Campus News
Campus releases second quarter financial summary, with updates on state, federal budgets
I write to share details about our second quarter financial summary, the state budget proposed by Gov. Gavin Newsom, and the federal funding package approved in February.
Dear Campus Community,
To keep the UC Santa Cruz community informed about our multiyear effort to balance our core funds budget and thoughtfully invest in our long-term success, I write to share details about our second quarter financial summary, the state budget proposed by Gov. Gavin Newsom, and the federal funding package approved in February.
Quarterly budget summary
For fiscal year 2025-26, UC Santa Cruz is operating a $1.03 billion budget that includes a projected $79 million core funds deficit.
The projections in the fiscal year 2025-26 Q2 Core Funds Summary show the campus making progress toward reducing the structural deficit in core funds. Current projections show the Core Funds deficit to be in the range that we had previously projected for this fiscal year, though changes in state or federal funding could impact revenues and changes in expenditure patterns could affect the campus budget. We must all continue to be mindful of our limited resources and, wherever possible, reduce discretionary expenses to ensure we make our needed budget targets.
Working together with a clear plan, we are making meaningful progress despite challenges. Our core strengths will sustain us as we pursue growth opportunities to position ourselves strategically for long-term success. A few of these opportunities include thoughtfully increasing enrollment with new student housing opening, pursuing targeted research initiatives, and increasing philanthropic support. We deeply appreciate everyone’s continued partnership.
Governor releases state budget proposal
California Gov. Gavin Newsom released a proposed state budget in early January that includes $5.2 billion in general fund support for the University of California. This proposal includes a 7% base budget increase for the UC system—an increase of $350.6 million—in addition to a 3% restoration of $129.7 million.
The budget proposal also includes increases to the Cal Grant program and decreases to the Middle Class Scholarship. The proposed budget includes no new funding for capital projects, such as buildings or other infrastructure. Legislators are reviewing the governor’s proposal and will soon begin developing their own budget plans.
UC President James B. Milliken released a statement thanking the governor and legislators for their steadfast support of UC and providing the system with resources to deliver its mission of educating California students and conducting research that serves the public.
While we, too, are deeply appreciative of the state’s continued support for higher education, as a campus we need to remain focused on both increasing our campus revenue and reducing spending to achieve a sustainable financial path in core funds.
Our current budget planning assumptions included a 8.1 percent increase in state funding for the 2026-27 fiscal year, and even with additional state support, the campus will need to continue to meet reduction targets set by the Budget Advisory Committee.
Federal budget invests in research, financial aid
UC Santa Cruz leaders, in collaboration with colleagues across higher education, continue to advocate for the importance of a strong federal partnership to ensure that the United States remains at the forefront of innovation and discovery, while also investing in a skilled and creative workforce.
We are grateful that Congress approved a spending package in early February that maintained funding for the National Institutes of Health and the Department of Energy Office of Science and avoided large proposed cuts to funding for the National Science Foundation, NASA Science, and basic research at the Department of Defense. The spending package also maintained the federal government’s current approach to funding indirect costs associated with performing research. Additionally, we appreciate that the federal government continues to provide important support for students especially through the Pell Grant program, which supports millions of low- and middle-income students in pursuing higher education.
Despite the complexities of the current budget landscape, our commitment remains steadfast: providing a world-class education and conducting research that serves the public good. We will continue to work with the campus community to manage our current budget situation such that we come out stronger and better prepared for the future.
Sincerely,
Ed
Ed Reiskin
Chief Financial Officer
Vice Chancellor for Finance, Operations and Administration