SDSU Budget Update

The final 2026–27 California state budget provides additional funding for the California State University. This investment offers important support for the CSU and San Diego State University, but much of the new funding is committed to specific systemwide obligations and priorities.

Following the CSU’s final budget allocations in July, SDSU revised its estimate of new ongoing funding from approximately $43 million to approximately $20 million. Despite this change, the university expects to fund nearly all of the ongoing, nondiscretionary priorities previously approved through SDSU’s budget process.

At a Glance

• California provided approximately $509.6 million in additional ongoing General Fund support to the CSU.
• The CSU expects to receive approximately $201 million in additional tuition revenue associated with enrollment growth and the Board of Trustees-approved tuition increase.
• Much of the new funding will support designated campus allocations, employee compensation and other systemwide priorities and obligations.
• SDSU’s estimated new ongoing funding has been revised from approximately $43 million to approximately $20 million.
• SDSU will continue with its planned $5 million reduction to the university’s ongoing base budget in 2026–27.
• Enrollment-related funding and collective bargaining outcomes remain uncertain.

California State Budget

The 2026–27 California Budget Act provides the CSU with approximately $509.6 million in additional ongoing General Fund support. This includes:

• $100.9 million for a portion of Year 4 of the Higher Education Compact
• $264.9 million for Year 5 of the Compact
• $143.8 million to restore the CSU funding reduction made in 2025–26

The state’s investment provides important support in the final year of the five-year Compact. California’s longer-term fiscal outlook remains uncertain, however, as state expenditures continue to grow faster than revenues.

For SDSU, this uncertainty reinforces the need for conservative projections and multiyear financial planning.

California State University (CSU) Budget

The CSU’s 2026–27 budget includes approximately $710.6 million in new state and tuition funding:

• About $509.6 million in additional state General Fund support
• About $201 million in tuition revenue associated with enrollment growth and the CSU Board of Trustees-approved tuition increase

The CSU plans to use this funding to meet essential commitments and invest in CSU Forward, the system’s strategic plan. About $183 million was identified for direct campus allocations, including:

• About $68 million for State University Grants
• About $58 million for enrollment growth
• About $57 million for mandatory costs such as employee benefits, utilities, insurance and operating costs for new facilities

Much of the remaining funding is being managed at the CSU system level for:

• Employee compensation
• CSU Forward initiatives
• Facilities and infrastructure debt service
• Repayment of a state General Fund loan
• Reserves intended to address state funding uncertainty

Although the CSU received a significant overall funding increase, the amount available to individual campuses for university-specific priorities remains limited.

What the Final Allocation Means for SDSU

In May, the President’s Budget Advisory Committee (PBAC) approved SDSU’s 2026–27 budget using the best information available at the time. This allowed the university to begin the fiscal year on July 1 with an approved spending plan.

The CSU’s final July allocation differed from SDSU’s planning assumptions in two significant ways:

• About $143.8 million in systemwide restoration funding was not distributed to campuses in the manner SDSU had anticipated.
• A substantial share of the new funding is being retained or allocated at the CSU system level.

As a result, the amount of new ongoing funding SDSU expects to receive has been revised from approximately $43 million to approximately $20 million.

Ongoing funding supports expenses that continue from year to year, including salaries, benefits, utilities and recurring university operations. This differs from one-time funding, which is available for a limited period and cannot responsibly support permanent expenses.

Ongoing SDSU Priorities

SDSU expects to fund nearly all of the ongoing, nondiscretionary priorities previously approved by PBAC. These include:

• $9 million for mandatory cost increases, including utilities, employee benefits and insurance
• $2.4 million for instructional and operating needs at SDSU Imperial Valley in Brawley
• $1.5 million in additional student financial aid
• $1.5 million for deferred maintenance, completing an $8 million campus funding commitment
• $700,000 for previously approved faculty tenure and promotion compensation

The primary change involves the $24.6 million compensation pool included in SDSU’s May budget plan. Funding for employee compensation is now being held at the CSU system level pending the outcomes of collective bargaining.

One-time Investments through PBAC 

PBAC also approved approximately $36.8 million in one-time investments. Major allocations include:

• $20.3 million for Academic Affairs to support enrollment and faculty start-up commitments
• $6.4 million for deferred maintenance and classroom improvements
• $4 million for scholarships
• $2.5 million for required enterprise technology and software conversion

These targeted investments address immediate needs and institutional commitments without adding the same level of permanent expense to SDSU’s ongoing budget.

SDSU’s Multiyear Budget Strategy

SDSU’s overall budget strategy will continue, and the university will proceed with the planned $5 million reduction to its ongoing base budget in 2026–27. Each division has received a reduction target and has flexibility to determine how best to meet it.

In 2024–25, SDSU identified an approximately $30 million cumulative budget gap to be addressed over three years. The university selected a multiyear strategy to provide time for thoughtful planning and to limit effects on the academic mission, employees and students.

Areas SDSU is Monitoring

Enrollment-related funding

The CSU allocated approximately $4 million in enrollment-growth funding to SDSU. The revised enrollment target associated with this funding was communicated to the university on June 18, late in the enrollment cycle. If SDSU does not fully achieve the revised target, the university could lose a portion of this funding.

Collective Bargaining

Collective bargaining agreements are negotiated at the CSU system level. The outcomes of current negotiations and their potential financial effects on SDSU are not yet known.

California’s Fiscal Outlook

While the state’s 2026–27 investment is welcome, future state funding remains uncertain. Rising operating costs and limited flexible funding will continue to require careful planning.

Looking ahead, SDSU will continue to:

• Protect the academic core and student success priorities
• Manage university resources carefully
• Make thoughtful long-term investments
• Plan conservatively for future uncertainty
• Keep students, faculty and staff informed as circumstances change

Additional budget information and PBAC materials are available on the PBAC and the University Budgets webpages