A budget deficit happens when expenses exceed revenues. Our deficit is primarily due to:

• Reduced state support and tuition revenue due to enrollment declines
• High inflation (increases in mandatory costs we must pay no matter what)
• Reductions to our state allocation from the Chancellor's Office
• Reductions to our state allocation from the State of California

For Fiscal Year 2025–26, Cal State East Bay’s projected budget deficit is $13.1 million.

These figures reflect the base structural deficit, meaning the gap between ongoing revenues and ongoing expenses—not one-time costs. The university continues to explore permanent reductions and sustainable strategies to address this gap.

The strategies in place so far to cover the deficit for FY 2025-26 include:

• Expected reduction of savings
• Projected decrease in open positions / hiring chill savings
• Projected SFBRN savings
• Projected benefit savings from open positions/SFBRN
• Use of reserves

For Fiscal Year 2024–25, Cal State East Bay’s projected budget deficit began at $14 million, but after reductions and savings, the updated permanent deficit decreased to $9.7 million.

These figures reflect the base structural deficit, meaning the gap between ongoing revenues and ongoing expenses—not one-time costs. The university continues to explore permanent reductions and sustainable strategies to address this gap.

Some reserves may be used to soften the impact in the short term, but reserves are limited and often earmarked for specific purposes. Using them as a long-term solution would be unsustainable.

The university has used various methods to close $24 million in permanent base reductions over the past 3 years:

2022-23: Elimination of open positions in Academic Affairs, Administration and Finance and Student Affairs

2023-24: Permanent reductions to all Divisions based on share of marginal cost and aligning course sections offered with enrollment

2024-25: Voluntary Separation Incentive Program (VSIP), elimination of 11 MPP positions from operating budget, elimination of a sports team, decommissioning of Robinson Hall, aligning course sections offered with enrollment, and central reductions related to benefits savings.

In recent years, Cal State East Bay has taken steps to address budget challenges through cost-saving efforts such as eliminating some management positions, reorganizing operations, and consolidating academic programs. These actions have been guided by a commitment to protect student success and involve shared governance in decision-making. Any future decisions will be made thoughtfully, in alignment with university priorities and with input from relevant stakeholders, while keeping student success at the center. We will continue to attempt to handle any necessary workforce reductions through eliminating unfilled positions, contract non-renewals, or through natural attrition.

In 2024–25, the university conducted a Focused Program Review (FPR) to evaluate academic programs with persistently low enrollment, following the Chancellor’s directive in AY2023-24. This process, developed with the Academic Senate and informed by faculty input, aimed to reduce curricular complexity, improve the student experience, and align academic offerings with current demand. Many departments voluntarily chose to discontinue or consolidate programs, which helped inform the final decisions.