July 14, 2025 - Budget Update — Chico State Skip to Main Content
California State University, Chico

July 14, 2025 - Budget Update

Dear Campus Community, 

On June 27, Governor Gavin Newsom signed California’s 2025 State Budget. This final budget reflects a significant improvement over earlier proposals, and I want to thank all those who helped advocate for Chico State and the California State University. Our importance to the state and our region cannot be overstated; we all worked to share that importance with lawmakers, and we appreciate everyone’s effort and its impact. 

While the budget is better than the projections used in our spring budget modeling, it still presents meaningful challenges for the California State University system — and for us here at Chico State. 

Here’s what it means for the CSU and Chico State: 

  • As described in this message from the Chancellor’s Office, the state budget does not include any new ongoing funding for the CSU this year. 
  • The CSU’s base funding reduction was scaled back to 3% — or approximately $144 million—rather than the deeper cuts originally proposed. For Chico State, this equates to a reduction of approximately $4.6 million in base funds. 
  • Additionally, the $252 million in 2025–26 funding previously anticipated as part of the CSU’s multi-year compact with the Governor has been deferred. The state has signaled its intent to restore it incrementally through 2028–29. 

What does this mean for Chico State’s 2025–26 budget? 

As described in the spring 2025 budget call, we made several assumptions that now need to be updated based on new information, including a smaller reduction to the state allocation to the California State University, increased potential enrollment and retention growth for next year, and effective deficit reduction strategies in the 2024–25 year reducing the base deficit carried into 2025–26, among others. This is all good news.  We are waiting on further insights and action from the CSU, and once allocations are made later this fall, we will assess our budget within the framework of our University Budget Committee’s recommendations and take appropriate action. 

To be clear: while the cuts are less severe than anticipated, they are still real — and we must continue implementing budget reductions and efficiencies. These steps are essential to our long-term sustainability and our focus on student success. 

I want to take a moment to thank you. Again, your advocacy (and that of our alumni and supporters across the state) on behalf of Chico State and the CSU this spring was powerful and effective. It made a difference. Your continued focus on enrollment as Job One — through innovative, collaborative, and persistent recruitment and retention efforts — is also making an impact, not only in our student numbers but on their success. And I’m grateful for your understanding that this moment calls for flexibility, creativity, and a shared commitment to transformation. Thank you — our efforts are working as we see increasing enrollment, retention, and effective deficit reduction. To deliver on our mission and serve our region well, we must continue to adapt — and stay the course. We are not out of this yet. Our plan is a multi-year effort to increase enrollment and retention along with being mindful of and innovative with our expenses. 

As the Chancellor’s Office remains actively engaged with state leaders to clarify funding expectations and advocate for the resources needed to carry out our work, I will continue to share updates. In the meantime, please know: Chico State remains unwavering in our commitment to our students, our employees, our region, our mission, and our values. We will navigate this moment with care, honesty, and a shared focus on the future. 

For the latest updates and information, please visit our budget planning website. 

Thank you for all you do, 
Steve Perez