The Finance and Capital Strategies Committee of the University of California convened on July 13, 2025, to discuss the implications of the recently signed state budget for the upcoming fiscal year. Governor Gavin Newsom's approval of bills SB 101 and AB 102 established a state budget exceeding $321 billion, with $4.9 billion allocated to the university, maintaining the same funding level as the previous year.

Despite the stable funding, the university faces ongoing financial challenges. The budget reflects a 3% reduction from the governor's initial proposal of an 8% cut, but it also defers an additional 3% of funding to July 2026. This deferral, while appreciated, highlights the university's precarious financial situation, especially given the state's multibillion-dollar deficit.

The committee noted that while the budget provides some restoration of previous cuts, including a $125 million reduction from last November's budget request, it lacks funding for critical capital projects related to enrollment growth and deferred maintenance. The university anticipates a potential shortfall of approximately $500 million in core funds, contingent on future state funding.

On a positive note, the state has committed to fully funding the Middle Class Scholarship Program and has made permanent $84 million in funding for the College Corps program, which supports student financial aid and service opportunities. The university plans to continue advocating for funding to meet its compact goals, which include improving graduation rates and reducing equity gaps.

Overall, while the budget provides a stable foundation, the university's financial outlook remains uncertain, with significant reliance on future state funding to address ongoing shortfalls and support its strategic initiatives.