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To: Faculty and Staff
November 21, 2025
Campus Community,
As part of the University of California system, we are proud to contribute to a long legacy of excellence in public education, research, and innovation. In President Milliken’s opening remarks at the UC Regents Meeting held at UCLA this week, he reaffirmed the unique strengths of the University of California while acknowledging the fiscal challenges ahead, including rising operational costs and potential reductions in federal and state funding. His message underscores the seriousness of the financial pressures facing the University of California and the importance of proactive planning across all UC campuses.
With this context, we, with our fellow vice chancellors, have developed and recommended, and the Chancellor approved, a multi-year Financial Stabilization Plan to address a lingering structural deficit and ensure the university’s long-term financial health and sustainability. Our goal is to align permanent revenue sources with growing mandatory expenditures while preserving the core academic and research missions that define our campus, guided by our values as a student-centered research university.
This fiscal planning maturity comes at a time when higher education institutions across the country are navigating a convergence of challenges - managing volatile funding sources, sustaining workforce capacity, and responding to rising operational costs. Colleges and universities throughout the nation are rethinking how they operate, plan, and sustain their missions. UC Merced is no exception, and we are committed to meeting this moment with clarity, collaboration, and care.
FY26 Budget Planning Outcome
In November 2024, each division developed and implemented a strategy to reduce its core budget (state allocation and tuition funds) by 5% for fiscal year 2026 (July 2025–June 2026). These plans were reviewed and approved by the Chancellor and are now in effect.
This milestone was achieved through collaboration, transparency, and a shared commitment to preserving our teaching, research, and public service mission. We are grateful for the thoughtful planning and collegiality that made this possible.
Financial Stabilization Plan
The goal of the multi-year Financial Stabilization Plan is to provide fiscal planning predictability and long-term sustainability amid continued enrollment and funding pressures. Census enrollment declined by 143 students, and state and federal uncertainties persist. These realities necessitate cautionary budget strategies. Should our financial condition improve, either through increased enrollment or improved budget conditions, we are committed to revisiting future year targets (FY28 and FY29). We recognize that these multi-year budget reductions will be challenging, and we deeply appreciate your resilience and partnership as we work toward a more abundant future.
The multi-year campus Financial Stabilization Plan will be implemented over the next three years, beginning with budget reductions of 7% in fiscal year 2027 (FY27), followed by a 5% reduction in FY28 and 3% in FY29. The reductions implemented in each division will be determined through the same consultative process used last year, guided by our focus on prioritizing student success and the UC’s mission of excellence in research, teaching, and public service.
Moving Forward Together
As we enter FY27 budget planning, we ask for your continued engagement, creativity, resilience, and support.
We encourage all members of the campus community to stay informed and involved through their respective managers, supervisors and vice chancellors:
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Stay up-to-date with budget planning updates by visiting the Financial Stabilization website. This site provides an overview of budget adjustment context and planning. Additionally, this page includes frequently asked questions, organized by theme, and will be updated regularly.
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Join the upcoming Financial Transparency Town Hall webinar, hosted by the Division of Finance and Administration, on Tuesday, Dec. 2 at 2 p.m. via Zoom.
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Submit Questions or Feedback via Ask DFA.
Together, we will continue to navigate and surmount these challenges with transparency, collegiality, compassion, and perseverance.
Elizabeth R. Dumont
Executive Vice Chancellor and Provost
Kurt Schnier
Vice Chancellor for Planning and Budget and Chief Financial Officer
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