CHICO — Chico State has a budget deficit of $32 million. But university administrators are looking at a method to get rid of that deficit.
Chico State’s University Budget Committee established a look into how the university plans to address its structural deficit Monday with the proposal posted on the Chico State website.
Chico State is dealing with a projected $32 million deficit for the 2025 to 2026 academic year, according to the initiative. The university says the deficit has been increased by proposed state funding cuts, the enrollment recalibration by the California State University system, and unplanned unfunded commitments in regards to compensation and benefits increases and increasing utility costs.
The projected $32 million deficit reflects over 10% of the budget committee’s annual operating budget and is composed of $8 million for the 2024/2025 ongoing base deficit, $12 million for the state 7.95% reduction, $4.4 million in the system enrollment reduction by 3%, $6.9 million for unfunded compensation increases, $3.9 million for unfunded benefit increases and $4.1 million for utilities/risk pool/financial aid increases, according to the university.
These impacts create a deficit that would be diminished by a projected $7 million tuition revenue increase, the initiative states.
The University Budget Committee recommended a plan to achieve budget reductions over the course of three academic years.
The committee presented its recommendation to President Steve Perez on March 14. The plan involves lowering allocations by $12.8 million in 2025-26 and in 2026-2027 and by $6.4 million in 2027 to 2028. This reflects a 40%-40%-20% allocation of the deficit over the 3-year period, with the recommendation to follow the percentages, no matter what the dollar amount.
“At this point in the budget cycle, we are making projections based on a number of factors, including the governor’s January budget proposal for the state’s allocation and the enrollment recalibration,” Perez said in a statement provided to this newspaper.
The school’s president also held a campus-wide forum Monday to discuss the budget.
“In the meantime, the University Budget Committee has submitted its recommendation: A three-year plan to eliminate the projected potential $32 million deficit,” Perez said. “The scenarios we are considering and the implications are difficult, and while we are grateful to have reserves to help us through this, we must be having conversations to ensure the University’s fiscal health in the immediate and long-term future. We continue to advocate at the state level to prevent the proposed state cuts, and work to grow our enrollment and increase retention by all means possible so that we can continue to best serve our students, each other and our region.”
