California State University, San Bernardino (CSUSB) is bracing for another year of financial strain as the campus projects an $18 million budget deficit for the 2025–26 fiscal year, continuing a trend of fiscal pressure caused by declining enrollment, rising operational costs, and reductions in state funding.
In an internal update to campus colleagues, CSUSB Vice President and Chief Financial Officer Dr. Samuel Sudhakar outlined the university’s current financial position and future planning efforts. The message comes in the wake of a difficult 2024–25 fiscal year, which faced a $20.4 million budget shortfall. That gap was addressed through sweeping cost-cutting measures across all divisions of the university.
“These abrupt shifts in our fiscal environment stemmed from unrealized tuition revenue, unfunded compensation adjustments, and escalating mandatory expenses such as utilities, insurance premiums, and healthcare rates,” Sudhakar wrote.
To address the 2024–25 shortfall, CSUSB implemented extensive mitigation efforts, including:
- A hiring freeze and elimination of several positions, including 14 Management Personnel Plan (MPP) roles
- Increased class sizes and cancellation of underenrolled sections
- Reductions in reassigned time for faculty and curtailed tenure-line hiring
- Downsizing of the contingent faculty workforce
- Cutbacks in campus services and state-funded travel
- Postponement of capital and maintenance projects
- Reductions in discretionary spending and new initiatives
Each division was required to contribute to the deficit in proportion to its share of the university’s total operating budget. These actions were discussed and reviewed by the University Budget Advisory Committee (UBAC), the body charged with ensuring fiscal transparency and shared governance. Looking ahead, the Governor’s January 2025 preliminary budget calls for a 7.95% base reduction to the CSU system’s funding—a cut of $375 million, of which CSUSB’s share is projected at $15 million. Combined with continued declines in student enrollment and tuition revenue, the university is facing an estimated $18 million deficit for the upcoming fiscal year, which begins July 1, 2025.
The outlook is further complicated by a deferral in state compact funding: the CSU’s anticipated $252 million allocation for FY 2025–26 will now be delayed until FY 2027–28.
“These are challenging times for higher education across the country, and CSUSB is no exception,” said Sudhakar. “Still, we remain committed to transparent communication and collaborative planning.”
Tracking the Numbers
According to CSUSB’s third quarter fiscal year report, which covers July 2024 through March 2025, the university has spent 85% of its budgeted salary and benefits funds and 31% of its OE&E (Operating Expenses and Equipment) funds. Overall expenditures have increased by 2% compared to the same period last year, largely driven by compensation and inflationary cost hikes.
The full third quarter report is available at: https://www.csusb.edu/budget/fiscal-information/fiscal-data CSUSB will monitor developments in the state’s budget process closely. The Governor’s May Budget Revision is expected on May 14, with the final budget anticipated in June. CSUSB will present its proposed FY 2025–26 budget to UBAC for discussion on May 28.
In the meantime, the university community is encouraged to review the CSUSB Financial Transparency Portal and reach out to the budget office with any questions: https://www.csusb.edu/budget/fiscal-information/financial-transparency
As CSUSB prepares for another lean fiscal year, the university’s leadership emphasized the importance of shared sacrifice, ongoing planning, and a unified commitment to academic excellence and student success.