Assembly Standing Committee on Higher Education

Good morning. We like to call this Joint Assembly Committee on Higher Education and Budget sub 3 on education finance Meeting to Order welcome to this joint hearing on the future of the California State University Joint Oversight Hearing with Budget Subcommitee 3.

Whether you're here in person or watching virtually, thank you for your interest and participation on this very important topic. Please note that all materials for this hearing can be accessed online at. Gov Hearings Last month the California State University released their 2025 Economic Impact Report underscoring the CSU's far reaching contributions to nearly every aspect of California's economy.

From strengthening California's workforce to contributing billions in statewide industry activity, the CSU continues to deliver a tremendous economic impact to our state.

In that report, I was pleased to learn that the CSU serves as the producer of nearly half of California's bachelor degrees, providing the diverse, educated and skilled professionals with required to meet the workforce needs in the state's top in demand industries.

Specifically within the education, health services and professional businesses services sectors which together account for more than 1 million projected job openings by 2033. The CSU is producing over half of related bachelor degrees and CSU's engineering programs and construction programs also provide more than half of the state's General engineering graduates which supports infrastructure growth.

And just this past friday I was very fortunate to visit Cal Poly Pomona where I saw their number of the programs including engineering program.

In the 202324 academic year, CSU campuses conferred 29,000 degrees in health care representing 46% of such degrees awarded in our state and 23,000 degrees in business and professional services and 14,000 degrees in humanities and social services business, 56% of those degrees in the state.

And these are great stats for the csu, but as good as and as good as they are.

As chair of the semi Higher Education Committee, we know the viral rule that our Committee, working with budget sub 3 Committee and entire Legislature holds to ensuring that the future success of our students of the CSU and the entire CSU system.

And as noted, the CSU continues to face challenging issues from balancing campus budgets and to several of the campuses declining enrollment, many initiatives have launched with various goals from the consolidation of administrative functions, streamlining of the admissions processes, to the integration of two campuses into one. The CSU also launched a new strategic plan in September.

And with the future of higher education seemingly under attack, each and every day more and more of our students and families are reviewing whether or not the cost to earn a college degree is worth the investment. These are conversations we're going to continue to have with our Chair Alvarez and our Committee.

The CSU continues to play a critical role in providing a rigorous and affordable higher education option to our students. And today's hearing is intended to discuss these ongoing challenges and hearing of best practices and solutions to ensure the relevance of the CSU remains steadfast for countless subsequent generations.

And during this hearing, in addition to learning more about how the CSU is addressing ongoing critical issues, we look forward to hearing more about the innovation that CSU is developing the business industry leaders in order to for students to be prepared for 21st century careers and workforce development opportunities.

And thank you so much again to all the panelists that we're going to hear today. We have a really robust set of panels and with that I'm going to turn it over to our chair of the Budget Subcommitee on Education Finance, Budget Subcommitee 3, Chairman David Alvarez. David Alvarez, thank you.

Thank you Mr. Chair. So want to make sure we get captured here. Thank you to Chair Fong and thank you all for being here. I also want to start by thanking our Committee staff who helped organize our hearing for today. Really, really important that we acknowledge the work that was done coming into this Committee.

To both our Committee staff, thank you all for your support as stated. I'm David Alvarez, Chairman of the Assembly Budget Subcommitee Number three on Education Finance, and I want to welcome you all to this hearing today.

The hearing is focused on CSU and Chair Fong very well already spoke about the incredible work that the system does and how significant it is to the state of California.

Some of the facts that I'd like to share very, very briefly is that there are more than 400,000 students, currently more than 4 million alumni from the CSU system and 125,000 degrees per year are allocated. From the CSU system.

Importantly, something we talk about often is half of the graduates from CSU are transfer students from our community college system, which is so integral to entire higher education ecosystem. And significantly 94% of CSU students overall are Californians, people who we serve. However, we know that CSU faces numerous challenges and that's what we're here to discuss today.

This three of them specifically, which I will get into the details and we'll have the three specific panels. But. In my opinion this is the intent is that this will inform and guide our budget decisions for 2026.

It's not going to be an easy year as everybody already knows, and we're going to have to make some significant decisions. And this hearing today will guide us in how we make some of Those decisions. That's why it's so significant.

While many campuses in the system have strong demand and are hitting or exceedingly their enrollment growth numbers, that means that California students have our choices at our CSU system hitting those growth targets, as we call them.

I want to first focus our attention on what we would discuss, which will be both how the campuses are dealing with less enrollment, decline enrollment that's happening at many campuses, and how they can regain students and stabilize, but also how the states and the system will help campuses that want to grow and that can grow significantly.

There's room for growth and we need to learn how to address that. I'm concerned, for example, in my own backyard that San Diego State University received the numbers that I have are over 113,000 applicants for this fall for freshmen and transfer students, yet 70,000 students were rejected out of those.

SDSU clearly has incredible demand and could grow to enroll thousands more Californians and certainly thousands of more of the people who I serve in my community. At the same time, some campuses are seeing this high demand, others are not. And I'm concerned that these campuses may be overfunded, as we'll see in the data presented here today.

And some of that funding could help support growth in other areas where we could serve more students. I understand the need to support campuses that see dips in Enrollment, but as we know, we have multiple campuses that are well below their funded Enrollment and the targets that were set for them for the last several years.

So in our second goal for today and our second focus in our item, we will have a frank conversation about how to address this particular issue. I look forward to hearing about how creative ways how CSU is trying to attract more students at the declining enrollment campuses.

I know that some campuses are working more closely with high schools and community colleges integrating their work. And I hope that we can discuss how to bring CSU education in new ways to many more Californians that are seeking it. Our second goal in one of our panels is to is very budget focused.

It will be looking to hear about how the system is trying to address costs by consolidating operations or perhaps even what happens at campuses. CSU has a budget problem, and given the state's uncertain fiscal situation, I don't think the state will have enough funding to address this problem. We can no longer continue the status quo.

There will have to be changes. We will of course do everything we can in the next budget cycle to properly fund the CSU system, as I think no two other Members of the Legislature besides Chair Fong and myself did this year as we fought for funding for CSU system. We will do that again, but it's good.

But it's also good and important that CSU start to look internally at what the cost controls can be and what else can be done to make sure we achieve savings to serve the most, the greatest number of students.

And our third goal on the agenda, as laid out, is really an oversight on what has been done over the last few years. We want to talk about Humboldt and Sonoma campuses specifically as there were some very, very significant budget investments that were made in the last several years.

We want to know how the money is being used, how they are addressing their budget and enrollment issues at the same time. And as just as a reminder, over $480 million in one time funding to both campuses, almost half a billion dollars now to two campuses alone where we've continued to see lack of hitting enrollment targets.

And certainly the growth at these campuses is not there. So that's a lot of money that we've spent on two campuses. And I want to ensure that that is being spent wisely in achieving state goals and campus goals as well.

So those are the three items that we have before us in agenda, in our agenda as item 34 and five. Those are the three goals. I do not want to leave today's hearing without addressing these issues as again, it will inform our budgetary decisions from the Assembly during the next budget cycle beginning in January.

So with that, again, I want to thank you all, really appreciate you being here. And we'll move on to our first panel, which is Leader Perspectives. I can ask the panelists to please come forward. Unfortunately, Trustee McGrory could not join us, so he will not be a panelist today and we wish him well.

But we do have Dr. Elizabeth Boyd, Chair of the CSU Academic Senate. And. We'll have to have Katie Karum, Vice President, System Wide affairs at Cal State Student Association. Those are our two perspectives that we'll hear from today. And I want to thank you for making time to join us and appreciate hearing from you today.

Please go ahead.

Just so no one's confused. We're trying to ensure the microphones are all functioning so that this could all get captured as it's being. It's a public meeting being recorded and will be available for others. Give us a minute.

Thank you so much everyone for your patience. A sound engineer is on their way right now. Thank you.

Thank you so much ever for your patience. We're currently addressing the sound engineer here and so hopefully we'll have the sound momentarily. We're going to take a brief recess at this time. Thank you.

Test 1, 2. Test 1. Position 1. Test. Test 1, 2. Position 2. Test 1, 2. We're testing.

All right.

Seriously. No, you got it. We're just having a conversation. That's all it is. It's all it is. You're having a conversation. All conversations are.

Well, thank you so much again for your patience. We're going to reconvene our joint Committee meeting here in room 444. Thank you so much to our panelists and to everyone for your work and efforts to make this happen. But then I'm going to pass it back to Chair Alvarez, who's going to introduce the panel again.

Thank you so much.

Thank you again and appreciate all your patience. Yeah. We will begin with our first panel from perspectives from our leaders of our system.

As I mentioned previously, Jack McGrory is trustee, will not be on the panel today, but we have Dr. Boyd, Chair of the CSU system, and Katie Karroum, Vice President of the system Wide affairs for the California State Association. Thank you for your patience. And now we ask you to please begin.

Take two. All right. Good morning, Chair Alvarez, Chair Fong. I think it's still morning. Yeah. And Members of the Committee, and thank you to the Committee staff as Well. I am Dr. Elizabeth Boyd. My pronouns are she, her, they and them.

I am a faculty member, professor and entomologist who has served California for over 17 years from my home campus, Chico State in its College of Agriculture. I'm happy to sit here beside the representative of the CSSA, Katie Karoom.

And I've been officially involved as a faculty Senator in governance of the CSU since 2010 and currently serve as the Chair of the Academic Senate of the CSU. The ASCSU, the system level non bargaining co governing body representing nearly 29,000 faculty who serve nearly half a million students in the 22 campus California State University system.

I'm proud also to be sitting here as the first professor of Agriculture to serve as the Chair of the ASCSU. First, thank you for creating this space and opportunity to speak with you today about the future of the CSU and for elevating the importance of this system to our state and our nation.

The CSU is a student centered driver of upward mobility, regional vitality and economic resilience. My testimony today is offered in the context of the budget focused panels before you and I will share several key asks from a faculty perspective. First, a little bit of background.

Being a faculty member in higher education has never involved the amount of challenge and opportunity as it is today. As it does today, faculty are being asked to perform herculean feats, to teach in a way that provides for equity and maintains access faculty are the boots on the ground.

We assist when our students are having a mental crisis and there are not enough counselors to see them. We connect them with resources when they have no food or shelter. We see through to the talent and potential they have and believe in them before they have learned to believe in themselves.

We prepare them for the world and connect them to employment opportunities. We care deeply about their success and advise them as best we can in their journeys in and beyond the classroom. We create courses in various modalities to engage all learners. We work evenings and weekends to meet student needs.

We redesign curriculum to meet needs of industry and incorporate new material. We do all this while grappling with learning and then teaching new technologies such as artificial intelligence, having hard earned grants and contracts that provide valuable learning opportunities for our students be stripped away by the Federal Government and while being demonized for viewpoints informed by scholarly research.

Now more than ever, we feel the urgency of protecting academic freedom, shared governance, and our students right to learn. Budgets ultimately reflect strategic priorities and as the Higher Education Employer Employee Relations act remind us, faculty voice must be central in decisions around budgets and expenditures that directly impact curriculum and student learning.

To that end, I offer the following asks on behalf of the faculty that ASCSU represents. First, we ask the Legislature to protect academic freedom and legally enshrine the faculty role in CSU governance.

Unlike the UC, CSU faculty lack constitutional grounding for our academic and curricular authority and this leaves us in a precarious position and at a deficit with our segment partners. A constitutional amendment or legislation that goes beyond Hera's recognition would provide long term stability, protect academic quality, and clarify curricular authority across the state systems.

Second, we ask you to increase faculty representation and expertise at the Board of Trustees. Only one faculty trustee sits on the board and while faculty leaders attend meetings and are sometimes asked to present with members of the Chancellor's office, the faculty cannot contribute their expertise on decisions directly affecting curriculum, pedagogy and academic programs.

Meanwhile, well meaning system administrators who are several layers removed from students are regularly consulted. Those closest to students in the implementation must have a real voice at the table. Third, we ask for stable, ongoing state funding. One time allocations are deeply, deeply appreciated.

Campus leaders cannot responsibly use one time funds to hire the people who make the greatest difference for our students, faculty, advisors, counselors, librarians, tutors and staff. And at the same time, when inflation, rising housing costs and shrinking federal support are placing enormous strain on on our operating capacity, the CSU needs predictable funding.

The largest four year public university system in the country cannot operate sustainably on intermittent funding. Fourth, we asked Legislature to end unfunded mandates. When new laws reshape academic programs or impose new responsibilities, they must include funding without it. Such mandates shift costs onto already strained campus budgets, faculty workloads and the students themselves.

We also ask that lawmakers continue very good practices such as this to consult faculty early before bills are introduced to ensure feasibility and alignment with educational needs. Fifth, we ask for continued and expanded support for student food and housing security. These are not ancillary concerns, they are foundations for student success.

As faculty, we are often the first to learn that a student is sleeping in their car or struggling to afford meals. Students cannot learn if they are hungry or unhoused. Sixth, we ask for funding that enables campuses to offer flexible high demand course schedules, evenings, weekends, hybrid and online, especially for returning adult learners.

Faculty stand ready to teach in these modalities, but sufficient ongoing funding is needed to hire and schedule appropriately. At the same time, online education is not appropriate for all disciplines and not preferred by all students. Nursing, physical therapy, agriculture and lab based sciences require in person instruction.

Students emerging from K12 often need structured face to face environments, while mid career students may need hybrid flexibility. The CSU must be resourced to support multiple pathways, not forced into a one size fits all model. Seventh, we ask for targeted funding to strengthen our transfer pathway programs like assistance the statewide course articulation database.

It's vastly under resourced and is essential to our transfer students. We also need additional support in modernizing our articulation systems, reducing the reliance on manual transcript processing which would dramatically improve our transfer efficiencies. Eighth, as more bachelor's programs are authorized in the community colleges, we ask for strong accountability measures.

CSU faculty understands the state's support of the community college bachelor degrees in fields this CSU does not offer. But disagreements persist over duplication in areas where the CSU has a long record of successfully training students in high demand fields.

We ask the community college program success rates be evaluated as carefully as the CSU outcomes, ensuring efficient use of state dollars, coordination across segments and ultimately to the success of our students. Ninth, we ask the state avoid promoting and over centralizing academic programs or assuming online delivery can replace regional campuses.

CSU students often must stay local due to economic pressures, mental health needs and family obligations. Rural areas face deep infrastructure gaps including broadband. Thus CSU must remain a system of regional access, not merely centralized or virtual access. My second to the last tenth we may ask the Legislature.

We ask the Legislature to continue strengthening protections against immigration enforcement activity. SBA98 was a strong step forward. We want every campus to remain a safe harbor for undocumented and mixed status students and families. Students living in fear are not students who are able to fully engage and learn.

And last 11th, we ask for your support in fostering equitable and coordinated collaboration among California's higher education segments. Analyses like those from the Civil Rights Project highlight the need for shared strategy and aligned mission. Faculty in the CSU are eager to collaborate with the UC, the community colleges and the independent institutions to advance student success statewide.

We need you to continue empowering faculty bodies like the Intersegmental Committee of Academic Senates in order to do so. Chair Fong, Chair Alvarez and Members, thank you for the opportunity to present these recommendations on behalf of csu.

The CSU remains one of California's greatest assets and with your partnership and sustained investment we can continue to provide the high quality, life changing education that our students in our state deserve and I look forward to your questions.

Thank you, thank you and once again thanks for your testimony. Appreciate you being here. Please proceed.

Thank you. Nice Good morning Chair Fong, Chair Alvarez and Members of the Committee, thank you for the opportunity to speak today.

My name is Katie Karroum and I serve as the Vice President of System Wide Affairs with the California State Student Association, representing nearly half a million CSU students across the state and I'm a student at CSU Northridge.

Today I want to speak plainly about what the future of the CSU looks like for students because students are the first to feel the consequences of budget decisions, enrollment shifts and system wide restructuring. There has been a lot of debate about what's happening with CSU enrollment. We've heard that a majority of universities saw enrollment increase this year.

However, universities are still reporting budget shortfalls tied to low enrollment. These two truths exist because enrollment numbers may have increased over the last couple of years but still remain lower than pre pandemic levels. While some universities continue to operate with the expectation that enrollment would rebound to pre pandemic numbers, they simply haven't.

Instead of making necessary corrections at the time, many universities continue to operate in the red, creating severe budget challenges that they have recently begun addressing. This disconnect between expectations and reality is now shaping difficult decisions about the system's future and most importantly, the future of our CSU students. From the student perspective, three things are clear.

Firstly, how the CSU funds enrollment directly impacts student experiences. The current enrollment funding model does not reflect campus reality. Universities with high enrollment, such as San Diego, Long Beach and Fullerton Continue turning thousands of students away every year. Meanwhile, our system continues to promote itself as the most affordable and accessible public university system in the nation.

Simultaneously, lower enrolled universities are forced to cut programs or reduce support to manage budget gaps. This is not a student centered balance. Students are shouldering the consequences of a resource mismatch. The cut of programs that aid in student success directly affects their livelihood and time to graduation.

Secondly, balancing high demand and declining enrollment universities requires transparency and intentionality. Students know that there is not one unanimous solution. However, students are open to new approaches such as regional enrollment strategies, shared programs or services and cross campus online offerings. As these solutions are hopefully explored and discussed, our students want transparency and student involvement in these decisions.

It is not enough to give a student a seat at the table in these discussions. Meaningful engagement and their input truly being taken into account is what we look for. Students are not simply a checkbox to fill that meets the shared governance requirements. Students do not want a system where demand is high but opportunity is rationed.

We want to live up to being the public university system that is the most affordable and accessible in the nation. And finally, increasing enrollment requires actual investment in our CSU campuses and our students, not just messaging.

If the CSU wants to expand enrollment, it must restore program capacity, ensure enough core sections exist, and improve recruitment of historically marginalized students, make the CSU affordable again, and rebuild trust in communities that have felt disinvested for years. Currently, the CSU is trying to grow enrollment while simultaneously reducing services, increasing tuition and increasing Executive compensation.

That equation does not morally add up, nor does it work for our students. While enrollment growth rightfully remains a high priority for the state and the CSU, we also have a moral obligation to ensure students have the adequate resources they need to be successful once they become California State University students.

We understand the CSU is exploring system wide cost reductions such as merging operations, consolidating administrative functions and other restructuring ideas. We want to make one thing clear. Students are not opposed to efficiency. We're opposed to cuts that harm the educational experience of our students.

If the CSU can centralize procurement, HR systems, IT operations or other administrative functions to save money without harming students, we support that.

But we are seeing at some universities are cuts to advising, mental health, tutoring, library hours and student services, the exact areas students rely on to graduate on time, right now, students feel these decisions are made to us, not with us.

For example, student leaders from across the system have shared that these budget cuts are occurring rapidly, often without student consultation and with little to no timely notice. Cost Savings cannot come at the expense of the student experience. We appreciate the Legislature's targeted investment in universities like Humboldt and Sonoma and the recent allocation of $5 million system wide.

Students want to ensure these funds are used to support academic programs, stabilize enrollment, expand student support, and improve time to degree. Our students expect the Chancellor's office to clearly communicate the criteria for distributing these funds and the expected outcomes.

If the CSU is receiving additional state investment, students should be able to see and feel the benefits in their classrooms and campus experience. I want to end with the student truth. Students are already struggling.

We're working more hours, paying higher tuition, facing fewer course options, waiting longer for advising appointments, and experiencing more basic needs and securities than ever before.

While enrollment growth rightfully remains a high priority for the state and the CSU, the system also has a moral obligation to ensure students have the adequate resources they need to be successful once they become students.

When universities are forced to cut sections or close programs because of budget shortfalls, students carry the burden through extended time to degree, which means additional tuition, more debt, and delayed entry into California's workforce. I also want to emphasize something fundamental.

The future of the CSU depends on the state of California making a real sustained investment in this system. When state funding falls short, students feel the consequences immediately. Core sections are cut, departments shrink, advising and services are stretched thin, time to degree lengthens and tuition increases become the fallback plan.

The CSU cannot cut its way into a stronger future. Students cannot pay our way out of structural budget problems, and we should not shoulder this financial burden. Enrollment cannot grow when the system is less affordable and less accessible every year.

The Legislature, especially many in this room, has been a consistent and critical partner in supporting the csu and students deeply appreciate that commitment. But to prevent ongoing structural deficits, rebuild core capacity, and keep tuition from rising year after year, the CSU needs reliable ongoing funding at the state level, not one time fixes or temporary solutions.

CSU students support a vision for the CSU that is transparent, accountable, student centered, and fully funded by the state, not by increasing tuition and reducing opportunities. California's workforce depends on the CSU. California's communities depend on the CSU and our students deserve a CSU that fulfills its mission not just in name, but in actual practice.

Thank you for your time and I'm happy to answer any questions.

Thank you. Thank you both. I just want to take the moment just to. We had one last presentation presenter on this panel, so we went a little bit longer than the allocated time. We do want to have questions during the panel time.

So I'd ask everybody who's coming next to make sure we stick to the time a lot, especially since we lost about half an hour, unfortunately. But we will try to move things along and definitely not rush the hearing. I think we'll have plenty of time to have a lot of discussion.

But I just want to remind us all thank you both for your. Your presentations. Appreciate it. I think I certainly take away and the reason we had you come first is because I always want to be sad.

Centered in what we're trying to do. We're trying to serve students and we want to make sure that those who serve our students more directly, that their voices are part of this conversation. So that is why we have both of you here and really appreciate two different perspectives that I've heard that I've come to appreciate.

I will say as a legislator from a very urban area, and I've learned more about California, particularly in this role, is we cannot, and I want to say this at the very beginning because there will be some questions that may be difficult for a lot of folks from a lot of campuses which may be in non urban areas.

And this is not intended to be that kind of conversation. So I want to say that now, as the President of the Academic Senate mentioned to us, we need to reach students all over California. We cannot stop serving people who live in different parts of California.

That already happens, I think too much in too many ways in the state and the CSU system should not be contributing to those inequities that may exist throughout the state. So this is not a conversation about, about that. It is a conversation, as was stated, about serving more students in better ways.

And so I want to thank you for reminding us that we got to serve people everywhere in California, not just where we think it's important to do so because of numbers, if you will. But, but at the end of the day, there is funding that is allocated and as was mentioned by student association, students have, have.

Have expectations to be served with the needs that they have and that they, when they enroll at a campus, that they actually have access to the courses as was stated in the sections that get stated.

And so I would just state, and I don't have specific questions, I just want to acknowledge your comments, but I would state that reminded me that partially why this hearing is here before us today is because there have been some campuses with increased funding, but not the number of students.

And so to, to hear the concern that there's less sections and that perhaps resources are not being directed to serve students, that is certainly a concern that I want to let you know, I hear loud and clear and that I hope we get into the sort of specifics of that in the next three panels.

But again, thank you both for being here. Turn it over to Chair Fong.

Thank you so much, Chair Alvarez, and thank you so much to both of you for your tremendous presentations here today. Really appreciate the insights and the feedback and information regarding respective segments and thank you for your leadership and efforts there. And also similar to our Uplift.

Our vice President, Katy, as well, and the work and efforts to make sure that students are being heard and part of the solutions process and as well as our faculty leadership as well.

And in terms of the student perspective, when we mentioned the shared connections, the shared experiences and the work around basic needs and the shared consultation, we know that it's a faculty, if it's staff, if it's students, all of that is very critical feedback in the shared consultation process.

So I just really want to make sure that we continue to uplift that and going forward to make sure that the student voices are being centered in this process with faculty as well. So. Should we do questions? Just a quick question for our student panelists. Really wanted to just uplift your comments there.

So what are some other things that do you believe that the CSU system can do to make sure that students are being heard and part of the solutions process?

I think I had mentioned it. I mentioned it in my testimony. I think getting students involved in what cuts are happening on the campus level, I think is super critical. Students are usually finding out through their faculty members or through a cold email, you know, finding out that their sections have been cut.

That, you know, like, particularly in the humanities, is what I've seen in the social sciences that those departments are getting. Those departments are cutting core sections more often, as I've seen across a lot of campuses. But, yeah, students are finding out through proper modalities.

Even our students that are working directly with administrators through associated students, they're not finding out directly through administrators either, which is a concern because those students are elected to work directly with administrators, to, you know, serve as a liaison between the students and the Administration.

So it's concerning that they're also not hearing the transparency aspect of where the cuts are coming from. And also it really is just ensuring that the last things that are cut are the things that do ensure that students are graduating on time, like basic needs, advising, tutoring. Hours to all of these services.

As we do want to make the CSU and continue to have it be accessible. I think transparency around all of that stuff is super key and I think maybe even like the creation of more committees that involve students. And this decision making is really critical.

Absolutely. Thank you so much for those comments and to Chair Boyd as well. Thank you for your leadership and efforts with the Senate and really uplifting the work around basic needs and also looking at flexible scheduling, hybrid schedules, and really trying to meet the students where they are. So really appreciate those comments.

And then as well, anything that Chair Alvarez and I can do to continue to protect our immigrant students. It's been a big priority of of ours and the Legislature and so especially in these very challenging times. So really appreciate all your comments here today. With that, we're going to proceed to our next panel.

So thank you so much.

Thank you both.

Thank you. Thank you again to our panelists from the first panel. We're going to jump into the next panel on enrollment. Thank you again, Dr. Boyd and Katie. Vice President Katie, for your leadership and efforts. Our next panel as they come up, welcome and thank you so much again for your patience.

We'd like to welcome Dr. Dilcie Perez, Deputy Vice Chancellor of Strategic Enrollment Management and Student Success and Chief Student Service Student Affairs Officer for the CSU Chancellor's office. A warm welcome to Dr. Isaac Brundage, Vice President for Student affairs at Chico State University.

Welcome to Dr. Stefan Hyman, Associate Vice President for Enrollment Management at San Diego State University, and Patrick Day, Vice President for Student Affairs Enrollment Management at Cal State University, Los Angeles. Thank you so much. And you will each have five minutes for your presentations. Welcome, Dr. Perez. Please begin when you're ready.

Thank you so much and good morning, Chair Alvarez and Chair Fong and Members of the Subcommitee, thank you for the opportunity to speak with you today about the future of the California State University. My name, as you said, is Dilcie Perez and I'm the Deputy Vice Chancellor of Strategic Enrollment Management and Student Success.

As you know, the CSU has reached a pivotal moment that has brought tremendous excitement and vision for our system. At our September Board of Trustees meeting, we launched CSU Forward, our new strategic plan that reaffirms our mission and focus to expand opportunity, advance equity and strengthen California's economic and civic well being.

Anchored in the strategic plan is our North Star, the Student Success Framework which boldly reimagines student success by expanding efforts on enrollment to completion and career readiness and equipping each and every student for future success.

Guided by these commitments, we are in the process of finalizing the system's first ever system wide Strategic Enrollment Management plan and framework which expands access, aligns our academic programs with California's workforce needs and modernizes internal systems that support student success. Our enrollment strategy is increasing access where demand is strong and strengthening pipelines where demographic patterns are shifting.

We are also expanding our definition of a student beyond the traditional terms of first year and transfer students to include adult learners. In a myriad of ways. Our system wide coordinated approach continues to generate results.

This fall, our universities increased resident enrollment for full time equivalent students or FTEs, which is the term for the formula that the state and Chancellor's office use to measure enrollment. Overall headcount has risen to more than 471,000 students in each academic year.

Following the multi year compact with Governor Newsom, we have achieved our annual planned enrollment for FTEs and we are on track to exceed compact expectations for 25-26. We expect to enroll 392,500 California resident FTEs this year, exceeding our current funded target.

It is encouraging to note that system wide resident enrollment grew by more than 3% in 24-25 and we project another 2.9% increase in 25-26. As of December 1, which is typically our priority enrollment deadline, The CSU saw 833,375 applications in total, with 269,000 unique undergraduate applicants and 73,862 unique transfer applicants.

It should be noted that most campuses have extended their application deadlines to various points through May and we look forward to seeing more students apply and enroll for the fall 26 term. These games come as a result of our purposeful, proactive outreach and enrollment work to make the CSU an accessible reality for more California students.

Partnerships with K12 schools and community colleges expand our reach, ensuring we are capturing students at multiple stages in life and from every corner of the state. A strong example of this work is our Direct Admissions pilot with the Riverside County Office of Education where we offer qualifying high school seniors conditional admission to 10 CSU campuses.

The initial data indicates that the outcomes were substantial. The CSU saw a 9% increase in enrollment from the students in the Riverside school districts. With this success, Direct Admissions is expanding to 16 CSU campuses and SB640 will help scale this work statewide. We also recognize the demographic shifts ahead.

California will see fewer high school graduates and continued regional population changes.

We are preparing for these realities by strengthening recruitment, academic preparation and readiness pipelines, expanding programs in high demand fields, aligning offerings with regional workforce needs, investing where enrollment capacity will best serve the state, strengthening our yield efforts and of course, working with campuses that have had unique regional challenges.

We understand that CSU's work to is central to California's future. A recent economic impact report shows that CSU related spending generates tens of billions in economic activity and supports hundreds of thousands of jobs. More importantly, our graduates power California's workforce in critical fields such as health care, teaching, engineering, business and agriculture.

As we heard from Chair earlier today, we know that with more Californians or CSU degrees, the stronger and more resilient our state's economy will be across the CSU. The momentum is palpable, Enrollment is rising, demand is strong, and our system strategies are delivering results.

We are cautiously optimistic about the encouraging trends we are seeing, and these trends reflect our ongoing investments, collaboration and responsiveness to our students and the state's needs. We take nothing for granted. Our work is guided by CSU forward and we understand the importance of being bold, nimble and accountable. Sustaining this progress will require continued partnership and investment.

California needs a larger, more diverse and highly educated workforce, and the CSU remains the state's most powerful engine for meeting that need. In a moment, you will hear from a number of our campuses. Their histories, their students and their enrollment patterns all reflect the diversity of our state.

Along with the residual impact of COVID, some universities have also faced natural disasters and demographic changes that have impacted enrollment. Others have had to manage enrollment based on available funding, more than half of which comes from the state.

At the Chancellor's office, our responsibility is to maintain a system wide focus by supporting all the campuses to the fullest.

This work is deeply meaningful and we are excited to continue this critical work under the leadership of our chancellor, our campus presidents, and in alignment with our new strategic plan and of course, with the support of the State Legislature. Thank you for your partnership. We are happy to hear your comments and address your questions.

Thank you so much. Welcome.

Excuse me. Thank you both Chair Fong and Chair Alvarez for this opportunity. Good afternoon, I am Dr. Isaac Brundage, Vice President of Student Affairs at Chico State. At Chico State, we live by the motto today decides tomorrow. Each class connection and experience allows our students to build the lives they want and envision new possibilities.

We pair this philosophy with the understanding that enrollment is our highest institutional priority. Introduced in 2022, this campus wide charge that enrollment is job one reflects our responsibility to recruit and retain students to to secure our long term fiscal stability and expand access to high quality, affordable education.

It also reinforces our obligation to prepare graduates who strengthen California's workforce and communities. Our enrollment peaked in 2017. We served more than 17,400 students. The years that followed brought challenges including the Camp Fire, the COVID pandemic and shifting demographics. Enrollment reached its lowest point in the 2022 academic year.

Through coordinated and intentional action, we are proud to have reversed that trend. Since fall 2023, we have achieved seven consecutive semesters of year over year enrollment growth. Our recent gains reflect several focus strategies. We have reduced admissions barriers by simplifying application requirements, improving communication and streamlining undergraduate processes for transfer. Students. We began application review earlier.

Move to self reported transcripts and expanded consideration to lower division applicants. We strengthened our marketing efforts by investing in strategic outreach to to prospective students, families and adult learners. Through enhanced technology, we personalize communication, monitor trends and guide recruitment with real time data.

We also redesign major yield events to create warm, engaging experiences for students and their families. To support transfer pathways, we established MOUs with all seven community colleges and in our region, expanded our presence on their campuses and increased joint outreach. At Butte College, for example, we have an admissions counselor on their campus.

We are collaborating on marketing and working on degree pathways in healthcare and other high need majors for our region. We have also launched guaranteed admissions for students in our service area as well as outreach to local high schools to help build a college going culture for historically underserved students.

In this fall we completed our three year Strategic Enrollment Plan which aligns our recruitment, retention, student success and operational goals. This plan provides a coordinated framework to sustain momentum and improve the experience of every student we serve. That said, recruitment is only half the picture.

Retention is our moral imperative and aligns us directly with the CSU New Student Success Framework. Our efforts include providing integrated personalized care through new advising tools, basic needs, referrals and mental health support.

We have also expanded equity driven teaching and advising, open student success centers in every college, strengthened career services and and expanded affinity spaces and counseling services to better support all students. I'm proud to share that for fall 2025, FTEs reached 3,821 students up 2.3%. Year over year, we continue to outpace CSU.

Wide enrollment growth and average unit load has increased, demonstrating that students are accessing the classes they need and progressing toward their degrees. Enrollment may be job one, but our students are not numbers. Each one has a story and a unique goal.

At Chico State we meet them where they are and support them on the path toward who they want to become. Tomorrow calls and we are honored to help them define at Chico State. While we have made progress in growing our enrollment, I can assure you that we will not be slowing down our efforts as we go forward.

Our continued support of the CSU will be critical to our success. Thank you and I appreciate any questions.

Thank you so much. Welcome.

Thank you Chairs. We appreciate very much this opportunity to present and I particularly appreciate the opportunity to talk about Cal State LA. Good Morning. My name is Patrick Day and I serve as the Vice President for Student affairs and Enrollment Management at California State University, Los Angeles.

Cal State LA has a proud history of serving the city of Los Angeles and beyond, with a particularly deep legacy of serving East Los Angeles and the San Gabriel Valley.

Enrolling one of the highest percentages of Latinx students of any public university in the United States, Cal State LA has been designated by the Federal Government both a Hispanic serving institution as well as an Asian American Native American Pacific Islander serving institution.

The university also has a student population that is 74% Pell Grant eligible, the highest in the California State University System.

Put simply, we are proud to reflect the great diversity of Los Angeles and to have been named number one in the state by the College Futures foundation earlier this year for the social mobility of our graduates as part of a new Administration that began at the University less than two years ago, I have found that Cal State LA has faced both similar and distinct challenges across peer institutions within the CSU California and across the United States.

I've been asked to share with you an overview of our enrollment dynamics and how we are working to consistently improve the access and success of our students. Enrollment at Cal State LA grew steadily over many years, reaching a record number in 2018. However, the pace of our growth surpassed our state funded enrollment targets.

That growth required us to manage our admissions and enrollment differently, and in 2019 the former Cal State LA leadership decided to declare impaction, a technical lever within the CSU used to bring enrollment in line with state funding. Under impaction, eligibility and admission requirements were modified to manage enrollment while we continue to give priority to local students.

I must underscore this point. Lowering enrollment was a direct response to having more students than we had state funding and subsequent institutional infrastructure to support. The change was a challenge for many of our stakeholders and unfortunately this was shortly followed by the COVID19 pandemic. While enrollment gradually declined, moving into alignment with our funded target.

This began a trend that continued into the current year. We formally ended our institutional impaction status for the 25-26 academic year. Enrollment is now 18,390 FTEs, or in total headcount, 21,700 students, which is within 5% of our state funded target.

Across the university, from leadership to faculty to academic advisors to admission counselors, we are working diligently and with purpose to increase enrollment to ensure that we serve our students and our region at even greater levels.

We intensified our recruitment efforts across greater Los Angeles and Southern California, expanding outreach into Riverside county and growing high school applications by 56% from that region alone.

We increased admission into our Educational Opportunity Program more than previous years, expanded partnerships with local nonprofits focused on increasing access to higher education, and have launched LA Next A New initiative New initiative to deepen our relationships with community colleges and facilitate an easier transfer process to Cal State LA.

We are encouraged the new undergraduate enrollment for fall 2025 is is higher overall than the prior year, including a 4.4% increase in first time frosh students.

Although we saw a small decrease in transfer students this year compared to 2024, the drop is significantly different than the prior year, an encouraging sign that the gap is narrowing and we are becoming a destination for more transfer transfer students.

We anticipate that rebounding rebounding community college enrollment and the CSU's transfer success pathway program, of which we are number four across the entire system, will lead to a greater number of transfer students in the coming years. In addition to bringing in new students, we are focusing on improving student persistence persistence rates.

As part of these efforts, we are prioritizing continuing to Fund academic advising as we know that accurate, timely information is vital to student success.

We are investing in growing and streamlining academic support services like our Math Gym program focused on developing math achievement through supplemental instruction and peer tutoring and co locating with other with other tutoring and mentoring programs so that students have a one stop shop for support. Additionally, we are identifying new opportunities to support students.

For example, we are exploring ways to build on the success of our early start summer programs by using similar cohort strategies strategies during the academic year such as mentoring and block scheduling.

We expect that the comprehensive, strategic academic and enrollment planning processes currently underway at both the system and campus level will align future execution around enrollment trends happening in California and on our campus. This collaborative work will help inform a variety of successful strategies going forward.

We want to we plan on increasing enrollment and supporting the academic and co curricular success of our students at even higher levels. We do appreciate the opportunity to share with you the Cal State LA experience and look forward to answering questions. Thanks so much.

Thank you so much. Welcome.

Good afternoon Chairs, Members and Staff of the Committee My name is Stefan Hyman and I serve as the Associate Vice President for Enrollment Management at San Diego State University, one of the 22 campuses of the California State University System.

It's an honor to join you today to discuss the future of this remarkable institution that continues to drive California's economic progress. At San Diego State University, we've seen firsthand the transformative power of higher education.

SDSU continues to excel with graduation rates closing in on 80%, expanding access for historically underrepresented students and and deepening our impact through cutting edge research, community engagement and innovation and as a Carnegie Research one university with one of the lowest tuition costs of any other R1 university in the nation.

This fall semester, SDSU reached record enrollment for the third year in a row, surpassing 41,000 students on our San Diego and Imperial Valley campuses. While serving approximately 3,000 more students through our global campus. Total enrollment at SDSU has increased by 17%, or 6,200 students, in just five years.

SDSU has now surpassed half a million living alumni, with approximately 60% of our graduates remaining in the San Diego region after graduation. Demand for an SDSU education has never been higher. For fall 2025, we received more than 123,000 individual applications for admission.

Our success in continuing to garner record demand is a reflection of what's possible when public investment meets a clear mission to educate, uplift and empower the next generation of Californians. SDSU brand on this front is clear.

But to continue on this remarkable path of excellence and to enroll more students, we need your support to ensure that SSDSU and the CSU system as a whole can thrive. We require stable, excellent, equitable funding that keeps education affordable, supports our faculty and staff, and allows us to meet the needs of California's evolving workforce.

The future of the CSU and our state's prosperity depends on our collective commitment to maintaining access, quality and innovation. Thank you for your continued partnership and for recognizing the essential role that the CSU system and San Diego State University play in shaping California's future. I look forward to our discussion today.

Thank you so much to each and every one of you for your presentations with Dr. Perez, Dr. Brundage, Dr. Hyman, and Vice President Tay. Thank you for your leadership and efforts. I have a couple questions and then I'll pass it over to Chair Alvarez.

We know that the Budget act this year directed our California State University campuses to have declining enrollment, to develop turnaround plans, and to submit them to the chancellor's office by December 31, 2025. And the chancellor is required to consolidate and deliver those plans to the Legislature.

As part of the turnaround plans, campuses are required to consult with the community and campus stakeholders, and I'm glad to hear the number that were highlighted in the presentations here as well.

But I also recently learned that our CSUEU that they have not been engaged or consulted on the development plans right in any of their chapters as far as they are aware, which is a bit concerning.

If you can, please provide a status on the turnaround plans and any updates on stakeholder engagement with students represented employees and community partners. So I see someone coming. Yes, please. Mr. Lenz, welcome. Thank you. Good to see you again, Mr. Chairman. Good to see you, Assemblyman Alvarez.

Okay.

So yes, the Legislature did put in some budget Bill Language looking at those fiscally challenged and low enrollment campuses for purposes of providing those plans.

I became the interim chief financial officer and Executive vice chancellor on July 1, and once the budget was enacted, made a determination that it wasn't just the low enrollment or fiscally challenged campuses where we have issues.

We had issues at other campuses that weren't associated with their enrollment or their fiscal condition, but may have been in other areas. So I made a request and the chancellor approved an opportunity to take a look at all CSU campuses relative to their fiscal health.

And we established a fiscal health monitoring where we asked those campuses and we identified ahead of time those various issues that we want, that we had concerns about that we wanted to discuss with them. We've been through 21 of the 22 campuses for purposes of reviewing those, we have commented back on them.

There's probably about a third of the campuses where we really didn't see any issues where we needed immediate follow up, a little more than a third where we've asked them to come back in the spring as part of that development, do that type of consultation that you just referred to.

And then fewer than a third where we had some more immediate concerns, we asked them to come back within about 30 days for purposes of being a little more responsive to what had been submitted. But there is going to be a process in place that once they have identified.

And we've agreed on the issues and how they may proceed, that they would engage in that consultation process at their campuses as part of their budget deliberations.

Thank you so much, Mr. Lenz, for that context. And I think it's critically important. I'm glad you highlighted, but to make sure that all stakeholder groups are, including representative groups are being consulted in the process. And good to hear that. Within 30 days, third in spring, and others that are being consulted in the process now.

So we look forward to receiving those reports. So thank you. You're welcome, Mr. Chairman. Appreciate that.

And then I heard in a number of the presentations here as well, the partnerships with community colleges, the engagement with community organizations, and that's something that we want to make sure that our California State University campuses are 23 across our state, but that they're really being engaged with our communities.

And so this is sort of a question for any of the panelists, but what are some of the recruitment strategies that are being used for local area high school students to Be aware that there's a CSU in our backyard, that there's a partner there. And thank you for your presentation from Chico as well.

This mentioned, you have partnership with seven community colleges. As a former community college trustee, it's important to have those partnerships and those articulation agreements as well to really make sure that folks know that all our campuses are open, inclusive and accessible. So to any of the panelists, this is.

Would like to provide any updates on recruitment measures for local area high school students.

I can talk about Chico State. One of the things that we have is Wildcat Guarantee. And we're focused in the northern part of the state, our region, and we reach out.

We start with students in 9th grade and reaching out to them and connecting them to Chico State and what we do and sending information to them and their families and so that we become a brand known to them and. And we continue that through their senior year. We're just starting with.

I think we're in our second year of doing that now. So really seeing the results of people knowing about us and being more visible in those areas.

That's great. And thank you, sir. At Cal State LA, one of the things that has become critical in the time this new Administration has been there is to make sure that we are creating very real, robust partnerships with nonprofits. As I spoke about, those nonprofits are helping students get into school.

And what we found is that we had. There's some distance between us and those organizations, and we had to close that distance. So we're spending more time bringing those nonprofits and subsequently bringing hundreds of students to campus early on.

But that's combined with efforts that have continued to go on, including our MESA work, where we have our engineering and our faculty in our engineering technology space, working with local high schools, as well as our Verizon Summer program, our Upward Bound program.

The key is that we are bringing students from Los Angeles, the surrounding communities, Pasadena and others to campus early.

And so now we are building on that and looking forward to seeing the results of ensuring that they know, first of all, familiar with Cal State la, but also see it as a place to come and pursue their education. Thank you.

If I can just add, just focusing on our community college partnerships, we have a couple of more innovative models that we've been working on the last couple of years. One is with the San Diego Community College District that was just recently announced over the summer, where we're guaranteeing admission for students who are graduating from SDCCD campuses.

And we're Also working in tandem on placing a new academic building on the Mission Valley campus, which was located just 10 minutes or so away from our main campus, which would have co taught instruction a little over a year ago.

I believe the state body solicited the transfer audit looking at different types of challenges that project prospective transfer students faced in migrating to a four year university.

And I think the big finding of that was that first, only one in five students who indicated that they had plans to transfer actually did wind up transferring during the years of the audit.

But of the four of the five who didn't, the majority, 96% of them never applied for admission and most of them never got to the point of actually being eligible for admission because they had not earned enough units to be eligible as an upper division transfer student.

And so what we've been focusing on with our community college partners is how do we work together to make that we're keeping students on track through the community college in order to ensure that they're going to be successful and transfer ready at that point.

Some of our transfer guarantee programs are really intended to create that very, very clear roadmap to know that if they follow the steps that we're outlining, they will have a place at sdsu.

A second program that we have just recently signed an MOU on is with Southwestern College in the Chula Vista area where we're going to begin teaching upper division psychology courses on the Southwestern College campus in a new university cent alongside other four year universities so that students living in the Chula Vista area do not have to travel all the way up to San Diego, which mileage wise isn't that bad.

But if you're sitting in traffic on the 805 can be a real nightmare and really help out those students who have families who have jobs, who can't handle that type of a long commute, but still enable them to complete a degree.

Thank you so much all of you for that context. We know that community engagement is super critical and when we look at turnaround plans for enrollment issues, but to make sure that our campuses are open, accessible. And thank you to all of you for highlighting those different partnerships. And my district's right next to Cal State la.

And so really the work and efforts have seen the President around a lot of different events in the community. So I appreciate President Johnson and her leadership out there and to all the CSU campuses for everything to do continue to build partnerships and anything we can do to continue to uplift those is critical.

So I'll pass it over to Our Chair Budget sub 3 Summer David Otters.

Thank you, Chairman Fong. I want to start off with maybe just some. Data that I want to make sure we're all talking about the same thing. Dr. Perez, in your presentation. I thought I heard you say. And I just want to make sure that we're all clear.

I thought I heard you say that the enrollment growth has been met at, I don't know if you said several campuses, all campuses for the last several years. That is not the data that we have on the agenda particularly. I can point to page five on the public agenda.

Enrollment versus our target is actually down by tens of thousands of students over the last three years. Can you clarify what you meant with what you said compared to this data? Point.

So one, the perspective that I was sharing with you was certainly system wide numbers. Right. And so I think I would say to you to say that every campus met its enrollment goals would not be accurate. Right. And so I think that is true. What we are talking about is in cohorts. Right.

And so the last two years we have met the cohort numbers that. So I don't know if there's something particular on this page that you are working. What do you mean by cohorts? We don't refer to that. So when a. When students start, you have the cohort. We start in fall.

So you have fall 2025 which is where we are now is in the fall cohort. And then you count them by right now we look at them in the terms for first time students.

You look at four year graduation rates and six year graduation rates, transfer students, as you know, you look at two year, four year six. And so that we talk about them in terms of cohorts. Okay. And then we also talk about them as FTEs. Right.

Full time equivalent students, which is the number of units that each student takes. And then we talk about them in terms of headcount, which is another number that we also look at as well.

So we need to talk about the same numbers if we're having this conversation, which is very important. Would you then disagree with the data that's on agenda page number five, that in the year 22-23 there weren't 21,426 less enrolled students versus what was targeted and funded to the CSU system?

I would need to look at and compare that to the charts that I have and get back to you on that. Okay.

The charts that we have are based on CSU data that we received from the system. So specifically. From on. On the Enrollment for those years there. But we have Enrollment going back to 2015. 2015. And that data shows persistent decline in Enrollment, particularly over the last several years at specific campuses.

And it's difficult to have a conversation about declining enrollment if we can't agree on numbers. So I'm going to pause that for a second, give you a chance to look at your numbers because we have to talk about this, making sure we're all on the same page.

I appreciate that for clarification. Sir. Are you talking system wide or are you talking about specific campuses?

I'm talking about system wide and specific campus. We have data that we pulled from the CSU system on a campus basis. Happy to share that with you. What I'm looking at here, the system Wide data is what's on the public agenda that's been published since Friday of last week.

Great. Thank you, sir.

Thank you. I wanted. It's important that those numbers are accurate because we obviously have calculated based on those numbers the per student funding, which is again on our agenda, page seven, which I want to point out to the two individuals here from the CSU system because it's a system wide sort of conversation.

And this, this indicates a very, a very large. Average, if you will, discrepancy between. Some campuses and other campuses in terms of the amount of funding that the General Fund has gone to these campuses on a per student basis.

Where we have Maritime Academy receiving $46,000 per student and we have Fullerton receiving $9,200 per student and a lot of folks somewhere in between. No uniformity, no consistency. I like to ask maybe Mr. Luntz, if you could help us understand why there is a disparity, a difference between one campus to the other.

Is there a formula that's being utilized? What is driving these numbers to be so different?

Well, the biggest reason that's driving these numbers is economies of scale given the number of students that are being served. So Maritime Academy, if I recall, has, and they'll correct me when I'm, when they come up, but has under 800 full time time equivalent students.

And so it's a lot more expensive versus a campus that may have over 20,000 full time equivalent students to achieve economies of scale. Some of this, as noted in your agenda, is also driven by the amount of financial aid that is provided or fee waivers that drive that formula. So you know, clearly these are the factors that.

Recognize the significant difference from some campuses to the others.

Have you begun to do an analysis on your. Economies of scale and where that makes a difference? I'm identifying two campuses that I believe have different numbers of students. And I have a lot of data points here, but I believe, for example, your Los Angeles campus, and there is someone here from Los Angeles, actually Los Angeles.

I was going to look at two different other examples, but let's look at Los Angeles and Chico since we have representatives here, relatively similar amounts per funding per student, if you will. Let's just take those. How many students does Los Angeles have on a full time equivalent basis? 18,300. How many students does Chico have? Chico for 20.

25 on our. Page here for FTEs. Correct. It's a little over 13,000. I can give you that exact number. 13. That helps me. Give me. Thank you. And if you have it, I'll Write it down, Mr. Chair. Sorry. That's 18,390. Apologize. So there's a difference of about 5,000 students, roughly. Let's.

We're not going to get into the specifics unless the numbers are there, but at what point is there another step in the economies of scale where it justifies that two campuses with 5,000 students in difference receive the same amount of General Fund per student?

Yeah, I don't know off the top of my head, Mr. Chairman. It's been a formula that's been in place historically. Okay. But, you know, I'm happy to get back to you on that. Okay.

What is. So the formula is Pell Grant, you mentioned, and then something related to a size of a campus.

Yes. Economies of scale. Right.

When was the last time that the formula was reviewed?

I know that there was an effort under Interim Chancellor Kessler about two years ago to take a look at this formula and review that. My understanding. I was in a different role with the CSU at the time, but my understanding is they could not come to a consensus about major changes in the formula.

So I think it was just put on the back burner for the time being.

Thank you. And do you know. And again, don't expect it to, since you were in this role, but were there any driving factors behind reviewing the formula and trying to make some changes? Was there anyone at the system at that point that wasn't starting to see these discrepancies in numbers? Was there any of that?

I can only speculate, Mr. Chairman, but there were a number of things that were going on at that particular point in time. For instance, we had gone through an exercise with the Sustainable Financial Task Force Group that was looking at a number of different factors in funding per per FTEs.

We were looking at economies of scales and efficiencies on the administrative side to create the Multi University Collaborative Initiative. And I think this ended up being, you know, maybe the third part of the. Of that conversation, but I'd have to go back and take a look at it to give you any more detail.

Happy to do so, but not really clear. I wasn't. Like I said, I wasn't in that role.

Thank you. We were. Any of the other two items that you discussed implemented?

Yes, they are in progress and being implemented. Well, I say implemented. The work of the Sustainable Financial Work Group demonstrated that at that point in time, CSU was facing about a $1.8 billion funding gap, which has now grown to about 2.3 billion.

One of the driving factors was 10 years where there was no tuition increase and no tuition policy in place, which I think personally was very unfortunate. There were a number of other factors and some of them were mentioned by our academic chair, academic Senate chair, relative to unfunded mandates and additional cost pressures and growth.

For instance, five years ago, I think we spent our contribution to employee health care was in the neighborhood about 5 to 7 million, which grew to over 70 million in a very short period of time.

So a number of factors that we're taking this, so that is a continual work in progress to recognize what we have to do on the multi university side of that equation, which is look for economies of scale on the administrative side, try to achieve cost avoidance in the future and, and best case scenario, achieve actual savings. Sure.

And I think you'll have obviously costs that are certainly not within your total control. As you mentioned, retirement benefits, health care, those are always, always costs that aren't entirely within the control system and obviously always want to make sure we compensate our employees well and, and all of that.

I'm still, I think, you know, when you look at some of these differences and I, you know, Maritime Academy I think is an outlier, it's a very, very small campus compared to others, but there's still some pretty significant difference. I'd be interested in better understanding this funding formula, what is currently in it.

I think this is something that should be revisited by the CSU system and.

I think, and I'm happy to follow up with you then on that. Mr. Chairman, as you're well aware, I spent years, seven years with California Community Colleges on historically their equalization issue. Our seven years with the CSU and seven years with the University of California going through this particular exercise.

And the biggest challenge, of course, as I had mentioned to you in a previous conversation, is going through that exercise when the state's fiscal condition is such that there is an additional revenue to make significant changes. We are making changes.

As you're well aware, we have got a reallocation formula in place to shift resources from those campuses that are not meeting their enrollment targets to those campuses that have a high demand. And we are looking at other opportunities to recognize these, these kinds of shifts. But it can be very, very limited.

And particularly this year when we were faced with $144 million budget reduction.

Right. I completely hear you with that.

I, I will also think it's important that acknowledge, to acknowledge that the numbers that we have, and I don't know if you feel differently than Dr. Perez does, but you know, over the course of a few years under enrollment in the tens of thousands of students meant, you know, tens of millions of dollars that the system did receive and therefore was not serving specific students.

Hear you on the issue that there are other things that come into question in terms of costs. But I want to be, I think it's important that we are very transparent with the public in terms of what we're spending.

Especially, especially with what you just pointed out, which is there are some campuses with a tremendous demand, highlighting just a few. Long Beach, 80,000 applications, San Diego, 95,000 applications. These are just first time freshman applications, by the way. San Luis Obispo, 71,000 applications. In most of those instances, you know. Only about. Fifth or fourth of those students.

Ever end up enrolling in those campuses. And I'm curious, has the system done any analysis as to. Of course, all those applicants aren't, they're duplicate applicants, some of them applying to all of them, multiple universities. I understand that. But when students who apply especially I think was stated by Dr. Perez. Definitely.

I think in the first panel, a lot of our CSU students are very much place bound and they don't really, they're not looking to go anywhere else to go to school. They're looking to go to their local CSU or UC. But that's obviously also much more limited with less number of campuses.

So when that doesn't happen, I am very concerned that students who are local students that are applying to these campuses in particular, and they happen to be populated areas, maybe soundless, abyssal, you can make the argument not as populated, but that they're not being accepted into our CSU system and I don't know where they're going.

Has the system done an analysis to try and better understand student applicants, where they're applying to, why they're once they're admitted, why they're not enrolling. And then I want to talk about why not allow for more enrollment of more students, particularly the campuses in high demand. So those are two different questions you. Want to start, Dr. Perez?

Sure. There may be three things. Chair Alvarez, if I might go back to your initial question and we are happy to follow up. But referencing your chart on page seven, when I spoke in my opening remarks I was referring to the enrollment growth targets noted in our recent annual state budgets.

And so the chart on 7 is really looking at the, the difference in FTS between 20 to 25, not comparing it to any of our targets. And so we can offer additional clarification if there is still confusion related to that. I think also, I'm sorry, let's not.

Move on from that though. I think you're referring. You said page.

Oh, sorry, I was on page five. Yes, page five.

You're. You're sharing with us that our numbers on this page are identifying enrollment growth.

The percentage changes between 2020 to 2025.

We have raw numbers. We don't have percentage here.

Okay.

I'm looking at different data, data points. Okay. The agenda someone can share with her is, is the public agenda. So. But the second and third point that you wanted to make, please.

Thank you so much. And so then the other pieces are, are we trying to understand the application and where students are going? And what we do know, to your point, is that students are applying to multiple CSUs. We know that our first time students are applying to about 3.2 campuses and explain where they're headed.

And then our transfer students are about 2.3 campuses. And so decisions students have their eyes on certain campuses. I think it is also regionally bound and they are placebo, but I also think they're discipline bound if there are particular majors that are of interest to them.

We, as you have heard or may have heard in our student success work, our year of engagement work, we are working to provide near time, real time data to our campuses in different ways, including with the enrollment cycle and to your point, better understanding that students need decisions earlier. They need transparency, particularly around financial aid.

And we also need know that students are looking inside and outside of the state. And the earlier that we can provide those admissions letters, the better they can make those decisions to go to our campuses. And so we are sharing that information with our universities.

We have developed a dashboard that shows which of our campuses have already started admitting students and who have not. We will be sharing that system wide so that the campuses can see which of the universities are admitting so that we can continue to be, I think, transparent and to give admissions letters as quickly as possible to students.

Okay, so Lindsay, I want to go back to talk about the. Admission, not the admission, the targeted enrollment growth. And the reallocation, I think is what you're calling it, formula. I have before me CSU enrollment by campus for this school year.

Tell me about how this is going to work for this school year, how this is different than what was done before. As an example, Channel Islands is had a target enrollment of 5,941. Sorry, that was last year, 5,700 with an actual enrollment of 4,100, which meant that they did not meet the targeted growth by 27.5%.

Channel Islands also. Listed on our agenda as a $24,200 per student funding versus average, I would say is more around the 10,000 mark or so. So. We will. Now.

I'd like to better understand how we're going to address a 27% difference in their targeted growth versus their actual growth and funding that was previously, I assume, based on a targeted growth.

What is happening with the funding that they are not going to be needing since they have 27% less students than they are they were budgeted for, I assume in your approved budget for 25-26.

So, Mr. Alvarez, there's kind of two streams of. Funding that we are utilizing for purposes of trying to address those campuses who made the concerted effort to grow and get us as close as we could. And then as Dr. Perez has said, achieving our system wide target.

In the previous budget year, we took 20 million of one time reserves and allocated it to those campuses that can grow. We did the same thing in the current year, 20 million one time reserves.

In addition, recognizing a couple of years ago, I guess, that this enrollment issue per campus was going to challenge the system in meeting its overall enrollment target. And I mentioned this before, we established.

An enrollment reallocation policy that in theory would take 5% from those campuses who weren't meeting their enrollment target and reallocate that to the campuses that were growing. We were only able to do 3% last year, 3% this year, but we are.

Reallocating 5% in 26-27 for every campus that was short within 10% of their target to those campuses that would grow. So for instance, that would equate to about 25.6 million next year of ongoing funding reallocated to those campuses that are growing. So this has been something that the CSU has been able to do.

And will remain whether how much progress we'll be able to make based on the kind of funding that we're going to get in in the future because for one of those years, of course, we were still getting compact funding.

So I show one, Sonoma, two San Francisco, three, Maritime. Four, East Bay, five Channel Islands, all in double digit. I missed one. Humboldt. Sure. All in double digit. All I think over 20%. Some a lot more. Yeah. Of not meeting enrollment growth, I then see San Marcos, I believe was at 15% over the target.

I see Pomona at 13% over the target. Monterey Bay, in this case, 10% over the double digit. What. Is being done to address this very. There's. It almost seems like there's two very different things happening. Yeah. Where there's Growth and some people who are not just meeting their growth but exceeding it.

And I assume they're using their own resources to do that. Right. Responding to the need that exists in the state and others that will receive a sounds like fractional marginal reduction in their annual allocation. How does that make sense fiscally? Respect your extensive history and all this and just. Thank you.

I'm concerned about that and I'm also concerned about the. And I want to ask you to answer separately. 20 million from reserves in one year. Now you just came July 1, I get that. But 20 million for reserves again a second year, I don't know if that's a pattern now that we're going to be seeing.

But dipping into reserves to that amount and not right sizing does not seem like a sustainable model.

Yeah. And maybe the third piece of this explanation will give you a better comfort level on that right sizing. So as I indicated, we've gone through 21 of the 22 campuses, fiscal health monitoring, looked at their action plans. I'm going to utilize San Francisco as an example.

When we took a look at San Francisco and the overwhelming challenges that they had, they needed also an additional one time investment over a three year period for a strategic enrollment plan specific to that campus. So we worked with them on that plan.

The President presented that plan last month, we reviewed it internally and we feel like we can support that plan over that three year period of time. We've also made that offer to other campuses or to the extent that campuses have received funding.

For instance, Sonoma have insisted on seeing aspects of that plan with metrics that will, that you actually have asked for in the, in the budget Bill Language that they need to provide so that we have a clear understanding of how they're going to make that progress.

And hopefully I have identified best practices that might assist other campuses in making progress. So it really is a three part effort. Right. It's the one time funding that we provided for those campuses who did their due diligence and stepped up.

It's a permanent reallocation for those campuses that are not meeting their enrollment target to those campuses that are more than meeting their enrollment target.

And then it is a concentrated effort to take a look at the strategic enrollment approach and the fiscal issues associated with any given campus for purposes of what is your plan, what are the metrics and having hopefully a very clear understanding by the time that we're able to report to you in the spring.

So are you telling me then in this case of the San Francisco example? Sure. I'd like to better understand exactly what's being asked of campuses. They are 27.9%. Less. Enrollment than their targeted enrollment. Again, you approved, I assume a budget with a. Let me. Let's answer this. We're campus budgets approved based on their target enrollment. Yes.

So now San Francisco is enrolling 27% less. This rough math here, it's about 6,500. Less students. Rough math again in my head. Now correct me anyone if I'm wrong, but that's 10,000 per student. We're talking $60 million. Does that sound right to you?

Hang on one second. Is that about right? How much do we. Jenny Kitchell is my ABC for budget.

Roughly 10,000 per FTE is with the state funds. Correct. So 60 million. So this year we are giving San Francisco $60 million more than what their actual enrollment is going to be and what you're saying.

But you have to, minus the amount of funding that is being redirected on the 3%.

So, so walk me through that math. So I know exactly what.

Let's see. That would have been 3% of what? Of their overall enrollment. So that would have been, I think about $6.3 million was their reduction in the current year. Ballpark.

So they're still keeping 54 million? They are. And you're telling me that the $54 million is partially is being used for a strategic plan for over three year growth and I assume other initiatives related.

To that and also to be able to have a glide path for some of their budget decisions.

So Cisco is going to have significant budget reductions and there is a process, as you're well aware, there's a process in place in the event that they have to resort to layoffs for notifying employees and the time frame for being able to do that. And so this is a significant amount of money to this campus.

So is Sacramento keeping the $54 million in a reserve or are they spending it?

Zero, I'm sure they're spending it. Every penny of it. So what you just. And they're spending it again. Retain faculty, retain staff, retain employees, maintain the academic programs they have in place until again they can have a glide path. Mr. Chairman, this is not something that happens overnight, as you can imagine. That's right.

There needs to be a glide path. So what is it?

Earlier, in order to be able to serve the students, there needs to be a glide path to ensure that students can get through in their four year degree, they attain some measure of success and we don't leave them out on the cold because we've eliminated all the poor sections that they need to graduate.

Right. So what does the glide path look like? Are they doing? Are they currently they've given us a plan.

I can't tell you what the glide path that looks like because the plan looks good. But we need to make some progress on this. Hopefully we'll have a better understanding of how that's moving along in the spring. But we just got the plan last month.

Okay. You refer to this plan as part of Mr. Fong's question on what the Legislature required of the CSU system. In answering his question, what I heard and maybe I misunderstood is that those plans are not going to be available. Before the spring. At the spring.

When are the plans going to be made available to Legislature per, per the.

Budget act and the timeframe of the Budget Act. You asked for them in the spring. We'll have them to you then.

Okay.

What do you tell campuses where the demand is high and there's a lot of growth that they have? I mentioned a few earlier. What, what do you tell them in terms of we want to help you grow in the ways that we think you can serve more students? What is their glide path into the future?

Sure. As part of this health—fiscal health review—I asked the question that I've had to deal with my entire higher education career. If the state does not have the ability to provide any additional funding for enrollment growth, what is your ability to continue to take the students?

And the answer is we would not have an ability to take the students. We can serve a little bit more than, than serve and address some of the unfunded students that we may currently have, but it would be a challenge for us to be able to grow in the future not knowing when the state may be able to do this.

And I think that's a fair response given the fact that I was staff person to the Senate Budget for the very first compact between then Governor Wilson and UC and CSU.

I think there have been six compacts since that time, and not a single one has been fully funded through the full either four or five years of the compacts. So, my advice to campuses is to be, to be cautious as we move forward. We'll see what happens in the January budget.

Mr. Chairman, we can't thank you enough for what you did last year. We can't thank you enough. I've been doing this a long time. And last year, in my opinion, was the highest year I've ever seen for CSU being a priority to the Legislature and the Governor. And we can't thank you enough for that.

It would have been horrendous for us to take an 8% budget reduction. But that having been said, we know you've got other competing challenges that you're going to be dealing with this coming year. So, we're trying to, we're trying to move forward and be realistic about what we have an ability to do.

I appreciate that. That is sort of the intent of the hearing today, because we want to continue to serve students and knowing that we may have some challenges ahead. And so, I think as we think about glide paths, there's a glide path of some folks certainly gliding up and some gliding down. Yeah.

And those two need to really make sense together. They cannot exist without one another. And so, I, I, I'd like to learn more from you as to why a 3% is the most logical number for a glide.

I assume you, you, you consider that part of the glide path in terms of getting individual campuses to make some difficult decisions. But why? That's the right number and what glide path you're giving or at least some direction giving to those who want to grow.

Besides, you're not going to get any more money except if maybe there's some reallocation and reallocation will go. I don't know how that formula is being determined. A lot of work that I think I'd like to see before we approve a budget on the formula on glide paths. I want to go back to some difficult conversations.

But also I think in challenging times, it's sort of also an opportunity for us to do things differently. The campuses themselves have talked about what they've done differently to really regain the enrollment of students that they serve so well. From a system wide perspective, I heard in the opening comments revisiting any number of things, it sounds like from a strategic plan.

The graduation initiative showed that we did not reach any of the metrics in terms of graduation rates from the CSU system. I don't know if campus by campus that was different. But as a whole, that did not occur. That also impacts campuses.

And when more students are there, less students can come in. That's an issue. More student debt, which we always want to avoid. But does this mean then, from a system wide perspective, revisiting—and I like, I heard, I heard some things that I like. I don't know how quickly they're going to get implemented.

But aligning programs to workforce needs, things in demand. Our community colleges and leaders at community colleges do a great job of adapting real quickly and to what the demands are in the community. I don't know that our segments of higher education, UC and CSU, adapt as quickly. It may take a little longer for a variety of reasons.

I know there's challenges, but clearly, we probably need to do that. I'm seeing it from a very local perspective. But when you talk about realigning, what does that mean to you? What does that mean in terms of new things versus perhaps cutting old things?

Is that on the table or is it going to be too challenging and too difficult to do anytime soon because we need a multiyear landing for this? How quickly are we going to respond to that?

Right. Thank you, Chair Alvarez. As I listen to the conversation today, I am reminded that we might be oversimplifying strategic enrollment management. Oftentimes, people think that enrollment management is about bringing students in the number of applications that admit.

But what we know and what we are shifting the culture in the CSU to be and through graduation initiative and our strategic plan is that true strategic enrollment management is, one, having a long-term strategic plan that aligns one access which we all are committed to, I think throughout the state, but also to success. So, retention matters.

And what we've talked about with graduation initiative through the year of engagement and what we know to be true is that we have graduated more students than ever before. The number that we have shared is about 150,000 more than we would have, had we not.

And we don't want to oversimplify and say that we failed our goals for graduation initiative because we actually do have goals that are more aspirational than probably any system in the nation, quite honestly. And so, we're okay with bold goals. And so, we did double, almost double our four-year graduation rates.

When we talk publicly, we have said that we did plateau around six-year graduation rates. And some of that is probably because we put such an emphasis on getting students through during that four. But we have to grow and do better in that.

And so, our new model for graduation initiative and student success is working with the campus to say, one, we need to focus year to year on our retention rates. So, it's no longer just looking at the end goal. Every year, each campus has a goal for retention. That is critical to student success.

And we will see our full-time equivalent number go—numbers go up—as we continue to retain more students. We are primarily focused on retaining students that second to third year. We know and have said publicly we are losing too many students, particularly Latino students, our second to third year.

And we can bring as many in as we as we want, but if we have a leak that second to third, we have a problem. And so, that's what we are focused on, system wide, is closing that leak. And through the student success framework, we have said it cannot be a one size fits all approach.

It has to be personalized. We have to use AI. We have to sit and give students good curricular and co-curricular plans and good, accurate advising. And we can talk about that, but those are critical to get them through.

I share all of that with you to say all of this is interconnected—our strap plan, our student success framework, to our strategic enrollment management plan. And strategic enrollment management is also saying we have to start with the end in mind. What do our employers need, our workforce needs? What are those careers of the future?

We need data. And so, you may have seen at our board meetings, we have a data infrastructure, unfortunately, and this is not judgment against anyone, but it is from 1973 and that is unacceptable. And so, all of these plans that I'm talking about are three-year plans. They are aggressive and they are urgent.

So, we have a plan to update our data infrastructure so that we can get access to data in a more timely fashion. So, once we identify the workforce needs, it is partnering with our faculty and our academic affairs colleagues to align our academic programs to those workforce needs.

So, we're almost starting with the end in mind and looking backwards and working backwards. And then obviously, as you just suggested, we can no longer continue to offer low conferring degrees. That is not operational efficiency. And so, there are dialogue and conversations that have to happen, really, and I would say our workforce needs are not just statewide, as you know, they are regional needs. And so, we will offer—our goal right now is to offer our strategic enrollment management plan at the May board meeting, is our hope.

And that takes into the workforce needs, the regional needs, but then also outlines how we begin to align our academic programs in partnership and collaboration with our faculty. Now, that level of detail will not be offered in May. It is outlining the process by which we work with our faculty and colleagues to do that work.

And so, I think I would say, and I think you suggested everything is interconnected in the work that we're doing and we do understand the sense of urgency that's needed to do it.

Let me ask one final question. Is that not something that gets done on a regular? You mentioned 1973 and I was like, it's before I was born. This is not something the CSU system has done on a regular basis to meet those ever-changing demands?

Sure. I think it has been done on a regular basis where I think it is slightly different, if I'm being honest, and I've been in the system for 25 years, at the Chancellor's Office for three.

I would say to you that there is a new—with our new Chancellor—a new desire for accountability and really having bold, courageous conversations and really meeting the needs of our Californians.

And while individual campuses may have been doing those things, and I think you see them in the data, what we are doing differently now is working towards systemness. And for folks that don't know what that means, it really is honoring the unique individual identities and characteristics of our campuses our while maximizing our collective system wide impact.

And so, I think where you see us talking about it differently is saying we're not just 22, 23 different universities, we are taking the interconnectedness of all of us.

So, for some of the low conferring degrees that may be offered in the system, while maybe one campus cannot offer that degree, what we can do is really think about how, as a system, and what was alluded to today by I think Chair Boyd and obviously, and we called her...but really, how do we take some of those low conferring degrees and maximize our system-wide impact through on course learning, course sharing, and other ways in order to maximize enrollment.

Great. I want to thank you. I want to also acknowledge the three campuses that are here.

I know I didn't ask a lot of questions, especially for what you shared on the specifics of what you're doing to create the partnerships that you're all doing in your unique parts of California to try and serve students and meet them where they're at. I think that's critical.

I think this conversation is really how are we going to allow you to do that more is what this is about and do it more efficiently so that you can actually deliver the product that you all do, which is a great education that is still, I think in my opinion, the pathway into the middle class in California.

So, the system is important enough that we have to have these conversations on how we're going to make these really difficult decisions. I—my takeaway, as I end my comments here, is I'd like to see the formula, why the formula is what it is, what goes into it.

Happy to spend a lot more time with you individually outside of this space, but I am going to assume we may have a follow up hearing in the budget process on this to make sure that the conversation on budget for CSU is appropriate as it relates to feedback that happens out of this conversation today.

So, looking to that, how does the student success play into this formula so that we can get students, you know, through the system and not leak, as you say it in your comments, and how do we just, again, continue to serve what appears to be still—I'm glad to hear and glad to see because the data is what demonstrates that a university system that is in high demand and that I think Californians still expect to work for all of them.

So, thank you all for your presence and for your comments and for the questions and answers.

We'll have a second panel coming up. And I ask those who are on that panel to come forward. We have—this is on cost saving measures. This is all, as was stated by, by the Vice Chancellor, interconnected and related. So, we will have conversations on cost saving measures which we talked—touched upon a tiny bit.

Patrick Lenz continues to be with us, Vice Chancellor, and CFO at CSU, Dr. Corey Cook, Vice President, CEO at Cal Poly San Luis Obispo Solano Campus, and Jeff Wilson, Vice President, Chief Financial Officer at San Francisco State. Trying to get a perspective from different folks here of the system. Thank you all for being here.

And Mr. Lenz, we will kick it off with you.

Well, thank you. Thank you, Mr. Chairman. And I mentioned so much in my previous testimony. I'll try to be brief. Clearly, this...change for the CSU started about three years ago with Interim Chancellor, Jolene Kessler.

And it was a recognition of, as I mentioned earlier, 10 years without a tuition policy and how we were going to be able to address our growing costs, whether it was compensation or mandatory costs, such as health insurance, liability insurance, liability deferred maintenance, these kinds of costs. So, the Sustainable Financial Work Group was created.

We went through that exercise.

I mentioned the results of that study, but I think more importantly, a recognition, and Dr. Perez alluded to it earlier, of what can we achieve as a system versus 22 or at that time, 23 individual campus and clear—clearly—there were a number of things in the shared services area where we felt like we could achieve economies of scale that would at least reduce our costs in the future, if not achieve real savings.

So, we created CSUBY for our procurement, working with all of our campuses, and you'll be happy to know that we will go live with all 22 campuses in CSU by in January. We are looking at our human resources system and making progress. We've staged this out within five different stages with our campuses.

And with many of those campuses having full implementation by the end of next year. We are looking at other areas relative to technology, financial aid, those kinds of things where the collaborative efforts, or regional efforts, in some cases, of the campuses could benefit us and achieve savings on the administrative side that we can shift to the academic side for purposes of addressing many of the needs that you outlined in the previous panel.

So, I don't know what much more to say on that, given your time, but I'm happy to address questions along the way or allow the panelists to begin their presentation.

We'll come back for sure. Thank you. Who'd like to go first? Welcome.

Thank you. Good afternoon, Mr. Chairman. Thanks to you and thank you to Chairman Fong for your interest in the integration of Cal Poly and Cal Maritime. We're now operating as one Cal Poly, a single university with two campuses, one in San Luis Obispo and one in Solano County.

I'm honored to serve as the Vice President and CEO of the Solano Campus, home of what is now known as Cal Poly Maritime Academy, and to represent both campuses here today. This integration represents a strategic investment in efficiency, equity, and educational excellence. When this process began, we faced significant differences in structure, processes, and in student services.

Our task was clear: to unify our operations without losing the distinctiveness of each campus. We remain focused on enhancing student success in growing, not just preserving our Coast Guard licensure programs, which are vital to national security interests, as well as to international trade and economic development.

Cal Poly's financial aid plan will expand access to these vital programs to students facing socioeconomic challenges from California, from Pacific spacing states and US-affiliated Pacific Islands. We're building a matrix leadership model designed to foster collaboration, transparency, and shared purpose across both campuses. Our academic alignment has progressed with care and intention.

Program mapping is now complete, revealing strong synergies across the two campuses and across disciplines. Curriculum mapping is underway, guided by a unified academic Senate—earlier this year, approved the integration of Solano Campus faculty into the Cal Poly Academic Senate.

That same collaborative spirit has guided our student leadership, alumni, and foundation boards which are integrating bylaws and operations to reflect our new multi campus structure. Associated Students, Inc. and Associated Students of California Maritime Academy have been working together for more than a year to merge governance, ensuring that student voice and leadership are represented across both campuses.

These transitions will be completed by July of this coming year. Operationally, we have aligned our systems and budgets. Just last week, we achieved a major milestone with the integration of our HR, PeopleSoft, and purchasing systems. Our next major milestone, academic integration, will directly enhance student success and unlock further efficiencies.

Our last commencement at Cal Maritime will occur in the spring of 2026 and by fall of 2026, we will be operating as one Cal Poly where all students will be admitted into Cal Poly and will earn Cal Poly degrees.

While the full financial benefits will unfold over the next several years, we're already seeing measurable efficiencies across contracts, systems, finance, student affairs, and enrollment. As a result of the integration, seven high level administrative positions have been eliminated. This includes one President, four vice presidencies, and two management personnel positions, representing $2.6 million in savings.

In addition to those seven MPP positions, there were ten additional FTE positions eliminated, totaling $1.3 million. Dr. Perez indicated that momentum is palpable across the CSU system. That is certainly true on our campus. Our enrollment trajectory reflects the renewed energy kickstarted by the integration.

New student enrollment at the Solano Campus is up 9.38% this year, one of the largest year to year increases in recent memory, a strong indicator of growth and confidence in our shared future.

The existing class that we just entered, one of the largest cohorts in memory, is going to be among the last to sail on our current training ship, the Golden Bear, among the first to sail on the new training ship, the National Security Multi-Mission Vessel Golden State.

They will graduate in the 100th year of Cal Maritime and will be the first to graduate as Cal Poly graduates. Thank you so much for your interest and I look forward to your questions.

Good afternoon, Chair Fong and Chair Alvarez. Thank you for your interest in the San Francisco Bay Region Network. I am honored to represent the network and its three universities at this hearing today. My name is Jeff Wilson, and I currently serve as the project leader of the network.

As the project leader, I serve as the Chief Operating Officer and report to the three presidents for the networked universities. The vision for the network was conceived by Presidents Coutrer, Mahoney, and Sandeen at Sonoma State, San Francisco State, and CSU East Bay, respectively.

The foundational aim is to address the three universities' financial challenges and ensure financial resources are optimally used to support student success. The network is not a merger. Each university is retaining its separate accreditation and academic programming. At the same time, the presidents recognize the universities must have the administrative services and infrastructure to achieve our collective missions.

Together with administrators and staff from across the three universities, my charge is to achieve our vision by aligning employees and our technology resources to innovate and create a network-shared services organization that delivers the services our universities communities expect achieves long term financial sustainability.

Compensation costs account for nearly 90% of our university's operating cost, so we will rely on significant savings from streamlining management positions and workforce realignments across network functions and positions. Other opportunities exist in purchasing, leveraging three universities in the network for purchasing power and lower overall cost. Another example is reducing redundant technologies.

The three universities operating independently have multiple technology platforms, unifying those into one platform for the network. Based on attrition, hiring freezes, not filling vacant positions, and eliminating some management positions that will be shared within the network, we estimate current year savings for information technology and procurement and accounts payable of approximately $1.5 million and for that to exceed $3.4 million next year once the network is up and running.

Overall, our aim is to achieve cost savings of between 15% to 30% of current cost across integrated functions. We're moving quickly but thoughtfully.

We are in the process of finalizing our network leadership, defining our teams and processes, and integrating technology across the three universities for our January 2026 launch. While the network will not solve the network university's financial challenges, it is one step toward long term financial sustainability. Thank you again for your interest in the San Francisco Bay Region network.

Thank you to you both. Really appreciate you being here and sharing those very specific examples of some of the work that's happening with your systems. And I think—one, acknowledging I've never ran a university system and so, but I think what I'm gathering is this might be the two best examples in the system of what can occur when it comes to economies of scale, conversation from the previous panel, and other ways to identify potential efficiencies within the system.

So, the first, I guess, general question would be to Mr. Lenz on the system wide—are these the only initiatives currently that are occurring where we're trying to consolidate or identify, achieving economies of scale in a way that's different than just at a single campus?

Yeah, these are the only two what I characterize comprehensive initiatives. We are exploring and campuses are having conversation with different other opportunities. For instance, Sacramento State has recently negotiated with Stanislaus State the opportunity to share a CFO rather than two CFOs at the campuses.

And other campuses are looking at these administrative opportunities as it pertains to sharing personnel or sharing services. One of the areas where we probably have the greatest concern is in IT because we're a PeopleSoft system where a number of these individuals are retiring us, they're leaving us.

Trying to find the level of expertise and maintaining the system has been a real challenge. And then there's facilities where and, again, Mr. Alvarez, I'm going to thank you in advance for your work on AB 48, which we hope will come to fruition as a general obligation bond opportunity for the CSU. That hasn't happened in 20 years.

But because of the inability to move the facilities, as we had in the past when we had that level of funding, there have been shared services as to pertain to both level of expertise and resources for—so, these two are the most comprehensive efforts, but there are other efforts going on within different campuses.

Thank you. You reminded me of a question that I'd like to ask because I'd like to get a context and you may not know the answer to this because—but you mentioned the fact that CSU has not had general obligation bond support for 20 years. I'm curious because I'm looking at the '23-'24 General Fund.

Not your operating budget, I should say, to the system. And I'm just curious how much of the funding to CSU either has grown or maybe it's stayed the same, if you even can recall, when it comes to statewide capital infrastructure financing. Here's my point.

I'm concerned that we are using more resources to maintain buildings habitable where we could be funding students and programs. And I don't know that that's true, but that's why I'm asking.

It's a very valid. I'm going to stop asking questions or prompting questions I don't know the answer to you, but this one I happen to. It is true. This is, this is—our deferred maintenance is growing significantly and it's, and it's a, it is a major challenge.

We were the beneficiaries in 2014 of your support for a change in our ability to finance debt service and we do set aside about 25 million a year for purposes of generating ballpark about 300 million to do new capital facilities or address some of our facilities' needs. We've also been the benefit beneficiaries of some investment funding.

For instance, last year we had about 95 million in interest earnings that we could apply to deferred maintenance. This year it's 130 million, 125 million. So, but, but it's incremental. It's very, very small. I guess demand is overwhelming.

I would just ask you and again for another conversation, but it did—to the extent that funding of capital projects, through any number of means, campus wide or system wide, is potentially inhibiting the ability to then do investments in other ways as it relates to enrollment and on the growth side. Certainly, interested in that.

Let me ask specifically, on the Channel Islands, on the San Luis Obispo—I don't want to call it merger because that's not what you call it.

Integration.

Thank you. Integration.

So, if I look at the operating budget and also don't expect you to have the numbers, but I think maybe this exercise will be really helpful for us as we look at more integration to the system.

And maybe there needs to be more than just this hearing, a post report once this gets fully implemented, and it sounds like you're well on your way to doing so. But the, the Channel Islands and San Luis Obispo operating budgets

Maritime.

I'm sorry, Maritime. Sorry. Maritime. And San Luis Obispo. Yes, San Luis Obispo Maritime. Thank you.

Are—so it's like 446 in the 24 year. About 50 million to maritime. How—you talked about some of this very specifics, and thank you, of reductions and reaching those economies of scale. What is that going to mean from a budgetary standpoint, whereas Maritime was roughly $50 million of operating budget, what will that—I don't know what you're going to call it, campus, or how you're going to refer to Maritime, that program, if you will. What cost are you anticipating for that?

So, the way the budget is working is that the budget of the Maritime Academy, formerly Cal Maritime, is now part of Cal Poly San Luis Obispo.

So, you've assumed it.

Cal Poly San Luis Obispo has assumed the budget of Cal Maritime. There are significant cost savings, as I noted, as a result of that integration.

There's also extraordinary opportunity for us to rebuild and grow our enrollments. The operation in Solano County is very lean at this point. There were a lot of reductions made over the years prior to this integration. We are very optimistic about the continued cost savings over the next several years.

We're also very optimistic that we'll be able to reach our enrollment targets now that we're fully part of Cal Poly.

So, just gotta point out the data. This year in particular, not, not, not trending in that direction. Right. And it's been that way for some time, which is why this is a timely initiative. What specifically do you think will actually lead you to that? Now, mindful, I want to acknowledge always facts when we have these conversations.

We're talking about a 14—1300, 1400—student count at Maritime. So, it's not in the thousands or tens of thousands as other campuses, but still important because these are students. So, we're really talking about 500 actual enrollment, number that's less than the targeted enrollment. So, where do you hope to get this to in the next year, two, three years?

Like, where do you want to go?

Yeah. So, the plan that was approved by the CSU system is a 2% growth each year and a 1.5% growth in our increase in our retention rates. Again, being part of Cal Poly, we're confident they'll be able to reach that target.

Our cohort for fall, as I mentioned, is almost 10% higher than it was the prior year. We're at 862 FTE this fall. That is a significant increase in terms of the size of that entering cohort.

I've been spending a lot of time meeting with the local community colleges, with the local school superintendents, rebuilding local pipelines that over previous years had gone stale. And again, having an opportunity to build on the Cal Poly brand in the Bay Area is an extraordinary opportunity.

So, the 1,300 target, I—assuming the system is now, since your actual plan is only to increase 2% off of current year, are we realigning targets for maritime as a result of this?

We're now within the context of Cal Poly, yes.

Yeah. Yeah. They are.

Okay. And that's effective which, which school year or fiscal year?

I believe next fiscal year. Is that next fiscal year?

'26-'27.

So, the numbers here for Maritime will be more aligned to the 2% growth over the 862 that you said. Thank you. Appreciate that. Very fascinating, San Francisco, what you shared. Interested in—there's a lot of sounds like technology that's being integrated. New buzzword for this Committee will be integration. I like it.

'26-'27.

What—do you foresee any other initiatives or what you shared with us today is the extent of what you think this, this current effort will lead to?

It's just the beginning. We're human information technology, procurement, and accounts payable that will launch in January. In the spring, we'll also begin the process of integrating human resources in accounting and finance. After that, we will start looking at the back office administrative part of what we refer to as enrollment management services, such as the back office part of financial aid, records.

Those really clerical data part of those functions for future integrations.

Those all sound, correct me if I'm wrong, like technology and systems. None of those are actual personnel that are doing this work or is that also part of this?

Systems driven, definitely. But certainly, we have staffing in those areas.

Okay, we heard, I think it was in the introductory comments about or in one of the questions CFO, potential—I don't think it's a done deal, sharing between a couple campuses. Are we not looking at some of those models for the San Francisco system?

That is already in place.

Yep.

It's already in place.

So, remind me what's already in place then in San Francisco?

So, I serve as the vice President and CFO at San Francisco and the interim vice President CFO at Sonoma. East Bay is on a different model, but eventually there will be one CFO for the network.

Okay.

So, we essentially eliminated two CFO positions for our network that will be overseen by one CFO.

What models are you looking to, either individually in your two efforts or system wide, that are happening in other places to do this work?

I think this has really been a collaborative effort between the Chancellor's office and the respective campuses. Campuses are so unique in where their demands are that they may benefit by other positions versus a CFO where they might have more collaborative efforts.

So it really has been driven by conversations between the presidents at this point, at this time in consultation with the Chancellor's office. So, for instance, when, when, when in the SAC state, Stanislaus is a done deal.

So when they were having this conversation, they were first trying to, between the two campuses, rightfully so, outline duties and responsibilities for this particular position. Because there's a lot going on at both campuses, as you're well aware.

And then once they had defined that, they had brought that to the Chancellor's office for purposes saying, we think that this approach will work, and here are the reasons why. And so we talked with the two presidents, we looked at what their plan was, and then we subsequent.

And the President, of course, talked with the Chancellor, and the Chancellor asked us to review it. We subsequently gave our support for this plan.

What would. Why would campuses be incentivized to do this just on their own? Cost savings. But they're not really being asked to achieve cost savings. They're giving a bud, given a budget.

And I guess that naturally they may not. Well, that's not true. They are being asked to achieve cost savings in different arenas, but they're challenged on a budget front. And what we've asked them to do is to look at the administrative side of the equation to where they can achieve savings.

And so that is exactly what they're in the process of doing.

I raised that because in the opening comments and certainly over the last few weeks, people have just been talking about, you know, where are we achieving savings and not spending more in ways that aren't serving students. And so. So it sounds like the natural pressures of a budget that gets approved really lead them to identify those.

That's part of it. But it was also, again, a recognition of the work of the Sustainable Financial Task Force group that says you have this growing deficit and without a fee policy in place, or if at some point in time the state is not able to honor the 5% a year compact agreement. What is your plan?

How are you going to be able to manage not reducing those kinds of things that, as I alluded to earlier, would impact students and student success and graduation. So campuses have been looking at the administrative side.

Yeah, I want to make another comment that is important because we've said it at almost every Committee as it relates to the compact that was a compact or at least a conversation or I don't know if it was a directive. I don't know how it happened between the Governor and the segments.

The systems Legislature I think said I wasn't here when that occurred. But I think it's important that historically we recognize that the Legislature said we are not party to that compact.

And I'm not saying that, you know, we obviously always try to work together, but I think it's the important message is we should probably have more integrated conversations for expectations. That's what these oversight hearings are about because. We want to see growth, but we also don't want really it to be just.

A platitude or something that's not realistic.

And I think I said that when I first took on this role as chair is let's have conversations about where we're really at and where we can get you and not create expectations that are false false for the public and much less for mainly your financial folks who have to do this difficult work on an annual basis.

So I think that's important for as long as we're around. We should remind ourselves that this is a more of a. We should definitely try to have some goals. But even you know, your girls goals on graduation, they're goals that are aspirational and then always reconcile I guess is the best way to talk about this.

And I wanted to say this in the previous panel the way we do with with education K12 really and which is we base it on actual numbers versus what was projected and that's how we, we we true up our numbers with education system, our K12 education system.

We may need to look at how to do that better with the system if that is more helpful for your future planning purposes. I think it's a conversation we should at least talk a little bit more related to the previous item. But. Thank you for the work that you two are doing.

And helping us see how perhaps more of this is maybe more in the future for the rest of the system and how hopefully it can be worked out in a way that is beneficial to operations but also to students. Thank you. And turn it over to Mr. Fong.

Thank you so much, Mr. Alvarez and thank you to our panelists here for the presentation. So when we look at regionalization, when we look at the different networks, we just want to make sure that students, faculty and staff at the campuses are still able to access the services, administrative services in a timely and efficient manner.

So approach it to you. Do you have any comments on it?

Thank you for the question and it is at the center of all of the work we're doing. This was a cost savings measure, but we realized being able to deliver services and maintaining service levels that our students, our faculty and staff expect will be critical for the network to succeed.

And we are introducing an innovation for the three campuses and that's a network support center. So it will be a one access point for all of the services that are part of the network. And we will have customer service metrics and service delivery metrics to make sure that we maintain the standards that everyone expects.

Thank you for that context. And then also, I believe in your comments and also on page 10 of the report you mentioned the network would Hope to achieve 15 or 30% savings in subsequent years. Do you have a better projection as to what those subsequent years is that two years from now? Is that. So? Any projections there?

We're currently working with a three year plan.

Three year plan. Okay.

And those savings will vary by function.

So in terms of technology, hr, a number of the issues that you're. You're working on. Okay. And also this question is for maritime. Similar question I asked there in the prior panel. But what are some of the. Strategies that we're using to recruit local students?

We know the maritime is, there's students that are aware of the campus universities. What are we doing? How can we better prepare our local students for their local universities, including maritime?

I think this is an area, obviously this is an historic integration and one that enables us to continue to serve our critical mission. We're the only state maritime academy on the West Coast. We're one of six state maritime academies in the United States.

I think this integration with Cal Poly really enables us to draw upon their extraordinary expertise and success in driving student recruitment, retention and graduation. As I mentioned earlier, we're trying to rebuild pipelines with local community colleges as well as in the K12 space.

We talk a lot about sea blindness, that the maritime sector has not gotten as much attention in recent years. But with a lot of investment coming at the federal level, we're seeing renewed interest in the maritime industry almost daily. There's a piece in the New York Times or Wall Street Journal about the importance of the maritime sector.

And so for us it's this opportunity, drawing upon the extraordinary expertise on our campus in San Luis Obispo, to re engage with local communities to drive enrollment. We get a lot of students from Los Angeles, from Long Beach, from San Diego, from the other Pacific facing states.

And we have an opportunity to rebuild local pipelines from the Bay Area.

Thank you. For that context. And so you mentioned maritime Cal Poly and there's a large physical distance also. Right. How do we ensure that those types of services and integration are being available to students, faculty, staff and that they're understanding of the potential changes?

Yeah, so there's a physical distance, but philosophically there's a lot of commonality. So our campus didn't use the term learn by doing, but that has always been embedded into the DNA of the institution.

So the fact that we are integrating two institutions that are very like minded in terms of how they approach student success has made the integration much easier. Now, granted, it's very complex to integrate two institutions and a lot of it is about building relationships on both campuses.

So I spend quite a bit of time in San Luis Obispo. The leadership at San Luis Obispo is on our campus every week. There are leaders from San Luis Obispo on our campus, face to face time with staff, building their teams.

I have a leadership team on our campus to operate this matrix model that integrates with the leadership on the San Luis Obispo campus. So there's a constant effort to coordinate what we're doing on the two campuses.

And I think that's. And you hit it on the dot. I think the coordination and collaboration is going to be like, very critical as these efforts continue to move forward and to make sure that staff, faculty, students are all engaged and at the table, part of the shared governance process.

And that's something I think change is always hard.

And so as you go through this process, making sure the open lines of communication and letting folks know this is happening, that this is how you can get engaged, this is how you can get involved, and this is how you can give your input and have that feedback, I think would be critical.

So I think you're kind of going to be the poster child for the CSU system as these types of efforts seem to move on across the system.

Thank you, Chairman.

Thank you for that context. Those are questions I had. Thank you, Mr. Chair. All right, thank you so much to our panelists here. I appreciate all of you and your expertise. At this time, we're going to transition to panel number five, the use of additional state funds.

Patrick Lentz here at the table again, Interim Vice Chancellor and Chief Financial Officer, CSU Chancellor's Office. Thank you. We also like to welcome Dr. Chrissy Holliday, Vice President for enrollment management and Student Success at Cal Poly Humboldt, and Dr. Rob Eiler, interim Associate Vice President of Government Relations and Professor of Economics at Somona State University.

We'll start off. Mr. Linz, you will each have five minutes for your presentation.

Welcome. So clearly. And this has been my history in higher education, you know, it wasn't as great of a challenge when I was with the community colleges because of Prop 98, you know, and you both can appreciate that CSU and UC were different animals.

And Mr. Alvarez, I, I sung the same song when I was representing the Legislature as staff of the Senate budget Committee on the compacts. You know, they're with you and the Governor. They're not with us. But, but how quickly my change to my tune changed when I. Edit. And it, you know, it was a conversion. But.

The, the, you know, the, the, the thing that I think challenges university systems is we are slow turning ships and. We look at resources and we work with you on your expectations because I get it, I get it. These compacts are negotiated with the Administration.