When the money stops coming in, a certain kind of silence descends upon a public institution. It is evident in the language used by administrators, which is cautious and almost apologetic, as well as in the way people speak when they are aware that their next sentence will be poorly received. It’s becoming more difficult to ignore the tone that currently permeates the California State University system.
The biggest public four-year university network in the country, Cal State, claims to be $2.3 billion short. This week’s bimonthly Board of Trustees meeting produced the number, which is not an isolated incident. Since the system first acknowledged that it lacked sufficient resources to adequately instruct its students two years ago, the gap has been widening. Last year, a 6% tuition increase went into effect. Support from state taxpayers also increased. Neither was sufficient.
If the figures came from a smaller organization, they might seem less concerning. However, 460,000 students are enrolled at Cal State. That is a city, not a university. Additionally, the budget gap ranges from a quarter to a third of the $9 billion operating budget, depending on how you divide it. Trustees feel that something basic is failing, and no one in Sacramento appears to be in a hurry to address it.
Assistant vice chancellor for finance Jeni Kitchell told the board, “This growing gap demonstrates why we need immediate action to achieve financial sustainability.” Although the wording is administrative, the meaning is clear. Over 1,200 employees have already left Cal State in the last two years. There is a 7% decrease in student support staff. There have been about 1,400 courses cancelled. A department office with one employee instead of three, a corkboard with fewer flyers, or an advising line that takes a week to return your call are just a few examples of the smaller signs you’ll notice when you walk through some campuses these days.
The political context exacerbates the situation. In order to stabilize the system, Governor Newsom had pledged more than $1 billion in additional state support over a five-year period. Funding has only been allocated for three years. The fourth, which was supposed to be due this year, will now take place between 2026 and 2028. There is absolutely no guarantee for the fifth. Trustee Jack McGrory stated, “We were promised a five-year compact,” with obvious frustration. He emphasized that on the basis of that exact promise, the board had authorized double-digit pay increases for employees. He continued, “The promise was violated,” and you could sense that he was preparing for the unions’ next move.
According to most accounts, what follows isn’t pretty. Federal cuts to Medicaid and potential reductions to financial aid are exacerbating the multibillion-dollar shortfalls already predicted by state budget analysts. To soften the $144 million cut, lawmakers offered Cal State a zero-interest loan; this was a courteous gesture but not a workable solution. In order to pay for utilities, insurance, and contractual raises that are already in place, the system will have to raid its own programs, including those meant to increase graduation rates, if funding is not restored.
Ironically, this is taking place at the same time that more California high school graduates are finishing the coursework required to be admitted to Cal State. There is a demand. The pipeline is operating. The institution is unable to keep up. The interim CFO, Patrick Lenz, asked out loud, “How do we enroll more students if we do not have the resources to hire more faculty, to provide more staff support?” He didn’t really anticipate a response.
As this develops, it’s difficult to avoid the impression that California is testing the limits of what a public university system can handle before something truly goes wrong. Perhaps a budget agreement next year will alter the course. Perhaps not. For the time being, Cal State is operating more efficiently, making greater promises, and hoping that the gap won’t grow more quickly than its employees’ patience. This is what underfunded institutions always do.
