Senate Budget and Fiscal Review Subcommittee No. 1 on Education
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Senate Budget and Fiscal Review Subcommittee No. 1 on Education California State Senate
Follow its sittingsSpeaker 2
Governor Newsom's state budget proposal acknowledges this. We're heartened that it includes a base budget increase of 7% and a restoration of 130,000,000 base budget deferral from the current fiscal year. The compact funding is essential for UC campuses to provide affordable, accessible education to a growing student body. I'm hopeful that we can build on the progress from the Governor's budget proposal and receive full compact funding. But overall it's a very positive first step.
I'm grateful for the unwavering commitment of the governor and all of you, our legislative leadership, and what you've shown to our students and the university that serves so many Californians. I know another important topic for this committee is Title IX so I want to be clear. The University of California remains committed to preventing and addressing discrimination and harassment of all kinds including sexual assault and violence complying with state and federal law. We continue to address and prevent discrimination in several ways. The UC Office of the President established a dedicated system wide Office of Civil Rights which includes the system wide Title IX office to ensure that our work, education, and patient care are free from sexual harassment and discrimination.
Each UC location also employs dedicated Title IX officers. You can find more detailed information about our efforts including our training for students and employees the written statement on Title IX that we have provided. In the months ahead my focus is twofold. One, to preserve what has made UC an extraordinary university, our world leading research enterprise, great teaching, life changing medical care and to continue to evolve, to innovate, to ensure that this institution is responsive and meets the needs of a changing state. That includes leveraging technology, including AI, to make UC and higher education more accessible and affordable for more Californians.
With regard to AI in particular, California is the birthplace and center of the AI universe and its use is not optional. It is incumbent upon us to be leaders in the ethical and responsible adaptation of AI. Others should not define this for California. I look forward to discussing these issues and more with you today and over the months ahead. It's the privilege of a lifetime to lead the University of California today.
As stewards of UC in this critical moment in our history, the Board of Regents, our talented faculty and staff and I plan to meet these challenges together guided by the values that have shaped UC across generations. I'm delighted to have the opportunity to be with you today and I thank you again for all you do for the University of California and the State of California.
Speaker 3
Good morning, Buenos Dias, Chair Perez and members of the subcommittee. Thank you for the opportunity to speak with you today. Chair Perez, I want to mention at the outset that the CSU is both proud and honored to have a CSU alumna serving in this role, especially one whose professional life has been dedicated in such large part to serving as an advocate and champion for California students from all walks of life. As requested by the committee and in alignment with our shared priorities, I want to begin my remarks by providing an update regarding the CSU's ongoing work to strengthen our civil rights services across the system. I am pleased to report that we have made significant investments and taken meaningful steps in this regard.
We have implemented all but one of the state auditors recommendations from the 2023 audit and we are on track to complete the remaining recommendation which is implementing a system wide case management system by this summer. In addition, we have expanded oversight at the Chancellor's Office establishing five teams that partner closely with campus civil rights offices to improve the quality and consistency of services provided to students and employees across the system. While responding promptly and effectively to discrimination and harassment remains one of our highest priorities, prevention is equally critical. We are strengthening these efforts through training and education that clearly communicate behavioral expectations and help prevent misconduct before it occurs. Nearly every campus has at least one dedicated prevention and education specialist and the chancellor's office has established a senior leadership role to support and coordinate this work system wide.
We are also improving the quality and consistency of investigations through a shared investigator pilot program and the creation of centralized investigator positions at the Chancellor's Office. These efforts build internal expertise, reduce reliance on external contractors, and support timely and effective resolutions. I am happy to address any questions you may have regarding this work and I am accompanied today by Vice Chancellor and Chief Human Resources Officer Frank Ultalte, who could provide more granular details. And now, I turn to the CSU budget needs and priorities. But before addressing the twenty twenty six-twenty twenty seven budget, I want to express my sincere gratitude and heartfelt thanks to this committee and your legislative colleagues for your support to decrease the budget reduction that was initially proposed for the CSU last year.
Your support matters to each of our 22 universities and every one of more than 470,000 students. As for this year's budget, I want to thank Governor Newsom for taking a clear and powerful stand for public higher education in his budget proposal. This is greatly appreciated and a much needed action, especially in light of the real and potential disinvestment, legal action and threats against the CSU's core values emanating from our nation's capital. The Governor's proposal also represents a prudent investment in California's future. As you know, the CSU's California and the nation's greatest engine of socioeconomic mobility.
This is reflected in every measure of social mobility including CollegeNet's highly respected social mobility index. In addition to the number one ranked university Cal State San Marcos, eight of the top twenty and ten of the top 25 in the 2025 ranking are CSU institutions. The CSU is also the nation's largest four year higher education system. Each year nearly 125,000 graduates walk across a Cal State commencement stage and into California's workforce. Remarkably, one out of every 10 employees in this state is a CSU graduate.
The CSU's economic impact on California is massive. A 2025 Economic Impact Report, the most analytically robust study we've ever commissioned, confirms that CSU related spending supports over 210,000 jobs and $31,600,000,000 of industry activity in addition to generating $2,300,000,000 of state and local taxes. Put another way, for every dollar the state invests in the CSU, we generate a return of approximately $7.70 in industry activity. A figure that jumps to more than $35 when you include alumni earnings. State resources entrusted to CSU have always been a prudent investment.
But my message today is that perhaps now more than ever, the funding set forth in the administration's budget proposal is the right investment at the right time for the CSU's diverse students we are so honored to serve and for California. The CSU priorities are clear. As approved by our Board of Trustees and set forth in our new strategic plan, we will focus on growing enrollment with increases to financial aid to support these additional students. We will provide all of our world class faculty and staff with much deserved compensation increases and use the results of currently ongoing faculty and staff studies to specifically address deficiencies that are identified. We will take steps to address our massive backlog of critical deferred maintenance of our facilities and infrastructure needs.
We will also continue to partner with our sister higher education segments to broaden our collective impact including working collaboratively with California's community colleges to explore ways to efficiently and sustainably grow the number of bachelor's degree holders and hope that they will continue into doctoral programs, the practical ones at the CSU and the research ones at the UC. And we will introduce student success programs that meet students where they are and support them not only to and through graduation but into a career or into graduate school. The CSU has recently undergone the most comprehensive and collaborative period of planning in the system's sixty six year history. The resulting system wide strategic plan I alluded to a moment ago, CSU Forward, illuminates our path to serve as an even more powerful engine of economic and social mobility, to deliver sustainable affordability for our students and their families, to be the employer of choice in public higher education, and to broaden the CSU's statewide impact. Built into CSU Forward are clear performance objectives and outcomes milestones to measure our progress and hold us accountable to all of our stakeholders including importantly all of you.
Providing additional accountability is the CSU's new CSU's health fiscal health monitoring process. Its purpose is not only to proactively and holistically monitor fiscal health and enrollment trends across our 22 universities, but also to provide targeted support by identifying and sharing and scaling promising practices or to expand or adapt cost saving strategies already in place. Examples of such initiatives include the integration of Cal Poly San Luis Obispo and Cal Maritime, the San Francisco Bay Region Network that is exploring shared resources across Sonoma State, San Francisco State and CSU East Bay, A multi university collaboration initiative that leverages economies of scale across procurement, information security and benefits administration and our ongoing work to carefully and strategically align the CSU system wide resources with enrollment demand. The CSU's needs are great. We are grateful for the Governor's budget proposal and ask that you support it.
We also ask that should one time funding be available, you consider further investment in CSU so that we can more meaningfully address our more than $8,000,000,000 deferred maintenance backlog and provide our students, faculty and staff with safe and modern facilities to prepare our graduates for the jobs of today and tomorrow. Here is what I want to leave with you as you consider your investment in the CSU. The CSU is prepared like never before to strategically focus state funding to advance priorities that have been thoughtfully and collaboratively developed. Built in success metrics and milestones will allow us to measure our progress with precision and to make adjustments as needed ensuring efficiency, discipline, accountability and maximum impact. Again, the Governor's budget proposal is the right investment at the right time and it's one that will pay dividends measured in the lives of thousands of Californians transformed with a ripple effect that will uplift generations and drive our state's future economic and social prosperity.
I thank you for the opportunity to address you today and I look forward to answering any questions you may have. Thank you.
Speaker 1
Thank you both for your presentation. I apologize that I forgot to call roll, but seeing as we have quorum, a consultant, can you please call the roll?
Speaker 1
Great. Thank you. So we will now go ahead and get started with questions and comments, and I'll go ahead and kick off the conversation. First and foremost, appreciate both of your presentations, both President Milligan and Chancellor Garcia, and know that there has been so much work that you all have been doing, not just to facilitate the work that is happening on your campuses, but dealing with the ongoing challenges that we've been facing with the federal government. And just want to acknowledge not just the policy implications, but also the financial impacts, the significant financial impacts that that's had on both the CSU and the UC.
I wanted to give you all a moment just to speak a little bit to some of the financial impacts that your systems have faced as a result of cuts to grants to minority serving institutions, the impact that that's had overall to student services and if student services have been affected. I know that recently we saw the federal administration drop their lawsuit against DEI programs, so I'd love to hear some of the implications that that's had for you all and the services you're providing. In addition to that, the impacts of HR1 and on the programs that you all are offering and on student aid, I know that HR1 eliminated the Grad PLUS program, which is I know a program that many students that are pursuing higher graduate degrees rely on, and some of the anticipated impacts and ripple effects that you foresee with the implementation of HR1 coming up in the next few months? And I'll give it to either one of you to start.
Speaker 3
Well, to date we have lost more than 200 grants, totaling more than $161,000,000 The minority institution of grants, which is about 161,000,000, 43,000,000 was lost to cancellations of MSI grants. Last year the administration discontinued 29 MSI grants and 19 at 19 CSU campuses. The vast majority of the grants were for Hispanic Serving Institutions and ANAPASI grants. These terminations have halted student support pipelines and equity initiatives such as summer bridge, peer mentoring, tutoring and long standing STEM programs like Ellis Lamp or U RISE. These are widening equity gaps and undermining progress on student success.
Just two examples: Chico State lost a rural teacher training grant removing thousands dozens of student teachers from rural schools in the North State. Cal State LA lost an urban teacher training program that was training more than 300 student teachers at low income schools. This has definitely affected our students and our institutions and we are working hard to make sure that we're doing as much as we can for the students that need these grants so desperately.
Speaker 2
So in the past year we've had 1,600 grants that have been affected by federal withdrawals of support. 1,200 of those have been temporarily reinstated. It's about $830,000,000 worth but they are currently under appeal. Reinstatement decision by Judge Lynn is appealed to the Ninth Circuit. So that leaves about 400 grants that are either suspended or terminated about $170,000,000 in research activity which not only supports the direct research activity but supports salaries for research team members including graduate students, technicians, etc.
Are, so that's over 1,000,000,000 total that is still under threat either being withheld or under appeal today. We face as I mentioned in my prepared remarks challenges, enforcement actions at all 10 of our campuses and system wide with regard to that could threaten funding further. There was a recent lawsuit two weeks ago against, time flies a week ago against UCLA seeking penalties similar to what the government has attempted to impose under the Voluntary Resolution Agreement last August. As you noted, we lost about $12,000,000 in MSI grants for the last year. It has been appropriated for coming year in Congress but no change to the loss that we experienced last year.
So we're doing what we can to try to make up for this with funds internally and look forward to working with the state. We're enthusiastic supporters of research bond proposal that would, while maybe not over time completely filling the void that would be left if the federal government's intentions were successful but it's an enormously powerful statement that California is going to step up and continue the work that is so important even if there are temporary reductions in significant ones from the federal government. We thank you for that.
Speaker 1
Appreciate that. One more question before I turn it over to my colleagues for their questions and comments. And back to what I mentioned regarding the Grad PLUS program, I'd love to hear you talk a little bit about the anticipated impact that that would have particularly on graduate students, on future graduate students that are enrolling in your institutions, one and of the reasons why the Grad PLUS program is so important. And, you know, I've certainly, and I think there's been conversations that I've been having internally about exploring if there is a way for the state to step in to help with fulfilling what that program was doing. So could you talk a little bit about some of the benefits that that program had, particularly for your graduate students on your campuses?
Speaker 2
Yeah, it's enormously important for our graduate students and the areas that have been identified by the federal government that lack support are some of those areas that are absolutely most important for us to address. So this is another case where we are continuing to try to determine how we could make up some of the loss but the numbers are too great for us to simply do that on our own. So we're very supportive of the state partnering with us to try to address that and also hopefully we can have some impact in Washington to reverse what is a very damaging decision for us.
Speaker 3
I agree with President Milliken. You know when you look at our students who are so diverse and you're having this diverse population go on to graduate work, they are the most vulnerable students that we have. And so we are trying to figure out and really analyze how do we support these students in multiple ways and also try to find hopefully donors who will help us to supplement some of the money that is lost for the graduate students that would be going into our workforce in the state.
Speaker 1
Thank you. I'll turn it over now to my colleague, Senator Archuleta. Do you have comments or questions?
Speaker 5
Thank you, Madam Chair, and welcome once again. It was a pleasure meeting you in the hallway, and I'm really excited to meeting you both. This is my first meeting on this committee, and I look forward to many, many years of interaction with you. Of course, Mr. President, I'm so glad to hear that you're steadfast in support of Title IX because it's so important to the diversity that we have here in California And we've got to include everyone, give everyone that opportunity.
And not to identify anyone in a particular way, but as a melting pot that we are in California. And I think that's the strength of not only our Cal State but universities across the state of California. And I'm concerned about obviously as you are about the budget, about some of the things you're doing. And Madam Chancellor, you know, I'm I'm I know that I think we've met your requirements, but I think your concern is deferred maintenance. We can go right down the list of of every school, whether it be, Cal State Long Beach, Dominguez, East Bay, Fullerton, Los Angeles, right down the line, and it's deferred maintenance after deferred maintenance.
And it seems that we were more concerned about the students and faculty and the structure and we didn't pay much attention to the deferred maintenance that is going to be needed over the next few years. So I'm going to be looking at that, to help all I can and encourage our chair to share that, concern with me and and in the committee. And, and, of course, mister president, I love saying that to you, because that, is is a hat that you just got. It's fresh. But, after a while, it's gonna burden you.
I know it will. But the things that I'm so pleased is the experiments that we have in the UC system. I'm the chair of the hydrogen and energy committee and I was able to visit UC Irvine and the multitude of students there. They were working on research and development of hydrogen and the facility that's there, first class. So I think that we have to acknowledge that our systems, both Cal State and UC system, is an investment for California and the investment of our future and giving every young man and woman that wants to seek that higher education the opportunity to get the best and the best.
So I'd just like to know that, you got a friend and we're going to work together. And of course, the governor is going to do everything he can and, you are not to be forgotten. Believe me. You're essential to California. And when we have, my God, what, 02/5000 people that, report to you every day.
And, imagine. So there's the burden, right? You gotta keep them working. You gotta keep them motivated. And, and of course to the students, the grants that are so important.
Housing is important, you know, and we've got so much work to do as we begin the year. We're going to work together. So welcome aboard. Thank you, Madam Chair.
Speaker 6
Yes, thank you very much. I appreciate you being here and meeting the chancellor for the first time. I have a request. Could you guys make this more simple for us? In the CSU system, the head is the chancellor, the campus head is the president, you see the head is the president, the campus head is the chancellor.
Could you get together and not confuse us on this? You don't have to answer that question. I have always wondered about that. But one thing I want to point out is Senator Archuleta's comments about support financially for both systems. Our Republican caucus has a budget priority letter that lists a number of things that are important to us in this year's budget.
And one of them is funding for UC, CSU, and the community colleges. It's a very important priority for our caucus too. So that's really a bipartisan issue. And in terms of the value of UC and CSU to the state, I've been involved for forty years in, among other things, economic development issues in the Sacramento region. And I've had great relationships with each of the presidents and each of the chancellors over the years.
And one thing I say to each one of them is that they are two of the most valuable economic development resources that we have in this region. And it can't be overstated. And I know that is the case for the rest of the state, both regionally in the areas that they are proximate to, obviously, but overall for the state. So your roles are crucial to the strength of our economy, workforce development and the like. So I just want to acknowledge that.
And I know that Senator Archuleta talked about deferred maintenance, and that's an issue everywhere. But I think more acute for CSU. And I look at Sac State, their engineering school. I think their facilities are from the 60s. So that is quite a challenge.
And yet they're still one of the most important economic development assets that we have in the region. Of course engineering is in particular important. So I want to acknowledge that. In terms of resources and efforts by the universities, I know we're going to have a presentation on enrollment. But I want to talk just a little bit about the study that came out recently from the UC San Diego relative to the increasing and very significant efforts that they have to expend for remedial education.
Now I will admit that as a freshman at Cal, I had to take bonehead English, but not bonehead math. It was actually one of the most valuable courses I took the entire time that I was in higher education. But it's become, for UC San Diego anyway, a significant and increasing activity that the university shouldn't have to address. And I know for CSU you don't have classes, but you do have support services when there is insufficient education of freshman students. And that's not a comment on your institutions or what they do as far as education.
It's a comment on it compromises you because you have to spend those resources and that time in education efforts that you shouldn't have to. It could be a comment on your enrollment practices. But it's certainly more a comment on the performance of our K-twelve system that we're graduating kids with high grade point averages and some of them can't compute at an eighth grade level. And that's troubling. I don't know how significant it is.
I'm asking if an audit can be done, which you may or may not know about. But it's in the interest of truly of helping you and helping us recognize where the weaknesses might be. But we did stop using SAT tests and the like a few years ago. This wouldn't happen if we still had that, I would think. So I'm just wondering if you have any comments about that.
Speaker 2
Sure, I do. I think there are a number of issues here to unpack and one of them is the A G requirements for the state and I have been having numerous conversations with members of the legislature outside policy experts and our own faculty who establish the A G through the committee on admissions about whether or not there needs to be some changes in that and particularly in the mathematics tracks whether or not there are changes that are required in 2026 as opposed to the date when they were originally established. And so that is an important charge that we've given to our faculty and they will look at that including looking at the impact on the change in standardized test requirements. The graduation rates at UC have gone up during the time that we have not used the SAT. So whatever the efforts are to help people that present without requisite math skills in particular have been successful.
Now we do want to spend less time on that at our institutions but our responsibility is to serve the entire state of California and the entire state of California has a high percentage of under resourced high schools, K-twelve systems that are not offering the sequence of math required to meet the A G requirements as a freshman in college. So I think there is a systemic issue here. I don't think we can look just at UC or CSU and I don't think a single fix like whether or not we have standardized tests required for admission will address what the real issues are in California and many other places but in California in particular. And so this is, take this incredibly seriously. I was surprised by the same report that you saw.
But we are, our board is engaged in this, our faculty, and we're taking a deep dive right now on what we can do to help address this problem.
Speaker 3
Senator Niello, first of want to say thank you for visiting our facilities at Sacramento State. We appreciate that very much. Having spent my time in Washington before I came here, one of the things I looked at was the NAEP data, the National Assessment of Educational Progress. This is a national issue. If you look at the 2025 data forty five percent of twelfth graders scored below the basic level in math.
This is a national problem and we're paying attention to it. I agree with President Milliken that because of the under resource situation in K 12, some of our districts do not have the A through G requirements that are needed to come into the CSU. And what we are doing is partnering with these high schools to have programs to help the students come to the CSU. The other thing that we're doing is what we do call it early start programs, and I can really talk about this with firsthand knowledge because I was president of Fullerton. And at Fullerton, we had a donor who graciously gave us enough money to have an early start program in paying for residence halls for these students to come and take math before they came.
Of course, all of our campuses are doing something similar in order to be able to ensure that all of our students should have the potential. This is not about potential of our students. It's about having the opportunity to take the courses that they need in order to succeed in higher education. Monterey Bay for example partners with Hartnell and school districts in Monterey College to offer transition to college math program before they come. And so it is up to us to continue to work collaboratively with the K-twelve systems and the community colleges to ensure that our students come in prepared.
And in the meantime, do things like that. Also to have co requisite courses where we actually add a lab or a workshop that will help those students that need it with the courses that they're taking in order to be successful in college. Well we have found in CSU that when we do these special programs for them retention and graduation rates do go up, and we have the data to show that. So thank you for the question.
Speaker 6
Are there any relative to if there is an increasing number of students who aren't fully prepared, especially in math, as entering freshmen, are there statistics of a trend relative to a dropout of students from the lower division level numbers. I mean there's certainly that occurrence but has that increased in the last five or ten years? Do you know?
Speaker 2
Actually the persistent rates for first year students has gone up. I hate to say the number but I think it's ninety one percent first year students advanced to the second year and that's an increase in persistence. Both graduation rates and persistence rates have increased.
Speaker 6
That's good to hear. And I know graduation rates have been generally improving. And here in Sacramento, President Nelson, the former president, was really the first head of that campus to recognize the serious problem that Sac State had. And you can't cure a problem until you recognize the problem, and there have been great improvements. And that's good to see.
This hearing is not about K through 12. But I can't help but make sure that we acknowledge the challenge that we have there. You're right. It is a national issue. But California is in the middle and basically unperforming.
And you mentioned resources. Our spending per pupil is quite a bit higher today than it was when I was in the assembly, but the achievement has gotten worse. Now part of that is the COVID time period. I get that. But in particular, the underperforming, the achievement rates of disadvantaged areas, particularly minorities and particularly African Americans, is a glaring problem that we have in this state.
And Stanford hate to admit it, Stanford they do good stuff. Stanford did a study about fifteen, twenty years ago about education achievement. And at the time they said the issue is not money. The issue is the way that we're pursuing things. So I just again, this is not a K-twelve hearing, but it does create the challenge that you have to the extent that you have a challenge with undereducated freshmen.
So I appreciate your comments, sure.
Speaker 3
I will say that we, because of graduation initiatives 2025 that we put in place, our graduation retention rate and persistent rates have gone up across the board. There's no question that we have to continue to work on the equity gaps, but the equity gaps have also increased during the time that we were involved in this program and we're going to continue that with our new strategic enrollment management program that we're beginning for the system to actually monitor what is going on and being able to come in earlier to help those students as they come to our institutions.
Speaker 1
Thank you and Senator Nilo, appreciate your questions. I want to highlight something I think President Milligan said at the start of this conversation which is this, a lack of ability versus a lack of opportunity and, you know, highlight what Chancellor Garcia had mentioned just in terms of making sure that students across the state have adequate access to college prep coursework because unfortunately that is not something that we see equally available, especially in areas that have large Latino and black populations as well. So it's certainly an area of interest for me. I recognize, as you said, this isn't a K-twelve discussion, but we recognize that all of these things are inherently connected to one another as our students move through these systems. So appreciate the point that you're raising, and would love to continue to discuss that as we continue future conversations, with other sectors.
I know Senator Archuleta had, some questions and comments.
Speaker 5
Yes. Thank you again both. Madam Chancellor, I'm going to turn the page a little bit to share with you both of you. I'm the chair of the Military and Veterans Committee here in the state. And when I'm always looking at our National Guard reserves and and our veterans and so on and their families.
But and I also have pride in what we do in California to serve and represent the rest of our country because of the fact that we have so many men and women that are serving from California. And I too, you know, I've served. I'm a veteran myself and I have two sons that are West Point graduates that are doing well. But want to ask you, Madam Chancellor, the ROTC program. And particularly I'm going to zero in on Cal State LA and the students there have to drive and if you know the 405 Freeway you know the difference it takes hours to get from Cal State LA to UCLA where the program is there that is offered for students to participate in ROTC.
And the reason I'm concerned is because the lack of involvement and if we could have a satellite office and here's what I'm hoping you'd look into because of the people I know within the state of California, the military department and also within the department there in Washington, the ROC, people who run the ROCT program. I've talked to them and they would be willing to fund, participate and involve particularly the minority area there in Cal State LA to participate in that opportunity to serve our country as Army officers as an example where when they reach their fourth year they're making $100,000 and like my sons they've been able to receive masters from Harvard and Yale and doctorates and so on because of the opportunity. So my question is would you be willing to sit with me, look into that and see if we can get involved with Cal State LA and try that as a pilot program? See what we can do.
Speaker 3
Senator Archuleta, thank you so much because my brothers and my nephews are serving right now, so I know exactly what you are talking about. I'd love to sit down and talk to you. So we are very proud to have an office in each campus for our veterans, and so I will certainly look into this and see how we can make this happen, but I appreciate the question. It is something that we are all very much committed to and look forward to working with you.
Speaker 5
Yeah, and particularly the fact that the funding would follow and so we're not asking for the burden of additional funds but so on. It's a partnership.
Speaker 5
I think as the President mentioned, partnership is what we're looking for. And so we know where the weak point is, and if we can fill that gap, whatever it might be, whatever. So but I thank you, and I look forward to having you communicate with me. Absolutely. Thank you.
Speaker 1
Thank you. Before we wrap up this section, I wanted to mention, you know, know that there have been a number of discussions that have happened around federal investigations that the federal government has initiated both against the CSU as well as the UC. I know I have a bill in this space in particular to make sure that we're protecting the privacy of both our faculty and our students And I know that this has been an especially significant challenge for your campuses, and you've even faced threats of lawsuits and other financial impacts. I'd love for you to just talk about that really briefly. I know that there's limits on what you could say, but just about some of the financial impacts that that's created for your institutions and the discussions that you all have had as you've navigated some of these issues.
Speaker 2
Appreciate that, Madam Chair. So I think I mentioned at the outset I am spending a disproportionate amount of my time with lawyers these days and so when we talk about the costs of litigating or responding to voluminous document requests at each of our campuses and for the system as a whole, it is certainly taking an impact not just in legal fees but in the time commitment of our employees at all levels who would typically be engaged in other activities on behalf of the university. Many of these requests that we receive are for very detailed information. We always make every attempt to not provide personally identifiable information on our students and our employees. We are under significant pressure always from different federal agencies who are seeking data at a granular level but we have been very successful to this point in limiting it.
I think you probably saw within the last few weeks Harvard was sued by the federal government yet again. In this case it was because they were slow walking I think was the term used, production of information sought by the federal government. So I fully expect that there will be enforcement actions in the future with regard to UC but we will continue to resist those.
Speaker 3
As you know, we are also dealing with many of the demands from the federal government. It is taking an awful lot of time, not only our attorneys and sometimes we have to get specialists to help us, which makes it even more expensive, but also the time that is spent by the entire executive committees that have to be working with this along with our campuses. So expense, it's time, our time, taking it away from our main mission of teaching and learning. Secondly, there have been requests as you know. We we were actually sent a subpoena.
We were able to only give them information from the campuses. And quite frankly, we told the faculty and staff that they did not have to participate if they did not want to. We have agreed, as you know, that we will be giving information to our faculty and staff if that happens again. We are awaiting to see what happens with the next case and holding tight to see what that's going to cost and the impact on the CSU.
Speaker 1
Thank you, and thank you for the updates that you've provided today. Appreciate it. We are now going to move on to our next section which is issue two, our higher education student housing grant program. Alrighty. Thank you so much.
And whoever wants to get started.
Speaker 7
Good morning, Chair and Members. Alex and I Velasquez with the Department of Finance. The twenty twenty six-twenty seven Governor's Budget does not have any significant budget proposals for the Higher Education Student Housing Grant Program. However, the governor's budget maintains its ongoing support for the program. That concludes my remarks for this item, and I'm happy to take any questions at the appropriate time.
Speaker 8
Good morning, Chairs, Senators. Florence Bouvet with the LEO. As you may recall, the state created a student housing program a few years ago. And to date, the state has approved 10 UC housing projects, including three intersegmental and 12 CSU projects, including one inter segmental, and you'll have the list in the agenda on Page thirteen and fourteen. The segment will provide a status report on the implementation of those projects.
So the only comment that our office has on this item is to highlight that all three highest demand campuses for the UC Berkeley, Los Angeles and San Diego received state support for new student housing facilities. All three campuses also have self supported housing project underway. And as a result, student housing capacity is expanding at those campuses. This is context that you could keep in mind for an issue that you'll hear later this morning when we cover the enrollment of resident undergraduates at those three campuses. Thank you.
Happy to take any questions.
Speaker 9
Hi, Chair Perez, Senator Archuleta, Senator Nilo. I'm Mark Martin, representing the CSU. CSU believes that student housing can be a critical component of the college experience. Access to affordable, safe, on campus housing allows students to focus on their studies, and also be more active in on campus programs and activities outside of classes. We know that students who live on campus have higher persistence rates and higher GPAs than students who do not.
CSU currently has an inventory of about 68,000 beds, and the campuses vary quite a bit in terms of how much housing they provide. A lot of it is dependent on geography and things like that. Our current occupancy rate is about 92% system wide. We have been working hard to build more beds. We've built more than 17,000 new beds between 2014 and 2024, and another 3,600 are currently under construction.
And I want to note here that we do we know we have thousands of students facing housing challenges. Some surveys have suggested one in ten CSU students report housing insecurity. We have programs in place to support housing insecure students, rapid rehousing, emergency housing grants. A lot of the campuses have keep a few beds open in their residence halls for emergencies. About 500 or 5,000 emergency housing grants were provided to students in 2024.
On the Affordable Student Housing Grant Program, we are grateful for the state's support in helping us build more beds, and importantly, a significant number of them below market rate. The program supports 12 projects that will ultimately provide 5,047 beds, of which 3,753, or about 75%, will be below market rate per the parameters of the program. The state is providing ongoing funding to support debt service on CSU issued bonds. In total, the state is supporting $665,000,000 in planning and construction costs, and CSU is contributing about $660,000,000 of its own funding. I'm happy to report that four of the projects are open to students, while seven others are planned to open this year.
The benefits of these programs, these projects are tremendous. At Dominguez Hills, the project is helping support both a new project and an adjacent project that will house a dining facility, which is something the campus has not had before. At Fresno State, the new project includes units for students with children. And innovative partnership between San Diego State and Imperial Valley College is providing beds that can be utilized by both SDSU students and Imperial Valley students, which we believe will strengthen the ties between the two campuses and help transfer. Looking forward, CSU has plans for about 12,000 beds beyond that.
We know we have a need in the out years that we are trying to meet. And I did want to mention at this moment that we and the UC are hopeful that the housing bonds that are being discussed in the legislature now can include higher education. We know student housing helps local communities as well as students. In conclusion, CSU has been and will be on a building boom of student housing. We know how much it benefits students in terms of success in school, campus belonging, and serving a severe need in the most expensive part of college.
Thank you, and I'm happy to answer any questions.
Speaker 10
Took a moment to work. There we go. Good morning, Chair Perez and Senator Archuleta. I'm Seiya Verkanen for the University of California. Thank you for having me here today.
In recent years, housing costs have become a greater share of the total cost of attendance than tuition for UC students. The University of California recognizes that available student housing can contribute to an affordable education. By providing students with campus housing, we can ensure that rents remain stable and provide students an option to the private rental market. The university is grateful for the state's Higher Education Student Housing Grant Program, which helped the university build student housing by providing debt service funding for a portion of the building cost. The state funds allow for a smaller share of the building cost to be passed on to students as rent.
Through these subsidies, it's possible for campuses to offer student housing beds at reduced rental rates. The Student Housing Grant Program bond funding has provided funds for seven projects at the University of California and two joint projects with the community colleges. These projects added over 3,400 reduced rent beds, and because we were able to leverage traditional lease revenue bonds to expand the projects, we're also adding 3,500 regular rent beds to the UC student portfolio. The total cost the total growth apologies in available student housing beds from these projects will be over 7,000 beds. Three of these projects are already completed and housing students and additional five projects will be opening by 2027.
Despite these significant efforts to expand student housing, demand continues to outpace availability. At the start of the fall twenty twenty five term, UC campuses had nearly 10,000 students on student housing waitlists. The high cost of construction coupled with limited availability of undeveloped land have made development of low cost student housing projects a challenge. Many of our campuses are largely built out with available sites only on the campus perimeter or in the surrounding community. At our current funding levels, UC cannot fulfill all of the construction needs at the pace necessary to meet enrollment demands across the system and to address aging buildings and infrastructure.
Additional state support for student housing construction would help in developing more affordable student housing. One option would be a state general obligation bond funding for student housing construction. Campuses have currently identified 13 student housing projects that could add about 7,500 new student housing beds, but there is no funding currently for these projects. I also want to mention that the Governor's budget includes technical adjustment to move $8,100,000 out of the UC budget for funds that would have been managed by the UC for a joint community college housing project between UC Santa Cruz and Cabrillo Community College. That project will still proceed, but the UC share of student housing beds will be traditional student housing beds.
Existing law for the Higher Education Student Housing Grant Program prohibits the University of California from using these projects funds for a P3 development model, and unfortunately most community college districts, that development model is the one that makes sense for them. To ensure that UC can have future collaborations with local community colleges for shared housing, amending the statute to allow UC to participate in B3 housing projects would be helpful. The university will continue to prioritize new student housing, and we look forward to discussions with the state on how we can partner. Thank you.
Speaker 1
Excellent. Thank you for those presentations. I have a couple of questions that I wanted to raise. I think first and foremost I recognize that there are a number of students across the state that are dealing with surging housing costs. We know that there's been a dramatic rise in student homelessness that we've seen across the state as well and especially as our state's housing crisis continues to grow.
Is there any set aside for beds for rapid rehousing or student homelessness needs that you all are addressing at your campuses. So I'd love to hear a little bit about that. In addition to that, I know there's been growing conversations within the community college system about creating student housing for them as well. And I know some of our university initiated partnerships in order to make that happen, so would love if you could speak to that and some of the challenges as well as, you know, lessons learned from going through some of those processes.
Speaker 9
Yeah. The rapid rehousing program, we receive about $6,800,000 from the state for that program, and it provides case management services to help students find housing, financial assistance to support move in costs, rent, and utilities. In addition, most campuses do have partnerships with community based programs which can provide, hotel vouchers, kind of short term and longer term support for students looking for viable housing. We did have about 5,000 emergency housing grants provided in 2024, so we do know the need there is real. In terms of faculty and staff housing, we do have several campuses.
Monterey is the one that comes to mind that do have some faculty and staff housing. I think we're very interested in how to pursue that in the future, and I know there are lots of conversations going on among campuses for more of that, as we do know housing, particularly in some specific areas, is incredibly expensive and is really challenging to hire faculty and staff into some of these areas.
Speaker 10
And similarly, the University of California receives about $3,800,000 from the state annually for rapid rehousing efforts on our campuses. We also have partnerships with community organizations, do case management with students, and assist them with financial items such as payment down the payment of the first month's rent to get into a new housing situation, or a short term payment to allow them to stay in a housing situation. We do set aside beds on our campuses for students in crisis and emergency to stay in the number of beds varies by campus, but there are dormitory beds available for students on a short term stay basis. These are usually just for a week or two, and then they look for a different situation for those students. And in terms of faculty and staff housing, the university has constructed some faculty and staff housing.
Those are constructed at market rates and provided on lands near the campuses often. We are looking for ways to build more of those kinds of housing opportunities and looking for ways to partner with the state as well on additional opportunities.
Speaker 10
With the community colleges, we have several campuses that have built joint housing. We are looking for ways to do more of that because we have identified that as a way to develop a transfer pipeline to have students stay in our dormitories. We currently have three projects underway. Those are at the Riverside one has just opened, so that's already operational and housing 1,500 students. UC Merced is working on a project with the Merced Community College That will be that dormitory will also include advising where students who are staying there who are community college students will receive advising on how to transfer to UC Merced, and Santa Cruz is working on a project with Cabrillo Community College as well.
Speaker 5
Yes. Thank you, all of you, for caring so much about our future and our students. My question that you brought up about the 3,800,000.0 that is needed every year for housing, but you also mentioned bond. And tell me about the general public. Have you reached out there?
What are your feelings that you're are you looking for that partnership within the community that would support the bonds? What's going on with that?
Speaker 10
At the moment, the university has been working with the legislature on the bond. We also have many community groups and alumni organizations that we work with that we've informed about these efforts. And we are looking at the projects that we would be able to build if a bond were to move forward that would allow the university to construct projects. But we are a public agency, and so we have to keep any sort of advocacy to a minimum on trying to get an item on the ballot.
Speaker 5
Well, the other thing that I'd like you to and I'm going to keep using the term partnerships. You know, we have schools that are closing down, some grammar schools reaching out to the communities and finding out, well, listen, maybe that could be the site because the land cost is an issue but if you could get the land just rolled over because it's all the education under umbrella, that would be one. But I think public outreach and reaching out to the community, think you really need to move that forward because that the community involvement, the community colleges are trying to do the same thing. But when we're talking about our Cal State schools, universities that need to interact with the communities, and I think that might help open some doors.
Speaker 10
Thank you for that feedback, Senator. We'll take that too. We'll take those comments and look for those opportunities.
Speaker 6
Something quick kind of relates to community colleges, isn't part of this hearing, I know, but the comments that you made about housing for a community college close to a UC campus where the transfer then can be made easily. I understand that. But historically, the role of community colleges was for a kid graduating from high school to stay at home for the equivalent of lower division education and then transfer to a four year school. And if we're going to be making that choice when the kid graduates from high school as to which, in the case of UC, which UC campus he or she's going to go to, and then pick the community college on that basis and have housing there, it would seem to me that's an investment that maybe we don't really need because they could stay at their home, go to community college there, and still have the arrangement for the transfer, which I know UC and CSU can work with community colleges on that. So one would have to question whether or not that's a wise fixed investment for all of that housing when they could be living at home.
Speaker 10
Thank you for that comment, Senator Nilo. I think some of these partnerships and looking for housing jointly for community colleges and UC and CSU campuses has come about in the last decade or so, as we've seen a shift in who attends community college. The population is a little bit older. Many of them were already on their own, and there was there's been discussion within the last decade or so of a growing number of community college students who are experiencing homelessness and an interest in ensuring that they have some place near their campuses to live. So I think we we're seeing a shift away from the students who are 18 years old who are going to community college and living with their parents, though I believe that's still the majority of that population.
And there are now increasing numbers of community college students who, one, they pick a campus and might actually move near that campus and not live with their parents, or who are struggling to find housing because they're already of an age where they're independent and are having trouble affording housing. But you raise a good point, and I don't want to speak for the community colleges here. Our campuses have identified these partnerships, and the Riverside one, they have had no trouble filling that dorm. You know, they have the full 1,500 kids in there, so or young adults. And so there seems to be a shift in who's attending community college and what their interests are.
Speaker 6
And the rents generated by those 1,500 tenants, that fully covers the debt service?
Speaker 10
That's correct. Our dormitories have to be self supporting. Okay. Or in the case of these state subsidized dormitories, the state is purchasing down a portion of the bond cost, the lease revenue cost, and that allows us to offer significantly reduced rents to a number of students. The reduced rent formula was in statute, and it's set quite low.
Speaker 1
Great. Thank you all so much. I think with that we will move on to issue three, enrollment. Not sure if we anyone here is going to be shifting, but It's
Speaker 7
the same panel. Alex and I once again with the Department of Finance. For the UC and CSU, specifically to enrollment as noted in the agenda, the governor's budget does not propose any changes to the twenty twenty six-twenty seven academic year enrollment target. Additionally, the governor's budget does not set any enrollment targets for the academic year twenty twenty seven-twenty eight as part of the twenty twenty six-twenty seven governor's budget. Additionally, for the non resident supplemental replacement, the governor's budget does include an additional $30,000,000 for the non resident students in twenty twenty six-twenty seven.
However, I will note that for the twenty twenty five-twenty six governor's budget, the administration did propose $31,000,000 ongoing for the non residents, but for the first year of that installment did delay the 31,000,001 time from twenty twenty five-twenty six to twenty twenty seven-twenty eight. So the total ongoing base for that support is 153,000,000 ongoing general fund support. And that concludes my remarks. Happy to take any questions.
Speaker 8
Florence Bouvet with the Relations Analyst Office. For UC enrollment, we have four recommendations. And to provide some context, as Finis just mentioned, the '25 budget act set targets for the enrollment of resident undergraduates at UC for twenty fivetwenty six and twenty sixtwenty seven. UC has reported that it has already exceeded, its current year target of roughly 210,000 students by over 5,000 full time enrollment students and that it has even surpassed the state's twenty six-twenty seven target. So even though UC has exceeded its current year enrollment target, we first recommend the legislature maintain the original twenty sixth, twenty seventh target of about 213,000 resident undergraduates.
And our recommendation is based on a few key factors. First, over the past ten years, UC enrollment growth has been much faster than the underlying demographic trends. UC resident undergraduates enrollment grew at an average annual rate of 2.1%, while over the same period, the population of California high school graduates grew at an annual rate of 0.4% and the population ages 18 to 24 years has actually declined. Second, we also note that there are some signs that enrollment pressures have weakened. Over the same ten year timeframe, the number of application from residents has actually increased, while the admission rates for resident freshmen went up from 60% to 70% system wide.
We also note that UC is enrolling a higher share of the high school graduate population of the state. That percentage went from 7% in twenty fifteen-twenty sixteen to 8.4% in 2024, 2025. Additionally, exceeding the state's targets, so notably in 2025, 2026, while also instituting hiring freeze last spring appears to be contributing to programmatic impacts such as larger class sizes on campuses. And lastly, when the state set these enrollment targets last June, it was signaling that the level enrollment it believed could be sustainably supported on an ongoing basis was indeed 213,000 students. Our second recommendation is to fund enrollment growth separately and on top of any base increase.
Funding enrollment growth separately would improve transparency, accountability and legislative oversight as funding will be directly linked to an explicit enrollment expectation. As the state has traditionally done, we recommend funding enrollment using the marginal cost formula. And under this methodology, enrolling the same number of resident students as set in the budget act would cost the state just under $43,000,000 Our third recommendation is to pause the non resident reduction plan and our recommendation is based on a few key considerations. First, the non resident reduction plan is based on the questionable assumption that at the three highest demand campuses, the only way to accommodate a larger population of resident students is by replacing non resident students. However, the evidence does not bear this out.
First, we note that over the first four years of the plan, those three campuses have enrolled 4,500 resident students on top of the 31 resident students that they replaced. Also, as we covered in item two, there is no evidence that the campuses are facing housing capacity constraints nor do they face instructional space constraints in terms of labs and classroom utilization. Second, we know that the replacement plan is a relatively costly way of increasing resident enrollment on those campuses because replacing one non resident student costs $34,000 while adding a single resident student using the marginal cost formula would cost only roughly $14,000 The difference that you observe between those two figures comes from the fact that the state has to backfill UC for the loss of non resident supplemental tuition. So an alternative to the non resident reduction plan that the legislator could consider would be to fund enrollment of resident students directly. And under this alternative solution, if we were to form the same number of resident students that are currently being added to those campuses, the cost to the state would be $25,000,000 which is significantly less than the current $61,000,000 that is in the governor's proposal.
And that difference, which is roughly $36,000,000 could help address the state's structural deficits. As resident student enrollment increases, the state would also eventually reach the statutory goal of having non resident enrollment account for no more than 18% of the total undergraduate enrollment. Our last recommendation regarding UC enrollment is to hold its enrollment for undergraduate flat in twenty seventwenty eight. Given that the state is projected to have a large deficit in twenty seventwenty eight, having UC enrolled additional students potentially without any additional state support could lead to adverse programmatic impacts such as larger class sizes, fewer course offerings or less academic support. And that concludes our recommendations relating to UC reports.
My colleague will now cover our recommendations for CSU enrollment.
Speaker 11
Good morning Chairpresents, Senators. Natalie Gonzales with the Legislative Analyst Office. CSU's enrollment situation is slightly different than UC's. To provide some context, as mentioned, the twenty five-twenty six Budget Act set resident undergraduate enrollment expectations for CSU for both twenty five-twenty six and twenty six-twenty seven. The governor proposes to maintain those 2,627 enrollment expectations for CSU.
Speaker 11
CSU expects to surpass the state's target by about 3,000 full time equivalent resident undergraduate students. So, rather than enrolling the state's expectation of around 350,000 full time equivalent students, resident undergraduate full time equivalent students, CSU expects to enroll closer to 353,000 students. Given CSU surpassed its twenty five-twenty six target, it would have to grow by less students in order to reach its twenty six-twenty seven target. Under the twenty five-twenty six Budget Act, CSU is expected to increase resident undergraduate enrollment by about 10,000 FTE students in twenty six-twenty seven, but now it would only have to increase by about 7,000. This would be a 2.1% increase in resident undergraduate enrollment over CSU's projected level for twenty five-twenty six.
Despite exceeding its target in the twenty five-twenty six academic year, CSU projects it will fall short of its twenty six-twenty seven of the state's twenty six-twenty seven target by about 2,000 full time equivalent resident undergraduate students. Specifically, CSU projects it will increase resident undergraduate enrollment by 1.4% in twenty six-twenty seven. As a result of all of this, we recommend that the legislature revise CSU's budget year enrollment expectation downward in order to acknowledge these updated enrollment projections. CSU might also have some difficulty increasing enrollment in twenty six-twenty seven due to some soft demographic pressures. For example, the administration is projecting that the number of public high school graduates in California is expected to decline in spring twenty twenty six, which could impact CSU's enrollment for fall twenty twenty six.
Secondly, similar to our UC recommendation, we recommend funding enrollment growth for CSU on top of and apart from any base increase. For example, the state could set a resident enrollment target of 1% for CSU and then provide the associated funding, which we estimate would be around $44,000,000 ongoing general fund. This amount was derived using the state share of the marginal cost formula. Though the legislature is likely to face some difficult choices regarding what ongoing spending to prioritize in twenty six-twenty seven, we do believe there is rationale for prioritizing ongoing spending for enrollment. One reason we believe this is because CSU is already in the midst of making some of its admissions decisions for twenty six-twenty seven.
Finally, we recommend holding CSU's enrollment expectation flat for twenty six-twenty seven for the same reasons my colleague has just mentioned regarding the UC recommendation. Thank you, and happy to take any questions.
Speaker 9
All right. Mark Martin with the CSU. Happy to walk through some of our recent trends in enrollment. I've got a lot to cover here. I'll talk a little bit about our kind of our current student body, talk about a challenge we have in terms of enrollment distribution across campuses, turnaround plans that were required in the 2025 Budget Act.
And then I want to touch on a few innovative enrollment practices that we are conducting that we think will increase enrollment in the coming years. I passed out a chart, and you can see on that chart that we obviously had significant declines during the COVID era, but very happy to say we have rebounded and had tremendous growth in the last two years. And as the LAO noted, we are now above our funded enrollment target by about 3,000 FTE. A little bit on our kind of current trends in enrollment. Transfer enrollment has come back as well.
That was down, during COVID as the community colleges also saw pretty significant enrollment declines. So we added about 4,000 full time equivalent transfer students in the past two years. We have we did see a decline in the number of low income students, but our number of Pell Grant recipients has grown by about 20,000 in the last two years. About half of our students receive Pell Grant. About one third of our students are first generation college students.
And just wanted to note, the number of Latino students has grown steadily and significantly over time from about 160,000 in 2014 to more than 210,000 in 2025. Latinos now comprise about half of the CSU student body, which is reflective of the California K-twelve population. True CSU truly reflects the state's diversity, and we are proud of that. I do want to provide some info on campus by campus enrollment. We are experiencing a lot significant differences among campuses in terms of demand and enrollment trend.
Several universities, mostly in Northern California, experienced declines beginning or even before COVID, and enrollment has not rebounded in the way that was expected or desired. Based on internal enrollment targets set by the system, we now have 13 universities that are above their targets and 10 that are below. This imbalance does pose some challenges. Many universities are seeing significant enrollment demand, while others are seeing lesser demand, which leads to less tuition revenue and resources for those campuses as they are trying to conduct more outreach and programming to attract more students. The chancellor mentioned this briefly, but a bit more detail on an enrollment reallocation plan that we are in the midst of.
We are shifting about 89,000,000 in permanent ongoing funding and 10,000 full time student equivalent, spots from lower enrollment campuses to high demand campuses. We believe this is a prudent and reasonable way to help support campuses that can grow right now, while also continuing to support campuses that are trying to turn their situations around. We are also working hard on turnaround plans for seven campuses that have been the most severe have seen the most severe sustained enrollment declines. These plans were required in the 2025 Budget Act and are part of an overall system wide fiscal health monitoring process that was launched for all campuses last year. The process requires all universities to develop enrollment strategies, multi year budget projections, cost reduction strategies, and responses to other specific fiscal health issues.
Seven campuses will submit turnaround plans. We realize these plans were due by March 1, but we have asked for, an extension to allow for more review, particularly because four of these seven campuses have new presidents who are familiarizing themselves with the plans. These plans will drive the campuses for the next few years, and we want to make sure the new leaders have a chance to weigh in and make sure the plans align with their vision. I can talk a little bit more broadly about the plans if you'd like. I was asked to provide a brief update on Sonoma State, which is one of the seven campuses that we'll be submitting a turnaround plan.
I know that was had a lot of attention last year. The campus had a $20,000,000 deficit in 'twenty four, 'twenty five. The university's budget is balanced this year. That came through some very difficult decisions. And we are appreciative of the funding that was provided to the campus in last year's budget.
And I can provide more detail if you'd like on how that funding will be spent. I did want to mention a few other enrollment strategies that we think will help all of our campuses now and in the future. The direct admissions program was launched recently with between CSU and the Riverside County Office of Education. With a data sharing agreement, we were able to identify all high school seniors in Riverside County that were CSU eligible, and essentially send them, notice that they were admitted to several CSU campuses. This notice went out to 17,000 students, and it led to a 15% increase in applications to CSUs from Riverside County.
With the passage last year of SB six forty, we will be rolling out this program much more broadly. We have data sharing agreements with 20 more school districts, and 17 campuses are participating. I want to also highlight the Transfer Success Pathway program, which is a dual admission program with community college students that guarantees them admission to CSU. This program has doubled in size in the last three years, with significant transfer success in both business and engineering, which have been two majors in the past that have been challenging for transfer students. This is a really key partnership between the CSU and the community college, where the CSU is now much more involved with the community college students as they're working their way through community college, and I'm really excited about that.
A larger term enrollment issue, the Board of Trustees this spring will be considering adoption of three new bachelor's degree programs that we think will meet state workforce needs and also be more flexible for students, particularly older students. The board will consider a new bachelor's of education, which would help more students get both a bachelor's degree and a teaching credential in four years. Additionally, the board will be considering bachelor's in applied studies and bachelor's in professional studies that are aimed at working adults, students with AAs, or students with some college credits but no degree. The bachelor in applied sciences could allow students to achieve a Bachelor's degree in 90 units, instead of the more common 120. We think these are creative programs that will, draw more Californians to our campuses.
That was a lot. I'm happy to take questions. CSU is proud to serve all of California, we are taking numerous steps to be more proactive with students, ease the admissions process, and provide the state with the trained workforce it needs. Thank you.
Speaker 10
You. For the record, again, I'm Seiya Vercannon for the University of California. The multi year funding compact, which was signed in 2022 between the governor and the University of California, promised the university 5% annual base budget funding increases to prioritize the advancement of student focused shared goals. The compact set a goal of increasing California undergraduate enrollment by 1% annually. The legislature reinforced this goal with an annual budget bill language included in the budget acts directing the university to increase enrollment by specified full time equivalent student numbers.
The university has met and exceeded the compact goal for California undergraduate enrollment growth. In fact, not only did we meet the twenty twenty five-twenty six compact goal with fall twenty twenty five enrollment, we already met the twenty twenty six-twenty seven compact goal for California undergraduate enrollment growth. Slide two in the handout I provided shows the undergraduate enrollment growth during the compact. Access to the University of California and the world class education we offer students is important to the Regents and President Milliken. We are proud to increase the entering class of UC students and to have that class most closely reflect California's population than any other class in the University's history.
For twenty twenty six-twenty seven, the university is planning to continue growing California undergraduates. The current plan for twenty twenty six-twenty seven includes 2,721 new California undergraduate students. This enrollment level would exceed the compact goal enrollment. The university's ability to sustain these levels will depend in part on the availability of ongoing state support for campus operations. All enrollment growth costs money, instructors to teach courses and the staff to provide student services and additional financial aid provided are all tied to enrollment.
The compact also set a goal for three UC campuses that are in high demand Berkeley, LA, and San Diego to replace their undergraduate non resident enrollment with California undergraduates until each of the campuses reaches a non resident level equal to 18% of the total undergraduate student body. The compact further specified that the state would provide funding to backfill revenue losses from nonresident supplemental tuition to the campuses and that the goal of replacing nonresidents with California undergraduates is contingent upon the provision of these funds. Receiving funding to replace lost nonresident supplemental tuition is imperative as nonresident supplemental tuition is now a significant part of campus budgets. In fact, each non resident student funds not only their own cost of attendance, but also provides enough funding to provide support for 2.7 California undergraduates. The $1,350,000,000 paid annually by our non resident students is critical support for our campuses.
Also, under the Tuition Stability Plan, non resident supplemental tuition grows with each incoming cohort. The funding provided by the state is fixed and does not grow with time. This means that over time, the replaced nonresidents also represent an opportunity cost for the incremental increases that were never collected. The legislature further defined the compact goal of non resident replacement with California undergraduates in budget bill language as nine zero two students annually for all three campuses combined. This goal was funded for the first three years of the compact with twenty twenty four-twenty five being the last year that funding was provided.
During these three years, the university exceeded the non resident replacement goal specified in the budget bill language. Across the UC system, non resident undergraduate students are now 15.2% of the total undergraduate student body. This is far below the goal of 18% for the system. Admissions for the twenty twenty five-twenty six year took place in the 2025. At that time, the federal government was making rapid changes to international student visas and even halted visa processing for a time.
These changes created uncertainty in international student admissions, and campuses made more offers with the expectation that yield would be lower. This was a miscalculation, and while there were non resident students replaced at the three campuses, was not the full nine zero two students. For graduate students, I want to mention that the University of California is also requesting $5,500,000 in ongoing funding to expand four health professional programs. These are dentistry, optometry, pharmacy, and veterinary medicine. Each of these programs serves an important function in California health care.
Unfortunately, areas of the state are lacking sufficient health care professionals to ensure services can be delivered in a timely way. Expanding UC health professional programs with an emphasis on serving underserved populations would help alleviate the state's healthcare worker shortages in the long term. Thank you for your time.
Speaker 1
Great. Thank you all for your presentations. I have a couple of questions, and I will try to rope them together for purposes of time. You know, think the first question I want to ask about in terms of enrollment is just, you know, concerns that we have with the campuses that are currently going particularly like Sonoma State that are needing to submit, and I apologize, needing to submit their turnaround plans. Now, I know at CSU that you all had requested an extension to be able to submit that, and understand I want to give you all the time to be able to do so.
I do still want to have a presentation from you all and from those campuses to hear about those turnaround plans, so, you know, we will go ahead and make that additional time to do so. But, you know, I want to hear what actions has Sonoma State taken or is planning to take in order to address some of its enrollment issues. You know, looked at these numbers a few days earlier and saw that the campus is continuing to shrink. I know that this has been an ongoing issue, you know, for the last several years, and the same goes for some of the other campuses, CSU Channel Islands, Chico, Dominguez Hills, East Bay, Humboldt, San Francisco. Senator Kibaldin obviously passed a bill that allows for automatic enrollment so that students who are eligible will be enrolled into the CSU, but this is a real challenge, right?
And so I want to know what the CSU is doing to get ahold of this issue and ensure that we're able to turn this around, particularly for campuses like Sonoma State that are facing real challenges. My second question is for the UC system. Now, I know that there were nonresident reductions that the state implemented. That is an 18% cap enrolling nonresident or non California students into its institution, and San Diego has not been meeting those numbers. In fact, they very far exceeded some of those numbers that they had.
Now, I've spoken with staff and they've indicated to me that that was because San Diego State decided to offer an increased number of offerings to international students because they had thought that there may be a possibility in which those international students would elect not to attend a UC because of concerns about immigration policies related to the Trump administration. Obviously that did not happen, so I want to understand how San Diego State is going to be reconciling the fact it's no longer meeting the 18% cap that the state put in place to limit the number of international and non California resident students that it's enrolling. So if we'd like, maybe, CS, you can start first, and we'll move to the UC.
Speaker 9
Yeah. On the turnaround plans, we apologize, and we will have those plans in by the end of the month, and we are happy to come back and talk about them, you know, as whatever is convenient for the subcommittee or any of the legislature. Sonoma State, and I can talk sort of broadly about, I think, a lot of enrollment practices that we are engaging on in all of these campuses, including the direct admissions that you mentioned, Senator, that we're very grateful for the legislature's support on that. That will begin in full in fall this fall with 17 campuses engaged in that. And so we're very helpful hopeful that that will increase enrollment.
So we are doing much more around partnerships with K-twelve districts and community colleges. We're also, I think, very focused on ensuring retention. And so we have investments in proactive advising, learning communities, culturally responsive student success programs, early alerts, and basic needs to support retention. But we are doing more targeted outreach, streamlining readmissions policies, offering completion grants, and developing blended online transfer in place, nursing, career connected programs aligned with regional labor demands. We're doing more internships, employer partnerships, and career readiness initiatives.
A lot of the campuses, as I mentioned, the system is considering other types of bachelor's degrees. I think campuses across the state are adding STEM degrees. We the board approved 22 new STEM degrees in the last couple of years, and I think that we'll be considering some more this year. A lot of campuses Humboldt, for example, is adding a community health bachelor's degree and a STEM education bachelor's degree. So I think it's a multi pronged approach.
We need to attract more students with programs that they can see where they're going and to a job or grad school, and that's a big commitment on behalf of the CSU. We also need to make sure more students stay in school throughout their time, and so we're investing in those kinds of practices as well.
Speaker 10
And thank you for your question on non residents. I want to clarify something about the process in terms of the states placing the 18% cap. The initial cap came from the UC regions, and the three campuses that were above 18% were allowed to maintain those original percentages for a time, and then the state wanted to move downward to 18%. The 18% goal was for twenty six-twenty seven, to be reached by twenty six-twenty seven, with the state providing funding for those non residents that were reduced on the campuses. So San Diego started at in twenty twenty one-twenty two at 23.6% and for twenty five-twenty six they're estimated to get down to 19.6%.
So they moved from twenty six twenty three point six to 19.6, so they've made some progress there. The state has currently funded San Diego to get down to 20.5%. So for the 2526, the funding wasn't provided. The campus did increase their non residents a little bit partially due to this visa issue that I referenced during my remarks. The intent is definitely to not grow non residents.
We the governor is proposing $61,000,000 for the UC system to continue the reduction at these three campuses, and the LAOs referenced that this is an expensive way to continue resident enrollment growth. At the moment, non resident tuition is $39,270 per student, and the total fees paid by non residents, the total system wide fees, are at $54,858 That compares to the 14,000 per student that the state pays for a new resident student. So, the replacement funds, we look forward to receiving those and continuing the progress on getting down towards 18%.
Speaker 1
I appreciate that, and I just want to note, and, you know, it is my goal to make sure that, you know, I'm getting you all the dollars that you need so that you can expand access. I know for so many students across the state, getting admission to the UC system is a golden ticket. It is a life changing event for many students because of the kind of economic mobility that students experience when they go to the UC system or the CSU system. And so, you know, I want to make sure that we're allowing that to happen, but also want to be mindful at the same time of the rules that we've set in place and the very obvious fact that UCSD is out of line with the other three campuses, right, UCLA, UC Berkeley, who are doing their due diligence to follow the guidelines that were set in place. In regards to the campuses that have had to submit, you know, turnaround plans, and you know, I look forward to that discussion.
I recognize that you need more time to prep and hear all of the things that you all are potentially working on, looking at increasing the number of programs that are being offered that are regionally significant and related to some of the local workforce needs of the region. I also want to be clear that I think what I'm expecting to see when you all come back to us with this presentation is a real plan over the next three years as to how this is going to get resolved. You know, I think that we've been discussing this now for a very long time, and frankly, we haven't seen a lot of movement. And I'm seeing trends at our community college system where we're seeing enrollment rapidly increasing. We're seeing the same thing at the UCC system, as well as many of the CSU campuses, and so we know that there are students there, not just here in the state of California, but all over the country that are excited and eager to come to our prestigious public universities.
And so I really want for us to think creatively about how we address this issue, and I want to see the CSU take a stronger role in leading in the recovery of these campuses, because it feels like we're moving in a little bit of a circle, and I don't want us to continue to just have conversations without any real results. Did you want to make a comment?
Speaker 9
I hear your concerns, and I think what you will find is I think all of these campuses are doing many creative ways to reach out to local partners, offering more and different programs, and we were happy to discuss that with you.
Speaker 5
Yeah, I'd like to go back to a couple of things you had mentioned. We talked about our K-twelve. We talked about education and the need at the bottom to take it all up to be competitive to get into schools. But we also talked about the teachers and the degrees that are needed and especially in credentials. You had mentioned the four year program that someone could take on that career and complete four years and have the credential and the degree that will open up the future job placement that they should all be looking for.
Is that feasible?
Speaker 9
Senator, I think that was me. The board is considering a new four year bachelor in education program. But, yeah, I think CSU is very dedicated to producing more teachers. We produce about 7,700 per year. We are doing a lot to increase partnerships with community colleges, because we know most I think a majority of the teachers start at the community college and then transfer to CSU.
So we're doing defined community college CSU pathways. The CSU mathematics and science teacher initiative produces about 1,000 STEM teachers annually. So we're very focused on specifically STEM teachers. We know that's a shortage. We have we're helping increasing the number of rural teachers too by offering our programs in communities off of campus.
San Diego State offers teacher prep programs at its Imperial Valley Center. In Yukaya, Sonoma State offers bachelor's degree and multiple subject credentials through a Mendocino College partnership. So I hear you. I think we are trying to address that and increasing and improving those programs, particularly with partnerships My with the
Speaker 5
point is if we're going to fix this problem, you know, we are the fourth largest economy in the world. And we talked about AI, we talked about STEM engineering, everything else. And it all goes back to the instructors, the teachers, good quality teachers. And that's where you're all responsible for it. I'll be quite honest.
And we're looking to you to make that change that the school districts can receive these teachers fresh out of your arms, I would say, and ready to hit the ground running and change our educational level because as my colleague had mentioned, you know, we're somewhere in the middle, I think. But the only way to reach the top is because of what you're able to produce. And so we can pay them well, we can educate our children well, and they can have a future and as a career, as a teacher. I'm hoping you take a good hard look at that. Thank you, Madam Chair.
Speaker 1
Senator Nilo, did you have any questions or comments? Excellent. Okay. Well, that concludes this section. We will now move on to Issue four: Core Operations and Governors oh wait, before I move on, DOF, Elio, did you have any comments on the last discussion?
Okay. Issue for core operations and governor's budget proposals.
Speaker 7
Once again, Alex Ana Velasquez with the Department of Finance as it relates to UC and CSU cooperations. A bit of background, the twenty twenty five-twenty six governor's budget proposed roughly an 8% ongoing reduction for base for UC and CSU, then the May revision at twenty twenty five-twenty six brought that down to 3% ongoing. However, as part of the final 2025 budget act, the legislature and the administration adopted a 3% base deferral one time from twenty twenty five-twenty six to twenty twenty six-twenty seven. The governor's budget now proposes to defer that an additional year from twenty twenty six-twenty seven to twenty twenty seven-twenty eight. Specifically for UC, this means $129,700,000 one time general fund.
For CSU, 143,800,000.0, one time general fund. Similar to the 2025 Budget Act, the 2026 Governor's Budget allows both segments to request a short term zero interest general fund loan in order to make up for this deferral. This concludes my remarks, and I'm happy to take any questions at the appropriate time. Thank you.
Speaker 8
Florence Bouvet with the Legislative Analyst Office. Item four, given that the Governor's proposal and our recommendation that's similar for CSU and UC, we'll be covering them jointly. And we only have one recommendation, and that recommendation is that the legislature retires these payment deferrals as soon as one time funding becomes available. Doing so would return UC's and CSU's state payment to their regular schedule. It would eliminate the associated state debt obligations and it would reduce Altius budgetary pressures.
Thank you. Happy to answer any questions.
Speaker 9
And I will discuss CSU's current fiscal situation and challenges and what we are doing to address them, and then I can talk in the next section about what we do with the Governor's compact funding. A few facts. State General Fund is about 57% of CSU's core funding, with tuition comprising most of the rest. More than 75 of CSU spending is employee compensation. And I want to note that with stable ongoing increases, we have been able to increase compensation in most recent years, including 5% increases in 2023 and 2024.
Expenditures on employee compensation have increased by about 1,100,000,000 in the last four years as compensation increased by about 17%. Also note that about 10% of CSU spending is on financial aid. We spend more than $1,000,000,000 per year on the state university grant and other aid programs. And so 85 of our spending is on employees and student aid. And when we start to get cut, it makes it very difficult to make cuts that don't impact our employees or students.
As you know, after three years of predictable solid funding increases per the compact and legislative support for funding, last year marked a divergence from that, and we sustained a cut to our ongoing base budget. We did accept the one time state loan, but this pause in new ongoing funding at the time when we were experiencing both tremendous enrollment growth and rising costs was a challenge. At the same time as this lesser state funding, as the chancellor noted, we did receive federal cuts as well. So entering the twenty five-twenty six budget year, we estimated a gap of about $164,000,000 between expenses and revenue. We took action in the summer to protect campuses as best we could.
The chancellor's office took an 8% cut, while campuses received a 1.8% reduction. To deal with this lesser funding, both campuses and the system have been engaged in all kinds of cost saving measures, and I think the chancellor mentioned several of those. The big system wide efforts are the integration of Cal Maritime with Cal Poly procurement alignment, which has already saved $20,000,000 and was just launched in January and the San Francisco Bay Network Bay Area Network, which combines administrative functions of three campuses with a goal to eventually get to 15% to 30% savings. Our challenges are serious, but we are taking them on at scale. I did want to mention two well, one other issue, and that's already come up.
Obviously, the facilities issue is a real challenge on every single campus, the $8,600,000,000 in deferred maintenance, including more than $2,000,000,000 in issues that we've identified as safety and health, things like inadequate fire hydrant pressure, electrical infrastructure, outdated fume hoods in science labs. We also have $31,000,000,000 in cap outlay plans, including numerous new buildings. Sacramento State is on that list with a new engineering building that we really need to better train today's students. It's on our list. Yeah.
Turning to 2026, 'twenty seven, we again face significant costs that we must cover, including things like health premium and insurance increases, utilities, previously agreed to employee compensation increases. These costs total about $320,000,000 I did want to make a final broad comment on CSU's budget. In 2023, the CSU convened a work group to review the system's cost structure and noted that we are challenged by several issues. Campuses are supporting a growing number of student needs, from basic needs like food and housing to mental health that weren't provided in the past, while also trying to expand high cost programs in STEM and healthcare, while also working to increase graduation rates and reduce time to degree to help students move more efficiently through college and career. These pressures are real, and campuses are struggling to meet this moment based on the funding we receive.
The study at the time used a model developed by the National Center for Higher Education Management Systems and concluded that we were spending about $1,500,000,000 less than we should be, given the types of students we serve and the programs we are trying to support. Our needs are significant. I will end here, and next item, we'll talk about how the governor's budget funding would address us and compact outcomes that we hope to build on with increased state support. Thank you.
Speaker 10
Thank you. The University of California is thankful to Governor Newsom for the strong January budget introduction that funds a partial fourth year of the compact, the full fifth year of the compact, and restores the 3% base budget deferral from the current year. This represents a 7% base budget increase for the twenty twenty six-twenty seven budget year and the restoration of the deferral in addition. These funds are a critical step in allowing the campuses to support operations and provide students with excellent academic quality and student services. The University is grateful for this support for our academic and student services.
We request that the legislature approve the governor's budget and also in the budget year provide the compact funding that is currently being further deferred. The compact based budget increases were intended to accomplish three things: to fund enrollment growth, allow the university to invest in critical student services to help improve student success, and to cover core operating expenditures for the campuses. Slide three of the handout I provided shows the main campus cost categories. As this slide shows, about 71% of budgets are for salaries and benefits, with another 13% for financial aid and 6% for bond payments. And the 10% remaining is for other items such as maintenance, utilities, travel, and other office supplies.
The governor's proposal comes at a heel of a year where the university received no new state funding. In twenty twenty five-twenty six, the University was held flat while the core operating expenses grew due to inflation and COLAs for employees. In fact, during the current year, core operating costs are estimated to increase by about $343,000,000 of which the majority is employee salaries and benefits. The unallocated core funds reserves the system wide has are not enough to cover these shortfalls. UC campuses have approximately $155,000,000 in unallocated reserves, which is only enough for about four days of operations.
These reserves are not significant enough to cover new campus expenditures while we wait to receive the deferred funds. To manage prior deferrals and flat funding, campuses have already implemented hiring freezes, eliminated positions, delayed projects, eliminated most travel, cut administrative expenses including a 10% cut to UC Office of the President, and undertaken significant cost containment measures. Campuses do not have the remaining capacity to absorb further unfunded cost growth without direct consequences to students and the compact goals. As I mentioned in the previous item, the University of California has significantly increased California undergraduate enrollment as directed by the legislature and the governor. Slide four in the handout provided shows the available core funds per student over time.
Core funds support our campus operations and when we discuss available funds, we subtract those funds that do not get spent directly on the campus operations including financial aid, bond debt service, and retirement fund contributions. Over the last twenty six years, the university has seen significant increase in available core funds, both through state support and student tuition and fees. However, during this time the university has also grown enrollment significantly. When the increased enrollment is taken into account, over the last quarter century there has been a steady decline in available dollars per students. To avoid further erosion, it is important that the university have sufficient funds to cover inflationary cost increases.
The proposed budget pushes deferrals from twenty twenty five-twenty six to future years, but those funds are needed to support the students the university admitted in the 2025. We are requesting that the legislature repay the deferred compact funds and in so doing fully fund the compact. Thank you for your time today.
Speaker 1
Great, thank you for your presentation. I do want to note I recognize that you know we held the budget flat from last year but there were short term interest free loans that were provided, and I know that both of your institutions utilize those loans and operationalize those funds. So I'd love for you to speak a little bit more to what some of those loan funds were utilized for, and also how you plan on operationalizing some of that funding if we were to approve the proposed governor's budget currently.
Speaker 10
I'll go ahead and start with that. At the University of California, we took out the loan, and we advised campuses to spend it on student services, and specifically anything that could be potentially one time where there was a cut due to loss of ongoing funding, and if there was some kind of a programmatic expense where the one time funds could be put in because we weren't certain if they were coming back. So we needed to be prepared for further budget reductions. The funds were provided to our campuses based on undergraduate student population size. So we sort of we send them out on, you might imagine, on a per student basis.
And we are very supportive of the LAO's proposal that the state use one time funds, one time revenues right now to repay those loans rather than carry the loan forward. Thank you.
Speaker 9
Yeah, CSU earmarked the funding for employee compensation increases, and we have made those offers to our bargaining units. There is no agreement yet. We are hopeful to reach agreement, but that is what we had decided was the highest priority. We also agree with the LEO's recommendation if there was one time funding that to retire that loan early would be a great thing for the legislature to consider.
Speaker 1
I'm going to go ahead. I have additional questions, but I will turn it over to Senator Nilo. Do you have any questions, comments?
Speaker 6
bar chart for UC relative to revenues and expenditures. There's a similar chart in our staff report that comes from the LAO that shows the trend in expenditures from twenty fifteen-twenty sixteen to twenty four-twenty five. It shows those as a percent of the total as your bar graph does and the twenty four-twenty five is very close to what you show here. But there is a significant increase, at least in the percentage portions, of personnel expenses. But it lumps them all together.
And it would be helpful to know of faculty and staff. There's probably three categories, I'm guessing. There's faculty, there's administration, and then there's support staff like maintenance and that sort of thing. And we can't tell what that is. And from 2015 to 2016, looking at the LAO's graph, I don't know what the change in enrollment's been.
We've got some information on yours, which only goes back about five years or so. So does the personnel cost breakdown compare over, say, ten years or so of the proportion of faculty administration and support over time?
Speaker 10
Thank you for the question, Senator Nilo. You're correct. Salaries and benefits are a major cost driver for the university. Over the past decade, UC faculty increased by about 13.2. And during the same timeframes, campus staff grew by 29%.
So we did see a larger gain or growth in campus staff versus faculty.
Speaker 6
That would be a combination of administration as well as support staff like maintenance workers and the like?
Speaker 10
That's correct. That's correct. In this in the data that I have, academics is separated from non academics, but I don't have the breakdown of the whether or not they're in bargaining units or if they are considered senior professionals. The During that same time, a lot of the reasons that staff increased so much during this time is that the university was emphasizing certain student services, that we were trying to ensure that students graduate on time, and we were adding student services very heavily. During this time frame, our I believe I don't have the number in front of me, but I think our undergraduate student population increased by about 39,000 students during that time.
So that was a big driver in hiring new faculty and hiring staff to ensure that those students had services.
Speaker 6
One of the criticisms of education generally, whether it's legitimate or not, and so it's important to address, is that the expense structure is top heavy. That is, administrators. I'm not here to say that that's the case or that I'm throwing that criticism out. I'm talking about a popular perception. And it's important to know what those various portions of the personnel overhead is and the justification for it.
You mentioned student services, which supports the faculty work. And that's an important aspect to emphasize in terms of justifying the relative burden of faculty administration. As I said, I'm dealing with a perception, and it's important to address.
Speaker 10
For the record, Senator Neel, I do have that particular statistic. Between 2016 and 2025, the senior management group for our campuses increased from 149 to 151. So we added two individuals. And that was at a time when UC Merced was growing tremendously. So most of that growth has been in the staff that are actually providing services to students, not in the high level management.
Speaker 9
I will just note, you know, 75% of our expenses are employees. I'm not sure I have the trends in breakdown of employees. I would note the Chancellor's Office budget is about $28,800,000 with an additional 179,000,000 for system wide programs. Chancellor's Office has about 700 staff out of 63,000 employees, so about 1% of total employees. And just as I mentioned, we did take a much larger percentage cut to the Chancellor's Office in this current year to deal with the budget situation and try to help preserve spending on the campus level.
Thank you.
Speaker 10
May I also add, in case it comes up, during this timeframe, in 2016, from 2016 to 2021, the UCOP, Office of the President, budget was frozen, basically. It was line itemed by the legislature and did not grow, and during that time we saw a slight decrease in employees at the central office. So the growth in staff was at the campuses.
Speaker 1
Thank you all for that presentation. That completes Issue four. We'll now move on to Issue five, Multi Year Compact and Governor's Budget Proposals.
Speaker 7
Alex Anaya Velasquez with the Department of Finance. As it relates to the Multi Year Compact, the Governor's Budget displays the administration's ongoing commitment to the UC and CSU by providing $716,300,000 ongoing general fund support for the segment. More specifically, the governor's budget provides ongoing general fund equal to a 5% increase for both systems in twenty twenty six-twenty seven, representing the final year of the multi year compact. In addition, the Governor's budget maintains ongoing general fund amounts adopted in the 2025 Budget Act that partially cover the fourth year compact payment. As it relates to the year five compact payment, this reflects $254,300,000 ongoing general fund for the UC and $264,800,000 for the CSU.
As it relates to the partial fourth year compact payment in the budget year for the UC this is $96,300,000 and for the CSU $100,900,000 ongoing general fund. Additionally, for the fourth year compact deferral of the one time consistent with the 2025 Budget Act, the Governor's budget maintains that deferral for the UC and CSU from twenty twenty five-twenty six to twenty twenty seven-twenty eight. These amount to $240,800,000 one time for UC, and for the CSU this reflects $252,300,000 one time, but as mentioned in the prior item, the Governor's budget allows the segments to issue a request a general fund cash flow loan. This concludes my remarks. Thank you.
Speaker 8
Florence Bouvet with the LEO. So given the similarities in the Governor's proposal for CSU and UC regarding the base increase, we'll be covering both segments jointly. We have three recommendations regarding the government's proposal for the base increase and one final recommendation concerning the role of compact agreements in future budgeting. Our recommendations aim to balance continued support for the CSU and UC segments with long term fiscal sustainability. First, rather than the governor's proposed 7% increase, the legislatures could consider providing a smaller base increase aligned with inflation.
Alternatively, the legislature could decide to provide no base increase. This option does the most to help the state manage its projected out year deficits. We also want to note that even with no base increases, UC's and CSU's total core funding would still be increasing notably as a result of increase in tuition revenue. For UCs, that growth would be 3.5%, while CSU's growth would be 4.2%. These annual increases are roughly in line with historical annual growth at the segment.
Furthermore, even with no base increase, the two segments would be able to address some of their spending priorities. And the two alternatives we just laid out are intended to help the state contain its ongoing spending, given that it's also facing large projected adverse deficits. Even though revenue in the current year are coming in higher than initially budgeted, the state's ongoing structural issue remains significant. Our second recommendation to the legislature is to adopt provisional budget language, earmarking some share of any approved base increase for capital renewal at both segments. Under the governor's proposal, the segments have total discretion in how they use the proposed base increases.
However, as we noted earlier, both segments have backlogs of capital renewal project totaling close to $9,000,000,000 for both segments. Targeting some funds towards facilities would ensure that UC and CSU undertake some capital renewal project in the budget year, which would help in the future prevent more costly repairs arising. Our third recommendation is to remove the outer funding commitment for UC and CSU. The governor's proposes those outer commitment even though the state is projecting budget deficits in those years and no specific funding spending sorry, specific funding plan has been developed showing how those commitments will be covered. Rather than making those advanced Altius commitment, the legislature could revisit UC's and CSU's funding level each year to determine how much it can afford to provide the segment in light of the state's overall budget conditions and competing budget priorities.
And finally, we recommend the legislature avoid entering into new multi year compact agreement. The compacts are intended to provide CSU and UC with predictable funding levels. In practice, their funding levels are determined by actual budget conditions. And this has been the case with UC and CSU funding levels over the past few years. Moreover, the most recent compact has contributed to a series of complex budget actions that have lacked transparency and accountability.
Instead of implicitly endorsing compacts, we recommend the legislature makes its funding decision for UC and CSU annually based on the best information available at the time. An annual approach will preserve legislative flexibility and allow funding decision to adapt to changing fiscal conditions. This concludes our recommendation, and we're happy to answer any questions. Thank you.
Speaker 9
Mark Martin with the CSU. As the chancellor noted, we are grateful for the Governor's proposal and hope we can work with the legislature this spring to adopt a funding level that will truly meet our needs. We know you face difficult decisions and hope you will consider CSU worthy of a strong state investment. The governor's budget will allow us to cover the mandatory costs that I mentioned in the last section, and then pivot to work on programs that will evolve the university and better serve the students of today and tomorrow. The priorities that the funding level would help us support include enrollment growth.
Our plan would be to add at least 3,500 students at a total cost of $58,000,000 This enrollment growth, by the way, along with increased tuition revenue, will allow us to grow system financial aid by $65,000,000 We would earmark some of this funding for facilities. We would use at least $5,025,000,000 dollars possibly $50,000,000 to cover debt service on system wide bonds we would use to address both deferred maintenance and some capital outlay. Our calculations indicate we could generate 300,000,000 to $600,000,000 to address facilities issues. We also, in our priorities, include employee compensation. As I noted, we were able to provide most employees with 5% increases in 2023 and 'twenty four when we received new ongoing funding.
With this further proposal for ongoing funding, we are prepared to work with our labor partners on addressing their concerns, and I look forward to doing that at the bargaining table. Finally, do want to talk about several plans we have in place that this funding level would help us address. Our strategic plan, the Chancellor mentioned, CSU Forward, and the Student Success Framework, our successor to the Graduation Initiative, were both recently released and will guide us over the next several years. Both plans attempt to meet the moment in higher ed when students and the public are demanding more accountability and concrete evidence that attending university is a good investment. The plan includes numerous specific goals, including increasing flexible programs for adult learners, increasing community college transfer by 15%, improving graduation rates, ensuring that students from families with $75,000 or less family income graduate debt free, and increasing industry partnerships and ensuring post graduation careers.
We are focused on things like paid internships, and better and more frequent career counseling, so that students are thinking and working toward a job from the moment they arrive on campus. I want to emphasize that CSU is moving to a student outcome model that is not just based on graduation, but career and or grad school. This is a significant shift. All of these activities will be doable with strong state funding, and I want to transition. I know the chair had asked us to discuss some of the outcomes and advancements we have made in recent years.
I want to note that even though new funding was paused this year, we did not stop working on compact goals. In terms of access, as previously discussed, we have rebounded as a system from COVID and are showing strong growth. The compact called for an increase of 14,000 undergraduate FTS in five years. We've actually added 27,000. I know we started in a declining enrollment environment, but that is tremendous growth in five years.
On student success, the compact goal to improve, dovetailed with the system's graduation initiative, which began before the compact and set specific campus and system wide goals for improving all students' graduation rates and closing equity gaps that were persisting between low income students and students of differing race and ethnicities. Four year graduation rates for first time students have nearly doubled. We saw a 15% gain in two year rates for transfer students, and that led to an estimated 170,000 additional bachelor's degrees. Six year graduation rates are now at about 62%, which is about 10 percentage points higher than our peer institutions around the country. We have work to do on equity gaps.
While four year graduation rates for black students increased by 7% during this period, and four year graduation rates for Latino students increased by 10%, there are still significant gaps in graduation rates. And we will work to address those. We are engaging on all kinds of activities. Second Start, which reengages with students who left CSU without completing. Expanding access to summer school and early start programs, which help students in the summer before they start at our campuses, or helps returning students stay on track.
We have programs. There's a program at CSULA, for example, that has redesigned about 20 courses and provides monitoring throughout the semester and alerts professors and students at the three week, six week, and eleven week mark if they are if students are having trouble, and offers tutoring. And so these are kind of intrusive advising practices that we think will improve student success in some of our difficult to complete classes. On affordability, the number of students graduating without debt is now about sixty five percent. That's up from fifty three percent several years ago.
About eighty percent of our students receive some type of financial aid and more than half pay no tuition. Students who do borrow graduate with an average debt of about $17,000 which is much lower than the national average. And I do want to note, CSU estimates its work to provide faculty and students with open educational resources, has saved students more than $175,000,000 in textbook costs during the compact period. On intersegmental collaboration, CSU is a full participant in the Cradle to Career Data System and californiacolleges.edu, which allows students to link high school transcripts and other data directly to the CSU application. This allows for much quicker admissions information for students.
More than 100,000 applicants in fall twenty twenty five used this process and received a conditional admission allowance within twenty four hours. At the campus level, every CSU has relationships with K-twelve and community college partners that are growing stronger. 16 CSUs have agreements with 49 community colleges to offer concrete or concurrent nursing programs. Other examples of collaboration include Cal Poly offering BA programs in business and sociology on the Allan Hancock Community College campus. Monterey Bay offering a computer science bachelor's degree with Hartnell College in, three years.
And San Diego State and San Marcos are beginning programs at Southwestern College. I want to close with noting a few more facts about the CSU. The chancellor mentioned some of this. The CSU supports more than 210,000 jobs. It creates more than 31,000,000,000 in industry activity every year and generates more than $2,300,000,000 in state and local tax revenue.
We produce about half of the state's bachelor's degrees in healthcare, business, and humanities, And for every $1 the state invests in CSU, more than seven dollars of return to the economy. With strong state support, CSU can enroll more students, support them to graduation and beyond, and help California's economy thrive. I'm happy to take questions on any of this.
Speaker 10
Thank you. Seyah Vercannon for the University of California. Slide five in the handout that I provided includes a list of the compact goal categories and some progress highlights. These goals include increased enrollment, student success, affordability, intersegmental collaboration, workforce preparation, and online courses, all goals also shared and supported by the legislature. The University of California has grown California undergraduates by about 18,800 full time equivalent students since the start of the compact.
This is a major achievement in providing access, and one that was made possible by the certainty of annual base budget support through the compact. Looking at this enrollment growth more closely, we can see that the success story is even better. Latinx students make up 60% of this undergraduate student growth. Native American student enrollment increased by 50% during the compact. Having our student body more closely reflect the population of California is a win made possible by the stable compact funding.
As your agenda notes, over the last decade, the university has made progress in improving our four year graduation rates. While it is too soon to discuss graduation rates for the students who started at the university as freshmen in 2022, The two year graduation rate of transfer students who started in 2022 was the highest in the university's history. In addition, the latest retention rates for 2025 are increasing for all students, with ninety four point five percent reached for transfers. Retention rates refers to students returning to their campus at the beginning of the second year of enrollment and is a great indicator of eventual graduation. Further, with the help of the legislature and the governor increasing state financial aid, sixty eight percent of our California undergraduate students now receive a pathway to a death free UC.
These are significant strides in progress. Additionally, the University has already met all of the compact goals set for improving affordability, increasing intersegmental collaboration, supporting workforce preparedness, and providing access to online courses. We are thankful for the collaboration with the Governor and the legislature in setting these goals and seeing them through. The university is better for them. All of this progress is reliant on stable funding for the university programs to provide timely academic advice to students to assist in resolving emergency situations to ensure campus services are available cost money.
Most of our campus budgets are salaries and benefits. UC had one five hundred and million dollars base budget deferral in twenty twenty four-twenty five, and in twenty twenty five-twenty six all of the compact funding for that year was deferred. This is illustrated in slide six. If the funds that the university was counting on to fund enrollment growth and base budget continue to be deferred to future years, campuses may be forced to slow enrollment growth, increase class sizes, reduce course offerings, and scale back critical services that support first generation, low income, and transfer students. That would directly undermine the shared goals with the legislature and governor set forth and weaken California's workforce pipeline at a time when the economic stability and opportunity matters most.
We are grateful for the funding we have received to date and have made progress possible. We are requesting that the legislature provide all of the deferred compact funds so that we can maintain and continue that progress. Thank you for your time.
Speaker 1
Great. Thank you so much for your presentation and appreciate some of, you know, what you've shared just in terms of outcomes and just overall, you significant it is for the state to make this investment into the CSU system and the UC system because of the impact that it has overall on California students, right? And I think it's really important that we talk about it that way, the kind of return investment that we get from investing into the CSU and the UC system. It's in my opinion probably one of the most significant things that we do for students in the state. I want to point out something that I think is really important and critical to me and that's in terms of the student success and closing some of the equity gaps I think for both the UC and the CSU system.
You know, as somebody that comes, you know from the higher education space it's you know particularly concerning to me that we ensure that our four year graduation rates and our six year graduation rates particularly for black and latino students are numbers that we continue to improve on and it's work that I've done well before I even came here to the legislature. Now you know I continue to see that our four year graduation rates and our six year graduation rates for black students, Native American students, as well as Latino students continue to lag behind white students and that is the case for both the UC and the CSU system and while there has been gains, small gains that have been made, they have not closed those equity gaps that we continue to see persist. And so, you know, I know that there have been initiatives. There's been the Graduation Initiative 2025 at the CSU system. I know that the UC system has also had initiatives, but this is really something that we need to work on, and part of that is, you know, looking at strategies that we've seen our institutions use.
I know there's been a number of even colleges within our own systems that have been really, really successful at improving outcomes and overall success for black students, for Latino students. Part of that has to do with creating that sense of belonging on campus, making sure that there's adequate supports for undocumented students who feel like they are being attacked and targeted by the federal government, and really being intentional about how we're designing programs. Working directly, you know, with faculty and staff on campus who are working with these students, who have a real on the ground perspective in terms of what their students need, and really doing that work. So I really would like to see more significant gains in this realm. You know, when I look at numbers, you know, for example for the CSU system and I see, you know, graduation rates for our black students for four years be at twenty three point six percent and a six year graduation rate be at forty eight point three percent.
Those are numbers that we really have to work on. This is one of the most fundamental things that the CSU system does is provide an education to our students and making sure that they're successful and that we are helping them not just with graduating but ultimately going into the careers that they dreamed and envisioned themselves in is really critical. The same thing goes for the UC system as well. While the numbers for the UC system are stronger for black students, a sixty two point seven percent four year graduation rate and a seventy six point two percent six year graduation rate, that still lags significantly behind white students and their four year graduation rate. There is almost a 16 percentage difference in terms of percentage rates, and so this to me is what is most critical, you know, when we talk about that investment and the kind of impact that it has when we invest into the UC and the CSU system, that investment is realized when our students are successful, and when we're seeing them placed into the kinds of jobs and careers that they dreamed of going into.
And so I want to highlight that because it's something that's really important and critical to me. Whether or not we have initiative to focus on closing these equity gaps, it should be core in our mission to every single thing that we do, and just wanted to share that.
Speaker 9
Yeah, I hear you, Senator. We're not happy with these numbers, and we will we are working hard to address them. I would add a few other things. We have a black student success initiative that is throughout the CSU. I did want to also notice, I think you're right on in terms of campus belonging, and the I think that is really important, and we are working we have Latino Student Success Centers, Dreamer Resource Centers on campuses.
I do want to note two basic needs has been something in the with through the process of the graduation initiative that I think the system really learned was incredibly important, and we actually do have a little bit of emerging data on basic needs. Chico State did a study that found that students who accessed a basic needs service had higher persistence and graduation rates than students who did not, which is really interesting, because you would assume that these are students in real need, and they are actually doing better once they receive a food pantry or housing help or mental health help. Stanislaus State did a survey of students, and seventy five percent of students who said they said basic needs services helped them stay enrolled. So we're seeing that, and I think we want to continue to increase that kind of service as well, but definitely want to continue talking with you about what we're doing in this space, because I think it's critical.
Speaker 1
And I can appreciate that as well. I know, you know, basic needs programs make a huge difference. I think a lot of what our students face, and I can tell you as a student that attended Cal State LA, is challenges in facing that economic anxiety, not knowing whether or not they're going to be able to pay rent or pay for food. And so basic needs services are incredibly critical. I think, you know, for me, I'm very supportive of those programs, and if that is additional investment that you need, then I want to see that communicated by you as the chancellor's office as well, that that is how we're going to improve some of those numbers, but we really need to have a clear plan here in terms of addressing some of those needs, whether it's economic, whether it's creating that sense of belonging on campus, making sure that there is, you know, additional resources if it is legal aid, whatever it may be, but let's be really intentional about that and those outcomes.
We need to see those numbers improve for our diverse students.
Speaker 10
Absolutely. Thank you for your comments, Senator. We agree that we need to close the graduation equity gaps and ensure that all of our students are successful. We do have various centers now on our campuses to ensure that students can feel like they belong, where they can spend time with students and receive services specifically to help them graduate and be successful. We have also started during the compact some very staff intensive programs.
For example, Early Summer Start that brings students to campus to take courses to help them prepare for their college career, and they also learn skills on how to study, how to approach their faculty, how to develop a resume, their learning skills that will be useful for them while they're in school. And we are seeing that those programs are having an impact, that the students who are in early summer start are more likely to persist, and it looks like more likely to graduate as well. They are very staff intensive and somewhat expensive to put on, but they're effective.
Speaker 1
Thank you. And know that those programs make a difference as well, right? We have a lot of students coming into the UC and the CSU system that are the first in their families to go to college, to go to a four year institution like myself. It's a very new experience for a student on campus, and making sure that our students are informed about the suite of services that we provide as institutions that are able to support them through that process is incredibly important, making sure students know that there's a Dreamers Resource Center on campus. I mean, those are key things that you can communicate when you're having some of these first year programs to integrate students onto the campus experience.
So I hope that we can continue this discussion and talk about what's working and talk about how we can prioritize that to lead to stronger numbers and close some of those equity gaps. Senator Nilo, did you have questions or comments?
Speaker 6
Excuse me. First of all, with regard to the equity gaps, I think it's really important that we focus where the real challenge is, and that is the K-twelve system, that so poorly meets the opportunity needs of especially black students, but Latinos also, the achievement gap there is absolutely stunning. And there is, by the way, I guess parenthetically, again this isn't a K-twelve hearing, but it is that's where you from where you receive, obviously, your students. There's a program in the high school and middle school called AVID, Achievement Via Individual Determination. I don't know if people here are familiar with that, but it is a program where students are together as they move through high school.
And those soft skills that you mentioned in the summer programs people call those soft skills. I don't think they're particularly soft. I think they're pretty hard and important. But that's the foundation of this AVID program are those skills that are taught to the kids in addition to the academic learning in order to achieve the academic learning. And the AVID student population completely eliminates the achievement gap.
Totally. There is no difference in performance between white, Asian, brown, and black kids. And the graduation rate from high school to a four year school is like ninety five percent to 100 Remarkable program. But I just want to emphasize, I have to think that if we were to significantly reduce or hopefully completely eliminate eliminate the achievement gap in the K-twelve system, your graduation rates would improve as a result because you'd be starting with better prepared kids at that level where you're having some struggle. So I think it's important to realize that it's not totally your fault that that's happening.
But I'm glad to see the improvements. Question with regard to collective bargaining. Mr. Martin, you've mentioned that a time or two. Is the collective bargaining negotiated from the chancellor's office for all campuses or for each campus individually?
Speaker 10
At the UC, the vast majority of our employee represented contracts are at the system wide level. There are a few small ones that are at the campus level, including campus firefighters.
Speaker 6
Okay. That's just a curiosity question that popped into my mind because I didn't know. But I would have to think that there are different circumstances, particularly cost of living, in various areas of the state. The cost of living for Stanislaus, as an example, is going to be quite a bit different than Los Angeles or San Diego, for example, or the Bay Area. And with a system wide approach, it could create a difficulty in actually trying to meet the needs of employees, perhaps ending up with insufficient settlement for areas of high cost of living or excessive in areas of low cost of living.
How do you overcome that?
Speaker 9
I may turn to a colleague can bring in the room. In the crowd, yeah. I need to phone a friend here.
Speaker 13
you, Senator. Frank Rortarty, I'm the Vice Chancellor of Human Resources. I guess it's correct. You So could
Speaker 13
Okay, thank you, Senator. So, Frank Rortarte, Vice Chancellor for Human Resources. I've been with the CSU for ten months, so new to higher education in this forum. So, I appreciate the question. As Mark mentioned, we do negotiate our contracts system wide, and we negotiate with all the various unions.
And so, they bring all of their perspective locally, and we do have that conversation system wide with the local perspective.
Speaker 6
Are there different levels of pay and benefits at different areas where the cost of living and the like might be significantly different?
Speaker 13
We do look at all types of interests from our union partners, but we do look at this on a system wide level. So there are different challenges geographically and what have you. So we respectfully bargain with them based on their interests. So it could be local, could be system wide, but we take that all into account.
Speaker 10
I can't call a friend. I'm going to do my best to answer this question. The University of California Office of the President negotiates the labor agreements, And in within those agreements, what's negotiated is the percentage of annual increases in the benefits as well as sometimes some nonbenefit items like grievance processes. Each campus has a pay scale for each staff classification, and those pay scales can vary depending on the cost of living within an area. And when the negotiations occur, the pay scales are adjusted for the staff, but they can be different from different parts of the state.
And I really hope I got that right. If I didn't, I will be corrected soon and we'll get back to you.
Speaker 1
Great. Well, I think that concludes all of the issues that we are covering today. Having heard all discussion items and since there are no further questions, we are now going to move on to public comment. If there is anyone in Room 2100 who wants to provide public comment on items that were on today's agenda, please line up at the mic. I'm going to ask that you limit your testimony to one minute and I will put a timer on my phone.
And I will give folks just a second to shuffle around. Okay. Yeah, we can go ahead and get started.
Speaker 14
Okay, are you ready? Yes. Yeah, okay. Hi, I'm Tim Holt. I graduated from UC Berkeley in 1971.
Took me five years to get a degree. A tuition fee of $400 was imposed the last year I was there until then there was no tuition fee. So I graduated debt free and because of that was able to pursue a career in community journalism. In 1975, I founded and published a weekly newspaper here in Sacramento that for nineteen years covered city politics, arts, and cultural events. Couldn't have done this if I left UC with $40,000 or $60,000 in debt because I did not make a lot of money with this community journalism.
So I asked myself why did I get what amounted to a $70,000 scholarship when UC students today have to come up with that amount through part time jobs, parental support, and grant. Do we California taxpayers and state leaders value higher education less? Perhaps so since we currently spend 2% of the state's budget on UC, whereas when I was at Berkeley it was 8% of the state's budget. I think you are trying to make a start toward making UC more affordable, but in place of the flat out free tuition of my years at Berkeley, and I was going to quote from the multi year compact with all the different grants and so forth that you suggest, but it's a lot more complicated. So I'm just here from the Mount Shasta region, came down a couple days ago, to suggest you replace the goal of more affordable simply with free tuition.
And you made a start on that I think with the community colleges already. One more thought.
Speaker 14
Absolutely. Just want to leave you with one of the most persuasive arguments I can think of for increased aid to higher education. Donald Trump gets much of his support from voters without a college education. Thank you very much for listening.
Speaker 1
Thank you, and if we can keep comments to one minute, I'd appreciate it.
Speaker 15
Yes, ma'am. Good afternoon, Carol Gonzales, on behalf of the Cal State Student Association. We urge the legislature to approve the governor's proposed budget for the CSU, and appreciate the commitment to the compact. We also encourage investments in student basic needs, such as financial aid and affordable housing, as insecurities in these areas really hinder success, especially for first time and low income students. Also, in light of the federal impacts, a budget that supports these necessities will help CSU students thrive and positively impact California's workforce and economy.
And, we also want to thank the chair and the members' comments at the beginning of the hearing for their commitment to these systems being funded and being a bipartisan priority. Thank you so much. We really appreciate it. Thank you.
Speaker 16
Thank you, chair and members. Tiffany Mock. On behalf of CFT, a union of educators and classified professionals. We represent the UC lectures and librarians, and we'd like to express our support of the governor's proposal for funding the UCs. We also look forward to further discussions on transparency issues and ideas so that we can further build public trust in how those dollars are spent.
Thank you so much.
Speaker 17
Afternoon. Marshall Nakatani on behalf of United Auto Workers Local four thousand eight hundred and eleven. We represent around 50,000 workers at all 10 UC campuses and Lawrence Berkeley National Lab. We just want to say we appreciate the Governor's proposal for higher education at a time when institutions of higher learning are under threat. We think it's critical to fully fund our state's universities.
UAW is committed to fighting for a fair and equitable workplace through pay equity and rights for international scholars. We strongly support ensuring public higher education is fully funded, and we're committed to working with the legislature through the process. Thank you.
Speaker 18
Hi, I'm Kat Anderson. I'm a student at CSU Chico in the Wildland Management Master's Program. Thank you for your commitment to higher education. We've seen that without adequate funding, the CSU turns to private investments and bonds, and when the CSU takes on debt, it's the students who pay for it through rising tuition costs and student loans. I urge you to support Assembly Member Phong's proposal to fully fund the compact funding for the twenty sixtwenty seven and twenty fivetwenty six budget years, and to please adopt budget language with accountability measures that ensures the funding is allocated responsibly and transparently by CSU management to increase access to and quality of education instead of to administration.
Thank you again.
Speaker 9
Good afternoon. My name is Joseph Witt. I'm a social sciences master's program student at CSU Chico, and want to urge you to support the proposal to fully fund the compact funding for the 2026 and twenty twenty seven budget years, adopt language budget language that ensures CSU management is accountable for their resource allocation decisions by enacting appropriate transparency and accountability measures, and adopt budget language that ensures that new CSU funding is spent on instruction and not on administration. Thank you.
Speaker 4
Hello. My name is Alex Martin. I'm a member of UAW four thousand one hundred twenty three. We represent around 10,000 academic student workers across the CSU system. I am a graduate student at Sonoma State.
And, you know, there's been a lot of talk today about the importance of high graduation or retention. You know, we are the ones we are the tutors, we are the TAs, and we are the graduate assistants who help students graduate. We help students pass their classes. You know, we are the ones who help maintain those high graduation and retention rates. We've been in negotiations for a new contract since June, and the CSU has been refusing to discuss any of our priorities largely because they say they can't afford it.
Well, that's all while they've given enormous raises and bonuses to highest paid executives, But we are heartened by the governor's proposed budget, and we're asking you to support increased funding for the CSU system, but we're also asking that you add guide rails on that funding to ensure that some of that is earmarked for much needed employee raises. Thank you.
Speaker 19
Good morning. Matt Patton representing the California Agricultural Teachers Association in support of the proposed budget and would ask the use of one time funds to pay off loans and deferrals to ensure CSU and UC success in the future. Thank you.
Speaker 20
I'm short. Good afternoon. My name is Lisa Kawamura. I am a twenty eight year temporary lecturer full time at Cal Poly San Luis Obispo. I also serve as chapter president for CFA at my campus, as well as the associate vice president for chapter presidents in the North for CFA.
As a member who has dedicated her life to education, I really encourage you to support Assembly Member Fong's proposal to fully fund the compact, funding the 2026 and 2027 budget years. Adopt the budget language that CSU management is held accountable for resource allocation and enacting appropriate transparency and accountability measures. And adopt budget language that ensures new funding for CSU, spend on instruction and not administration. I also sit on the bargaining team for our union, and I think it's really important for you all to know that we have pushed everything toward all of our proposals to management and they have replied to very little and have refused to answer our calls for more transparency and to fund the classrooms, not the boardrooms. Thank you.
Speaker 21
Good afternoon, madam chair and senators. My name is Jessica Dalton, and I am the vice president of representation for the California State University Employees Union. CSUEU represents 35,000 non faculty staff and student assistants across seven bargaining units. CSU is working to teach the next generation of leaders in every area of our state. Our members play an integral role in student experience and system success, and we are deeply committed to that mission.
I wish to express our support for the governor's January budget proposal as it provides robust funding for the CSU and has continued to demonstrate the state's commitment to funding the compact. I would like to thank the governor for this proposal and encourage the subcommittee to work on ensuring the CSU is fully funded and commitments are maintained. I know this subcommittee and the legislature are grappling with fiscal challenges on the horizon. I would submit that fully funding our higher education system is a critical way to strengthen our economy and revenue in the future. Regrettably, we are not without challenges.
As you know, we continue to work toward implementation of full merit salary steps. It is critical that the governor and legislature direct CSU to implement our merit salary steps completely in consistency with our collective bargaining agreement. We also encourage you to send a clear message to the CSU to establish a fair contract for the 200,000 student assistants who CSUEU are bargaining for in Unit 15. And finally, it is critical that you provide clear budgetary and statutory direction to the CSU to more robustly engage represented employees to strengthen the university. Whether at the bargaining table or through the development of turnaround plans, CSU continues to fall short on engaging and respecting the employees that power the university.
Thank you.
Speaker 22
Hello, everyone. My name is Melina Abdullah. I'm a professor of Pan African Studies at Cal State LA. I'm also the political action and legislative chair for the California Faculty Association, and for nine years, I served as chair of the Department of Pan African Studies at Cal State LA. I want to echo what's already been said, that we encourage you to adopt, Assembly Member Fong's proposal to fully fund, the compact for twenty twenty six, twenty twenty seven, and twenty twenty five, twenty twenty six.
We want to make sure that there is transparency and accountability measures, and we wanna make sure that those dollars go to student services and instruction, not to administration, and this is why. That when we're fully funded, we don't, try to streamline what's offered through the CSUs. We're able to offer a robust offering of classes that allow our students to critically think and become agents of change. One of the things we're proudest of is we get to claim Senator Perez as our alumna, And we wanna have the kinds of classes and offerings that she spoke so beautifully about, but also that helped to shape her into the kind of leader that she is. And many of you are students at Cal States that had that experience.
And so when you fully fund the CSU, when you fully fund the compact, you offer that kind of opportunity for the students that we have. Thank you.
Speaker 12
Afternoon. My name is Megan O'Donnell. I'm a faculty member at Cal State Monterey Bay. I teach constitutional and political history. I'm also one of the associate vice presidents for statewide CFA.
Like my colleagues, I want to strongly support assembly member Fong's request for the current year and 2627 compact funding. Like my colleagues, I want to really emphasize that we desperately need funding to go to students and programs, not to administrative costs. We have to fund the classroom, the libraries, the counseling centers, the coaching fields, not the administration. On my campus, right now, we are in one of the highest cost of living areas in not just the state, but the country. My salary lags behind that of the community colleges, K through 12 and the UC.
It is shocking to me that the CSU when presenting their plans for student success mentioned nothing about a plan to invest in their faculty, which is the driving force of student success, student graduation rates, an overall quality well-being in their campuses, and a sense of belonging. We have to invest in the faculty if we want to drive student success.
Speaker 7
Good afternoon. Michael Andrew here for the UC Student Association. UCSA is seeking support for emergency basic needs funding to staff centers, housing case management, and disability services, as well as to strengthen equity programs that target underrepresented students workforce development and prison system impacted students. UCSA strongly supports the Governor's proposal to fund the fifth year compact agreement and backfill the fourth year deferral. UCSA also strongly supports the SBA nine eighty five eight ninety five, excuse me, research bond by Senator Weiner, and AB 48 deferred maintenance bond by Assembly Member Alvarez, both of which will be necessary if we are going to begin to address federal shortfalls while combating deferred maintenance issues.
Thank you.
Speaker 23
Good afternoon. Thank you. First of all, I support almost everything that I heard from everyone else. My name is Hakim and I'm super grateful to be here. Please forgive me if I'm a little emotional.
I just lost my father a few days ago. But I felt it important to be here because I'm a product of both the side of when the system fails and the side of when the support to education is given. My first contact with law enforcement came at 15. I'm from right here in Oak Park. I found myself in prison for the first time at 18.
And I got out for the last time in October 2020. What saved my life is a brochure that I received while in solitary confinement about underground scholars. And I am now a proud graduate of UC Berkeley with two bachelor's degrees. And I am currently in the dual master's program, public policy and social welfare, finishing my first year. I am the director of a program in Alameda County called Positive Youth Development in which I have 16 formerly incarcerated juveniles who I work with biweekly on a range of things and a lot of it has to do with trauma, right?
A lot of it has to do with addressing the issues that you have to deal with before you can even get to a space of healing. So I would just first of all like to say that I appreciate you and your positionality and I think that it is genuinely a cause, a public health issue, if you will, because education does save lives. Just thank you.
Speaker 24
Good afternoon. My name is Margarita Berta Avila. I'm a professor of education at Sacramento State, as well as president of the California Faculty Association, where we represent close to 29,000 members. I want to just acknowledge that we have approximately 20 CFA members, staff, and, some of our students that are here today also, here in support of of what has been shared and and why we're here today. And as my, comrades have shared, we I'm here also to support Assembly Member Fong's request for current year and twenty twenty six, twenty twenty seven compact funding and the support language to ensure new funding goes to students and programs and not administrative costs.
And the last point I want to make is that this is definitely such a critical step with respect to supporting, the CSU and the other higher education institutions like was shared, but it's also incumbent upon the administrators, particularly at the CSU, to understand that a budget is a moral document. Right? And that they are making conscious decisions in funding presidents and executives while allowing programs, professors, faculty, students to suffer on the wayside of that. So a conscious moral decision. That's something for us to think about.
Thank you.
Speaker 25
Good afternoon. I am professor Molly Talcott, professor of sociology at Cal State LA. I wholeheartedly echo what many of my colleagues, president Berta Avila, shared, about supporting Assembly Member Fong's, proposal for ongoing funding and, thinking about, budgets as moral documents. And, from my position at Cal State LA, agreeing with Professor Abdullah that we're very proud that Senator Perez is from Cal State LA, an alumna. And just to my lived experience at Cal State LA, we've lost something like 200 or more lecturer faculty.
Those are folks who would be writing letters of recommendation to get students into careers. We're currently being pressured to increase class sizes, also not good for students. We hear Orwellian terms like, we're making student centered cuts. I don't know what that is. Meanwhile, there are several positions open for new administrators, a new associate provost, etcetera, etcetera.
And it's an upside down world at Cal State LA. We need to turn it right side up. And I hope that you'll support funding the classroom, not the boardroom. We need to leave a CSU that is better for our students than the ones that currently exist, not deterioration. So thanks for listening to my comments.
Speaker 26
Good afternoon. Michelle Sotisades, UCLA alum and a parent of a Cal State Northridge alum. I'm am here in support of everything that you've heard today. We need to fully fund the compact. We've heard excellent reasons from our from Hakim and others, as to the value of when we invest in education and we make sure that the funds go where they need to be, which is to support the students, we can see the transformation that will happen not just within the individual, but how that ripples out to our entire community, our state, and to the world.
That is incredibly important. I'm asking you as an alum and a parent to fully fund the compact, but also to ensure that the money is utilized correctly in a way so that the administrators do not benefit from that, but that it goes to the students, the faculty, the sports staff, and to the teachers, and thank you.
Speaker 27
Afternoon. Kevin Weir, professor of sociology on the Sacramento campus. I'm also chair of bargaining for the California Faculty Association, and I'm in support of all of my colleagues' comments about fully funding the CSU and the compact, but just funding the bottom line is not enough. It's also about spending priorities within the budget that you fund the CSU with. I can tell you at the bargaining table that when we make any set of demands that have a price tag, management always says, Oh, we don't have any money.
We don't have enough. And it's not that they don't have enough, it's that they have misplaced priorities. You've heard people say, Fund the classroom, not the boardroom. Our working conditions are the students' learning conditions. If you want student success, if you want to close the equity gap, if you want to realize the potential of those students in their communities, then support the faculty, because that's our job.
Our job is to get those students out and whole. And we can't do it without you paying attention, not just to the bottom line, but to the funding priorities within the CSU. Thank you.
Speaker 1
Thank you to all the individuals who participated in public testimony today. If you are not able to testify today, please submit your comments or suggestions in writing to the Budget and Fiscal Review Committee or visit our website. Your comments and suggestions are important to us and we want to include your testimony in the official hearing records. Thank you and we appreciate your participation. We have concluded the agenda for today's hearing and the Senate Budget Subcommittee one on Education is adjourned.
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