UC Santa Cruz — at every level — has been reeling from a structural budget deficit. The effects trickle down to students in many aspects of their education, including larger class sizes and less accessible campus services.

Despite significant effects beginning to materialize, many community members remain in the dark on the specifics of the deficit and its impact.

As City on a Hill Press investigates the implications of the budget deficit on the UCSC campus, we sought to create a cohesive breakdown for community members to reference.

What is a Budget Deficit?

For universities, a structural budget deficit occurs when the costs to operate the university exceeds all the money that the university brings in. Simply put, UCSC is spending more than they’re making.

UCSC is expected to be $81 million short in core funds for 2025 — down from $111 million after the university implemented $30 million in spending cuts.

Here are the core funds that UCSC brought in and what it spent in 2024-25:

Source: The University Budget Fiscal Year 2024- 25. These numbers were gathered from the core funds breakdown of the Operational Budget. These do not include funds labeled “non-core.”

Where Do Core Funds Come From?

Student Fees – 5% – These are primarily set by the UC Regents but can also be instituted by student vote.

Tuition and Supplemental Tuition – 37% – Tuition is the base amount of money that students pay to attend the university, supplemental tuition is additional dollars paid by out-of-state and international students.

State Funds – 49% – Education funding from the California State Legislature is sent to the UCSC campus. These are public dollars from state taxes.

Additional money from grants, interest earnings and $2.3 million from the California State Lottery, are allocated to core funds as well, but make up less than 9 percent of core funds.

Core funds are used for:

  • Payroll – Professors, lecturers, teaching assistants and administrative employees are paid using core funds.
  • Student Services – Advising, tutoring, disability and counseling resources are examples of student services.
  • Infrastructure – Core funds are used to maintain operating electrical, water and internet services.

Why is This Happening at UCSC?

UCSC cites that, “the current structural deficit in core funds began in 2020 as the campus worked to protect jobs during the pandemic.”

Fifty-five percent of the operational budget of the university comes from core funds, which can change year-to-year based on factors such as:

  • State funds that are influenced by shifting priorities of the California government.
  • Tuition and student fees that change yearly alongside enrollment.
  • Federal grants that are used for specific resources, and face dissolution under a presidential administration that continues to undermine federal research contributions.

In other words, UCSC’s heavy dependence on these fluctuating sources of income has made it vulnerable to the problems it experiences now. Not all UC schools are in the same situation. UCLA derives only 22 percent of its budget from core funds and does not face the same financial insecurity as UCSC, largely because it has more varied income sources such as medical centers.

How Has Budget Management Been Criticized?

The Persian and German language programs have been cut and a reduced number of writing tutors mean less support for students in required entry-level courses. Layoffs have also begun in various campus departments, such as Tech Services.

Students, faculty and community members have criticized the administration’s handling of expenses like these, claiming the cuts prioritize saving money over quality education.

The implementation of the Fresh Academic Instructional Resources (AIR) model has also centralized budget control into the hands of higher administration rather than department deans.

In interviews with City on a Hill Press, department chairs expressed frustration with this reorganization, saying that it allows administrators to cut programs to save money instead of prioritizing student experience.

This sentiment was compounded by a perceived lack of transparency surrounding the budget. It’s not made clear where money is spent, and who exactly makes those decisions.

“We’ve never had a transparent budget on our campus, ever,” a faculty source said. “We’re a public university, but I have never been able to find answers to any single budget question that I’ve had in 20 years.”

What Should You Expect Going Forward?

A budget deficit of this size will have significant implications on the student experience. State funding cuts amounting to $16.6 million will slash campus revenue further for 2026. Looking forward, increasingly diminished student services will almost certainly persist.