Messages

Navigating Financial Challenges Strategically

February 26, 2025

To the Golden Eagle Community,

On January 10, 2025, Governor Newsom announced his budget proposal for Fiscal Year (FY) 2025-26. The proposed CSU budget reduction and projected system enrollment target decrease for Cal State LA combines for a loss $24.6 million or 10% for the university’s divisional budgets.

The Governor had previously agreed to a 5% annual increase to unrestricted base budget funding provided by the state to the CSU system budget (essential to meeting negotiated compensation increases and other growing obligations without even further increasing fees). That proposed “Compact” has been put off, in budget language “deferred,” for two years. That means there is approximately $10 million in anticipated funding that will not be added to our budget for 2025-26. This represents a substantial new financial challenge for addressing the structural deficit.

As added uncertainty, we are aware of the federal government’s announcements to pause federal funding for various programs. The CSU is consulting with the California Attorney General and higher education partners across the country, and we are closely monitoring the situation for impacts to Cal State LA.

Understanding Our Deficit - A deficit is when expenses exceed revenue in a given fiscal year. This can be a temporary issue due to unexpected costs, lower-than-anticipated revenue, or one-time expenditures. A structural deficit, on the other hand, is a recurring imbalance in revenue and expenditures that happens every year. One is a temporary problem; the other is a big, ongoing problem that needs fixing.

Enrollment Trend - At Cal State LA, one factor contributing to the structural deficit is the 16% decline in student enrollment. In 2021, we had 27,032 students; since then that number has dropped to 22,740, which is a decline of 4,292 students. This drop in enrollment directly impacts revenue. Fewer students result in lower tuition income and less resources available to cover our operational costs.

State Underfunding - Although enrollment has a large impact on revenue and expense, our largest challenge is the increasing expenses with insufficient state support (underfunding from the State of California). Our largest expenses are the well-deserved increases in employee salaries and total compensation (which includes benefits like health insurance and retirement plans). Though compensation increases are important for recognizing the value of our faculty and staff, the $25 million needed to cover compensation is a substantial financial impact. To fulfill this obligation, the state has only committed $8 million in funding, leaving us an unfunded gap of $17 million.

Budget Balancing Approach - In discussions with the Cabinet, Deans, Department Chairs, and the Budget and Planning Committee, we have proposed the following approach to address the projected $24.6 million budget deficit for FY 2025-26. This reflects an across-the-board cut of 10%, with the actual dollar amount dependent on the proportional size of each division’s budget within the overall university budget.

Notes:
Budget reductions reflect 10% reductions in FY 2025-26 of divisional budgets with related benefits reduction at an estimated rate.

Guiding Principles and Budget Planning as We Face Further Cuts

We recognize the centrality of the academic enterprise for the university. As we consider ways to reducing our expenditures, we must maintain a high-quality educational experience for our students in a safe environment, while also looking for ways in which we can improve and diversify our revenue opportunities. Our focus and actions as we navigate further budget cuts will always be guided by our four core principles of Student Success and Enrollment, Health and Safety, Compliance, and Revenue Generation.

In response to our mounting financial challenges, we developed budget reduction strategies that were implemented during 2023-24 and will continue in 2024-25. Here are a few initiatives:

• Capital Projects and Prioritized Critical Infrastructure: We have deferred capital projects and prioritized critical infrastructure renewal projects to focus on the upkeep of campus infrastructure to ensure the health and safety of students, faculty, and staff.
• Reduce Travel and Hospitality: We have restricted non-essential travel funded through general fund operating resources. Travel will be reviewed and approved by vice presidents of individual areas. This does not apply to faculty professional development and RSCA activities.
• Non-essential purchases: We have restricted non-essential purchases, including equipment, hospitality, training, and software.
• Revenue Generation: We are seeking new opportunities to generate revenue by promoting and reengineering space rental, promoting business services and exploring public-private partnerships, and creating competitive degree and certificate programs.
• Budget and Planning Committee: We activated and engaged the new committee to ensure a higher level of shared governance as part of the process to help identify additional savings and revenue opportunities.

While the continuing hiring freeze and these added steps will assist in addressing the structural deficit, layoffs may be necessary.

There are difficult decisions ahead as we continue to navigate financial challenges. Yet, our commitment to student success, academic excellence, and a thriving campus community remains unwavering. Through strategic decisions, collaborations, and innovations, we are not just addressing the present—we are laying the foundation for a stronger, more sustainable future.

Together, we will emerge from this period with a renewed focus on efficiency, resilience, and opportunity. Thank you for your dedication and partnership in shaping the future of our university.

Sincerely,

Claudio Lindow
Interim Vice President and Chief Financial Officer 
Administration and Finance

Update: A Collaborative Budget Conversation

November 19, 2024

Dear Golden Eagles,

Previously, on October 30, I wrote about the need for a group that would function to bring many voices to the conversation as Cal State LA manages a deficit of $32.4 million this year, with a further anticipated budget reduction of $19.7 million next year, brought on by state cuts, unfunded compensation increases, and inflation. I am pleased to share that we are ready to form the Cal State LA Budget and Planning Committee. This newly formed administrative committee will help bring Inclusion, Transparency, and Collective Problem Solving to current and future budget planning for the University.

In the previous message, I also acknowledged the large undertaking for all involved. I shared my gratitude then and repeat that gratitude again today. Specifically, my thanks to the following whose names were advanced to me and have been appointed in consultation with the College Deans, Academic Senate, Associated Students, Inc., and staff representatives.

Representing Students

• Yahir Flores (ASI President)
• Alonso Villanueva Serrano (ASI Chief Financial Officer)

Representing Staff

• Gregorio Alcantar (Guardian Scholars Program)
• Sophia Shiau (University-Student Union)

Representing Academic Senate

• Andre Avramchuk (Senate Chair)
• Stefan Keslacy (Senate Member)

Representing the Colleges

• Kristiina Hackel (Arts and Letters)
• Maryam Tofighi (Business and Economics)
• Cheryl Kameil Hannan (Education)
• Eun-Young ‘Elaine’ Kang (Engineering, Computer Science, and Technology)
• May Fu (Ethnic Studies)
• Denise Herz (Health and Human Services)
• Kirsten Fisher (Natural and Social Sciences)
• Kimberly Franklin (University Library)

Representing Collective Bargaining Units

• Dennis Sotomayor (Teamsters)
• Kenneth. Castillo (California State University Employees Union)

Representing the Deans

• Carlos Rodriguez (University Library)

Finance Designee

• Carlos Beltran (Administration and Finance)

President’s Designee

• Nidavone ‘Nida’ Niravanh (Human Resources Management)

President’s Cabinet

• Robert Avalos (Vice President for University Advancement)
• Amy Bippus (Interim Provost and Vice President for Academic Affairs)
• Patrick Day (Vice President for Student Affairs and Enrollment Management)
• Claudio Lindow (Interim Vice President for Administration and Finance and Chief Financial officer)
• Victor Rojas (Chief of Staff)
• Anh Huynh-Nelson (Deputy Chief of Staff)
• Kristina Strottman (University Counsel)

I again thank all those who have taken on this responsibility. It is my hope that through this representation all in our Cal State LA community can find voice in the conversations ahead.

In collaboration,

Berenecea Johnson Eanes, Ph.D.

President

A Collaborative Budget Conversation

October 30, 2024

Dear Golden Eagle community,

One thing that distinguishes public universities from many other organizations is the principle of shared governance. Faculty rightfully see themselves as the caretakers of the academic mission. Staff rightfully see themselves as responsible for the work that keeps the university functioning. Managers at all levels of the university take great pride in facilitating the success of their teams. And students are the very heart of why we are all here.

In my 100 days of listening, I heard from many in our community about the experience of being muted or marginalized as well as those who felt shouted down by louder voices. I also heard about silos and the sense that some units are working against each other as opposed to together. This is set against a background of deep optimism and hope, a sense that we could all do better if we were speaking to find solutions rather than to assign blame.

The Cabinet and I are taking this input to heart. One of the most critical and contentious issues on any university is budget. Cal State LA is no exception. This year we are managing a deficit of $32.4 million brought on by state cuts, unfunded compensation increases, and inflation. Next year, should state budget cuts be enacted as planned, Cal State LA could face a cut of an additional $19.7 million. Combined, these are more than 20 percent of our budget. A 20 percent budget cut is not survivable without significant changes and a lot of tough decisions.

In the past, Cal State LA has utilized the Resource Allocation Advisory Committee to bring a variety of voices into the conversation. This group has not been called upon to help guide complex budget conversations in some years. Whether through reconstituting this committee or developing a new avenue for shared governance, I intend to engage with the Academic Senate, Associated Students, Inc., and our staff representatives to develop a robust and functional budget advisory group by the end of the calendar year.

The priorities for this group will be Inclusion, Transparency, and Collective Problem Solving to current and future budget planning for the University. Besides dealing with the immediate consequences of the state budget cuts, this group will also look at long-term strategies to address emerging enrollment patterns, changes in state budget support, and opportunities to develop partnerships, enhance philanthropy, and develop non-tuition, non-state sources of programmatic funding to increase revenue.

This will be a large undertaking for all involved, and my gratitude in advance to all who answer the call. In the meantime, I invite the entire campus community to visit the Financial Transparency Website, read the information provided on the current deficit and actions taken, and send in your own questions.

Shared governance is built on the premise that we have many expert voices to draw on in a university setting. We all bring expertise from our own roles within the university. We will bring our varied experiences forward to set Cal State LA on the best possible path for our shared future.

In collaboration,

Berenecea Johnson Eanes, Ph.D.

President

Hiring Freeze to Address Budget Deficit

September 23, 2024

Dear Campus Community,

As part of our continued efforts to navigate the current financial challenges facing our University, we are announcing the implementation of a hiring freeze effective immediately. This challenging but necessary step will help us better realign our resources that prioritize student success and campus operations while also remaining fiscally sound.

Below are key points and guidance regarding the hiring freeze:

What happens to searches currently underway? Ongoing hiring processes for positions will be paused immediately, except for those pre-approved by the Division Vice President.

How long will the freeze last? The hiring freeze will remain in place until further notice. We will reassess our financial position regularly and provide regular updates as conditions change.

How does this impact temporary or adjunct hiring? Temporary, adjunct, and part-time hires will be subject to the same scrutiny as full-time positions. Exceptions may be granted for critical academic or operational needs.

Will there be any exceptions to the freeze? Rare exceptions will be made for positions in critically under-resourced areas, with final approval by the President. Hiring managers will be provided with information about submitting positions for consideration.

How can we support each other during this time? We understand that this hiring freeze may create challenges for many departments. I am asking my team to review processes and offer guidance and support for ways we can reduce bureaucratic hurdles at various levels of administration. Limiting duplication of effort and “paper pushing” will allow all of us to better focus on our mission-centered work. We also encourage you to think creatively about how to work collaboratively, streamline processes, and maximize our existing resources.

The University will further commit to looking into ways we can build on successes in Advancement, Auxiliary Services, Sponsored Programs, and the College of Professional and Global Education (PaGE) – in addition to other programs not dependent on state support – to ensure we have a healthier mix of funding sources over the long term to uphold a vibrant campus.

Our primary focus remains the success and well-being of our students, faculty, and staff. We appreciate your patience, understanding, and commitment as we work through this period together.

Thank you,

Claudio Lindow
Interim Vice President and Chief Financial Officer 
Administration and Finance

The Budget and Enrollment

September 5, 2024

Dear Students, Faculty, and Staff,

As part of ongoing budget conversations, the Cabinet and I have been talking to many across the university about a $32.4 million structural deficit and the need to cut 12.4 percent in spending across all divisions.

Enrollment growth is frequently raised as an alternative to cuts. Without a doubt, growing our way out of the structural deficit sounds good. And growth can help, to a point. However, that will not be enough.

Below are answers to several frequently asked questions. These will be added to our FAQ at calstatela.edu/financial-transparency. We're also working on building project related costs, since we’ve received that question. I hope to have answers to provide on that soon.

We are committed to transparent communication about our budget while also enhancing our efforts to keep everyone informed and engaged in understanding our financial decisions and processes.

In that spirit, please keep asking questions.

Sincerely,

Claudio Lindow
Interim Vice President and Chief Financial Officer 
Administration and Finance

Can we grow our way out of the budget deficit?

No. However, growth will help to a point. The California State University (CSU) sets enrollment targets for Cal State LA. We get around six dollars from the state for every four dollars that comes from tuition.

Currently, the CSU is funding us for our full enrollment target. However, in calculating tuition revenue, the university is budgeting with the assumption of being 5.3 percent below target. We are striving to do better than that. For now, it looks like we could cut that shortfall in half.

If we continue current progress, then Cal State LA could receive another $4 million. This could help offset future reductions in state support that we are told by the CSU Chancellor’s Office to expect next year.

If we go above the target, Cal State LA might receive more tuition but gets no additional state funding. This becomes a self-defeating cycle, as more students are educated with fewer dollars on a per-person basis. This particularly hits hard for basic needs and other essential services outside the classroom.

How do we have an enrollment shortfall and course waitlists?

Cal State LA offers some 4,000 course sections in any given semester. Our waitlists this semester average less than one student per section. This is not unusual. In fact, our waitlist numbers this fall semester are lower than in the past.

There are many reasons waitlists exist. Students have preferences on time, format, and faculty teaching particular classes. Sometimes a student is enrolled in another class, but chooses to waitlist on a class at a time they prefer or with a faculty member they know. Another reason a waiting list may exist is that a student has an online class but prefers in person, or an in-person class but prefers online. Colleges try to schedule as best they can to meet student demand, and to balance General Education courses across departments, but it’s never perfect.

If we get a large enough group of students on a waitlist for a specific course, we may be able to open a new section. This can be challenging though, as you’ll never be able to have the exact time, format, and faculty as the class being waitlisted.

Are there fewer classes being offered this fall semester?

Yes. Cal State LA budgeted this semester with the assumption of being 5.3 percent below CSU enrollment target. As a result, we have 6.9 percent fewer sections compared to last year. We are focusing on student-centered course schedule that aligns with available resources. We are also working to align our enrollment with funded CSU system targets.

What is the impact of fewer courses on lecturer faculty?

Cal State LA is committed to following the Collective Bargaining Agreement (CBA) with the California Faculty Association in course assignments.

The university first assigns courses to tenured/tenure-track faculty followed by lecturers per the order of assignments in the CBA. Three-year full-time faculty have priority when it comes to offering courses followed by three-year part-time lecturers.

If there is additional work available, then the work is offered to full-time one-year lecturers followed by part-time lecturers staffing the remaining classes.

Welcome Back Golden Eagles

August 20, 2024

Dear Students, Faculty, and Staff,

Welcome to fall 2024! For those who have been with us all summer, I appreciate everything you’ve done to ready us for the year ahead. For those returning, I hope you had an amazing summer and am glad to see you back.

We’ve been busy this summer.

Budget Website

As promised, Cal State LA has launched a webpage to serve as our one-stop space for budget information. It is important that we are all informed when it comes to our resources. This is particularly true as we have conversations around solving a $32.4 million deficit while continuing to provide excellent education and services for students. This won’t be easy, but we are up to the task.

calstatela.edu/financial-transparency 

The page has a form for questions, and I hope you will join the conversation.

Leadership Transitions

While we’re on the topic of budget, I want to welcome a new member of the team. Claudio Lindow — a seasoned executive with over 25 years in higher education leadership — joined us as interim vice president of administration and finance and chief financial officer. I look forward to working with Claudio to address the opportunities we have in budget, business processes, facilities, operations support, and revenue generation.

We are also launching a national Provost search and will connect with Academic Senate, Associated Students, Inc., and our staff representatives on that recruitment and selection process. I continue to be grateful for the leadership of Interim Provost Amy Bippus, and she has committed to stay on with Cal State LA through the hiring process.

Building Updates

Good news on King Hall! After a summer of intensive work, independent testing shows air quality throughout King Hall meeting or exceeding the standards for occupancy set by the Environmental Protection Agency. There is still work being done to fully restore the building to its deserved place of pride, yet we can celebrate that immediate efforts for health and safety have been a success.

Thank you to everyone for your flexibility on Simpson Tower. Upgrade of the heating, air, and ventilation system continues. These are large complex systems, and unfortunately we got caught in delays. We hope to be back in the building mid-semester.

Similarly, the roofing and elevator modernization projects in Biological Sciences are still underway. Classes scheduled in Biological Sciences will be remote for the first week of instruction. We are working with the elevator company to get repairs completed this week.

Upcoming Events

Thank you to everyone who attended yesterday’s Convocation. It was wonderful to open the new academic year with the introduction of new faculty, and the announcement of the Outstanding Professor Awards, the Outstanding Lecturer Award, and the President’s Distinguished Professor Award. I was also glad to honor staff and students for their accomplishments. We have so much to celebrate.

Please save the date of October 2, 2024, from 2 p.m. to 4 p.m. for the Billie Jean King statue dedication. We are looking to celebrate a Cal State LA student-athlete alumna, advocate of gender equality, and a champion of social justice. She is truly one of the greatest, from her time on the tennis court through to her continuing work with national and global causes today.

Lastly, I commit to a new level of support for campus programs and events dedicated to Diversity, Equity, and Inclusion. We need opportunities to create spaces that acknowledge our diverse experiences while increasing discourse. Look for more of these activities throughout the year.

I am truly looking forward to the heights to which we will soar in the coming year.

Sincerely,

Berenecea Johnson Eanes, Ph.D.

President

Setting the Table for 2024-25 Budget Conversations

July 18, 2024

Dear Golden Eagle community,

 In my message of June 27, 2024, I stated that financial transparency and budget literacy are Cal State LA first principles. I believe we should be forthright and honest about our financial and budget information. This detailed memo is intended to prepare for our conversations in the fall with open and direct communication now.

What we rely on, primarily, to run all our classes, student support, and operations – with salaries and benefits making up 73 percent of overall costs – are two sources of revenue: tuition and allocation from the state budget. Cal State LA does not set either of these levels. The CSU Board of Trustees sets tuition, and we are given an enrollment target by the system. State allocations are negotiated between the California legislature and governor. This allocation is then given to the system, which assigns a portion to Cal State LA based on that earlier enrollment target.

Cal State LA has in recent years, enrolled students beyond the enrollment target number given to the university by the CSU Office of the Chancellor. The university does not receive budget from the state/system for enrollment over the target. The only revenue received is tuition from each “overenrolled” student. As a result, Cal State LA has historically absorbed these enrollment-related expenses (additional class sections, greater need for support, and related administrative processes) which has had an adverse impact on the experience we can provide students.

Post-pandemic, Cal State LA has been much closer to our enrollment target. This feels like a budget reduction, because of the lost tuition, even though our funding per student is up. The greater risk lies in falling below enrollment targets, losing both tuition and state/system support. This is why we need to focus on reversing enrollment declines and push to meet our enrollment target every year.

Based on estimated revenue alongside estimated salary, benefit, and mandatory costs, Cal State LA faces a 2024-25 deficit of more than $32.4 million. Making up this shortfall will be painful and will certainly have a negative impact in the short-term. A framework for balancing the budget is under consideration. I also remain committed to providing a website of detailed financial and budget information by the beginning of the 2024-25 Academic Year.

I do hope that next year will have better news for the future, particularly in the state budget picture. That said, we cannot bank on hope or deny the trends that are affecting higher education – which includes inflating prices and declining college-age populations. I also hear those who are concerned about ever-increasing workload, and I hear that those who work the hardest are being rewarded with more work. We need to consider the right scope of work for every person (within the hours and schedules provided under our contracts). That will include priority setting, and perhaps letting some things move to the back burner.

This is a tough conversation, and we are just at the beginning. At the same time, we’ll have to make some moves quickly to prevent even deeper cuts down the road. Still, I remain committed to the practice of shared governance and inclusivity. This is not something that any one unit, one department, or one division can navigate alone. We are in this together and must find our solutions together.

Click this link to read this memo with additional budget details. 

Sincerely,

Berenecea Johnson Eanes, Ph.D.

President