Three Bay Area universities consider merging operations amid budget cuts

OAKLAND, Calif. - Three of the Bay Area's five California State University campuses are considering merging some administrative services in an effort to cut costs in the face of budget crises.

The proposal, called the San Francisco Bay Region Network, would combine certain operational services — finance, administration, human resources, IT security and construction — at Sonoma State University, San Francisco State University and Cal State East Bay. Mildred Garcia, the chancellor of the California State University system, announced the proposal at a meeting of the Board of Trustees in Long Beach on Tuesday.

Money problems

By the numbers:

The proposal comes ahead of an anticipated $375 million budget cut in California Gov. Gavin Newsom's state budget for the 2025-2026 fiscal year. 

"The state's fiscal challenges are real. The legislature and administration will have to make difficult choices to balance the budget," Garcia said. "We must continue to prepare for contingencies, all of them."

Garcia said she was "cautiously optimistic" about navigating the proposed budget, a feeling she said was bolstered by the 61 state legislators who earlier this month signed a budget request rejecting the proposed cuts to the CSU system.

Compounding the urgency, each of the schools is facing its own budget shortcomings. 

Sonoma State is anticipating a $23.9 million budget deficit, while Cal State East Bay is projecting a $20 million shortfall, and San Francisco State expects to be at least $33 million shy of the projected costs of the next academic school year.

Sonoma State has resorted to several cost-cutting measures including laying off faculty members, ending its entire sports program and cutting six academic programs as well as 20 degree programs, which Garcia described as "painful but necessary." 

The school has been without a permanent president since Mike Lee was placed on administrative leave, and later retired last May after sending a school-wide email in which he made promises to pro-Palestinian student protesters without proper approval. 

Garcia announced on Tuesday that the search for his replacement will resume this fall.

Looking ahead

Big picture view:

Garcia said that in addition to California's financial woes, declining birth rates and rates of high school graduation are expected to lead to lower college enrollment rates through 2040 at least. She said she expects the three Bay Area schools will experience those demographic changes the most acutely.

"Sonoma State has long struggled with declining enrollment, brought on in large part by a significant demographic shift… with declining birth rates and a reduced number of high school graduates projected to negatively impact the pool of college-going students through 2040 and beyond," Garcia said. "This shift is unlikely to change, and will increasingly diminish the impact of improvements in marketing, recruitment, admissions, and outreach to new segments of the population. The fact is that significantly smaller and decreasing populations will be available to attend these three universities for the foreseeable future."

A campus-wide message from San Francisco State University President Lynn Mahoney posted on Tuesday states the universities may consider merging other operations including library services, financial aid, admissions, records, and other enrollment services. Her message stressed that there is no thought being given to merging the schools — that all three universities will continue to operate as independently accredited universities.