our noble goal of educating our Valley’s brightest.

Sincerely,

Saúl Jiménez-Sandoval, Ph.D.
President