Oregon’s economy began slowing down last year, and according to a recently released state report, it will follow the U.S. economy on a continued downslide. However, it should only be slight and not reach the recession point the nation’s economy is facing.
Oregon’s Economic and Revenue Forecast poses the question of “how long and how deep” the U.S. economy will move toward a recession, but state forecasters believe Oregon will see an upswing by the middle of 2009.
A slowing economy could be bad for Oregon’s universities if the state does not recover before the 2009 legislative session, which convenes in January. During the legislative session lawmakers decide how much money is available for state institutions, including those in the Oregon University System.
The University depends on state revenues because it is a state institution, said Tim Duy, an economics professor. The University desires a positive budget outlook because “what is good for the University is good for students,” he added.
By the numbers
| ? Job growth increased 0.9 percent in the first quarter of 2008, which is much slower that the average pace of 2.7 percent from 2004 to 2006. ?Job growth is forecasted to be 0.6 percent in 2008 and 0.7 percent in 2009. ?Education and health services jobs will grow 3.9 percent in 2008. ?18-24 year-old population will grow at an average of 0.3 percent annually, lower than the average rate of 1.1 percent between 2000 and 2007. ?$13,016.7 million – Oregon general fund revenues for the 2007-09 biennium, an increase of $91.2 million from the March 2008 forecast. ? $143 million – ending balance for the 2007-09 biennium, $114.2 million above the March 2008 forecast. Source: Office of Economic Analysis, economic forecast |
One of the worst recessions in recent memory came in 2001 when some Oregon universities raised tuition, said Di Saunders, spokeswoman for OUS. In some cases schools were forced to implement tuition surcharges on tuition rates that had already been increased, she said.
Because of the slowing economy, University administrators have also held back the next year of benefit and salary increases for faculty, said Frances Dyke, vice president of finance and administration at the University.
Dyke said the University is waiting to see if the state releases a $5.2 million compensation package that was promised to the University. If the package is released, then the University should release the second year of increases, which keeps the University in a competitive salary bracket. If it is not released, then Dyke said administrators will have to meet to decide what their options are.
Energy costs are also rising, according to the report. Those increased costs could be passed to students living on campus or using facilities such as the Student Recreation Center in the 2009-10 school year, Dyke said.
A positive note for University students is the decreased young adult population growth. The growth rate for 18- to 24-year-olds has slowed to the point where it eases pressure on public spending on college education, according to the report.
Oregon has followed the U.S. business cycle since WWII, but a better job growth rate than the national average and federal stimulus checks are the factors analysts say will keep Oregon from being dragged down with the nation.
The slow growth of the economy was blamed on a number of factors, ranging from loss of $282 million in federal timber dollars to the fall of the U.S. dollar and the risk of wars. But the slumping housing market, rising gas prices and the increasing credit crunch are listed as the biggest weights on the economy.
