Assembly Budget Subcommittee No. 3 on Education Finance heard Wednesday that California’s public higher education systems face multibillion‑dollar facility backlogs and uncertain, uneven funding mechanisms as lawmakers weigh whether to ask voters to approve a statewide higher‑education bond.

The Legislative Analyst’s Office told the panel its 2025 report shows campus square footage has grown substantially but that many academic and administrative buildings are aging; the LAO recommended the state and systems improve data collection on capital renewal spending and develop long‑term plans to prevent backlogs from growing. "Without these plans, it's very likely that these capital renewal backlogs will further grow," LAO analyst Jennifer Pacella told the committee.

The recommendation matters because system leaders said they cannot meet renewal, seismic and program needs at current funding levels. "We haven't had a general obligation bond in nearly 20 years," Nathan Brostrom, chief financial officer for the University of California, said in testimony. Brostrom told the subcommittee UC documents a $8.5 billion deferred‑maintenance total and roughly $13 billion in seismic renovation needs; UC’s five‑year capital financial plan lists more than $30 billion in projects, including about $12 billion for medical centers and $10 billion for student housing.

Paul Gano, assistant vice chancellor for capital planning at the California State University, said CSU’s five‑year plan identifies about $31 billion in project needs with more than $8 billion in deferred maintenance. "A consistent multi‑year funding plan is essential to addressing CSU's capital needs effectively," he said, describing a shift since 2014 when responsibility for capital funding moved largely to CSU rather than being delivered from state bonds.

Chris Ferguson, executive vice chancellor of the California Community Colleges, told the panel the system’s five‑year capital outlay plan shows roughly $33.5 billion in unmet facilities needs and a high share of aging buildings: "More than 57% of our facilities are over 25 years old," he said, citing modernization and career technical education priorities.

Members pressed officials on how much of the listed needs are shovel‑ready, the meaning of facility utilization rates and debt limits. The LAO and system officials said utilization metrics vary by segment and that some large legacy lecture halls are less used than they once were because of enrollment shifts and online course options. Brostrom testified UC’s total outstanding debt has grown to about $34 billion, much of it tied to medical centers and housing; he said roughly $665 million in annual state‑related debt service is reflected in UC’s state appropriation.

Panelists also discussed financing tools. CSU and UC representatives said lease revenue bonds and campus‑issued university bonds have been used but do not replicate the scale and predictability of a voter‑approved general obligation bond. The LAO and system officials urged better, more granular reporting of capital renewal spending by fund source so the Legislature can accurately measure gaps and set realistic funding targets.

Lawmakers repeatedly cited rising construction costs and recent tariffs as complicating factors for future bond proposals and project delivery. Brostrom said some major UC hospital projects now face per‑bed cost estimates that reflect escalating material and labor prices.

The subcommittee left the record open and indicated further work with the LAO and systems to refine data, prioritization and bonding options ahead of the May revise and potential 2026 bond planning.

This account is based on presentations and exchanges between the LAO and representatives of UC, CSU and the California Community Colleges during the Aug. 4, 2024 Budget Subcommittee No. 3 hearing.