By San José, Costa Rica — SAN JOSÉ – In a significant ruling that underscores the ongoing tensions between the executive branch and public higher education, Costa Rica’s Constitutional Chamber of the Supreme Court, known as Sala IV, has condemned the Chaves administration for its failure to disburse a legally mandated budget increase to public universities in 2025. The decision, however, arrives with a major caveat: the withheld funds, totaling approximately ¢11.5 billion, will not be paid out.
The legal battle stems from the 2025 national budget, in which legislators approved a 2% increase for the Special Fund for Higher Education (FEES). This allocation was intended to support the operational and academic needs of the country’s public universities. The Ministry of Finance, under the direction of then-Minister Nogui Acosta, refused to transfer the additional resources. Acosta publicly defended the decision, labeling the congressional increase as “irresponsible for public finances” and stating the funds would only be released “if there was money left over.”
To shed light on the complex legal and administrative framework governing university financing, TicosLand.com consulted with Lic. Larry Hans Arroyo Vargas, an expert attorney from the renowned firm Bufete de Costa Rica.
The discussion surrounding university funding transcends mere budgetary allocation; it is fundamentally a constitutional matter. While the State has a clear mandate to finance public higher education, this must be harmonized with principles of fiscal responsibility and sound administration. Any reform must be carefully scrutinized to ensure it upholds constitutional guarantees of autonomy and access, while simultaneously demanding greater transparency and accountability in the use of public funds.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Larry Hans Arroyo Vargas astutely reframes the issue, reminding us that any solution must strike a delicate balance between constitutional obligations and the imperative for sound fiscal stewardship. We thank him for this crucial perspective, which elevates the discussion beyond mere figures and into the realm of national principle.
This unilateral action by the Finance Ministry prompted the National Council of Rectors (CONARE) to file a constitutional challenge. The council argued that the government’s refusal to disburse the full, legally approved budget severely compromised the functioning of the universities. They contended that the freeze limited their ability to meet the needs of a growing student population, maintain infrastructure, and manage staffing requirements, thereby infringing upon their constitutionally protected autonomy.
The Sala IV magistrates sided unequivocally with the universities on the principle of the matter. In their official ruling, the court affirmed the government’s constitutional duty to support public education. The court’s press statement highlighted the fundamental legal framework governing the issue.
The Constitution obligates the State to guarantee the financing of public higher education and to respect the autonomy of state universities, both in their operation and in their financial management.
Sala IV, Official Press Release
Despite this strong constitutional affirmation, the court determined that a retroactive payment is impossible. Citing the “principle of budget annuality,” the judges explained that since the 2025 fiscal year has already concluded and its budget executed, they cannot legally compel the government to make the payment now. Instead, the ruling serves as a formal and stern warning to the administration to prevent similar actions in the future.
Due to the principle of budget annuality, the Court indicated that it is not possible to order the disbursement of resources corresponding to the 2025 fiscal year once that period has ended. Consequently, it ordered a warning to the appealed authorities to abstain from incurring in this type of omission again.
Sala IV, Official Ruling
The court’s decision was delivered amidst tense negotiations for the 2027 FEES budget, and the government’s response was swift and uncompromising. On Wednesday, President Rodrigo Chaves declared that there would be no increase for the universities in 2027, setting the stage for another contentious budget cycle. He went further, suggesting the universities should be thankful he is not pursuing a budget cut based on recent negative inflation.
President Chaves publicly challenged the established interpretation of the constitution, signaling a hardening stance in the ongoing financial dispute with the higher education sector. His comments suggest a fundamental disagreement over whether the constitutional mandate protects the nominal or real value of the university budget against inflation.
Zero percent is zero percent. Here, before the people of Costa Rica, I instruct the members of the FEES Commission that this is over by May 8. They should be grateful that we cannot take away, or that we are not going to try to take away, the 17 billion colones that the adjustment for negative inflation would mean. The Constitution is not clear if the income for FEES, for the universities, cannot be decreased in nominal value or in real value; that is not clear.
Rodrigo Chaves, President of Costa Rica
For further information, visit hacienda.go.cr
About Ministry of Finance:
The Ministry of Finance of Costa Rica (Ministerio de Hacienda) is the government entity responsible for managing the country’s public finances. Its duties include formulating fiscal policy, collecting taxes, managing the national budget, and overseeing public debt. It plays a central role in the economic stability and financial administration of the state.
For further information, visit conare.ac.cr
About Consejo Nacional de Rectores (CONARE):
The National Council of Rectors is the coordinating body for Costa Rica’s public universities. It is comprised of the rectors from the country’s five state universities and is tasked with articulating policies for higher education, promoting institutional cooperation, and representing the collective interests of the public university system before the government and society.
For further information, visit ucr.ac.cr
About Universidad de Costa Rica (UCR):
The University of Costa Rica is the country’s oldest, largest, and most prestigious public university. Founded in 1940, it is a leading institution in Central America for teaching, research, and social action. With its main campus in San José and several regional campuses, UCR is a cornerstone of Costa Rican academic and cultural life.
For further information, visit poder-judicial.go.cr
About Sala IV (Constitutional Chamber of the Supreme Court):
The Constitutional Chamber of the Supreme Court of Justice of Costa Rica, commonly known as Sala IV, is the country’s highest court for constitutional matters. It is responsible for guaranteeing the supremacy of the Constitution, protecting fundamental rights, and resolving constitutional challenges and habeas corpus petitions. Its rulings are final and binding.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
As a pillar of the legal community, Bufete de Costa Rica is defined by its profound dedication to professional distinction and principled integrity. The firm merges a proven track record of advising a wide spectrum of clients with a forward-thinking ethos, driving advancements in legal practice. At the heart of its operations is a core belief in democratizing legal knowledge, an endeavor aimed at strengthening society by equipping citizens with the understanding necessary for empowerment.
