The University may see a 30-percent reduction in its state funding during the next two years, the Legislative Fiscal Office announced Monday, increasing tension between University administrators and the state and raising questions of whether the institution should move away from the state’s control and toward greater independence.
For students, the deficit will mean higher tuition. Oregon residents will see a 9.9 percent increase, and non-residents a 12 percent increase, during each of the next two school years, Vice President for Finance and Administration Frances Dyke said.
The proposed budget deficit is not final and will continue to be revised until the next fiscal year begins July 1. The administration knew the cuts were likely to be significant and the University has been preparing for months for this scenario, Provost Jim Bean said. The change will likely drop the University’s state contribution from 13 percent of its total funding to less than 10 percent, administrators said.
The Oregon University System has been preparing as well, because the new budget affects every institution.
“It is fair to say that the next two years will be the darkest times for students in the OUS institutions in their history,” ASUO President Sam Dotters-Katz said. He emphasized that the budget crisis creates a burden across the University and that some of the deficit will have to made up with tuition dollars.
However, Bean said faculty salaries make up 80 percent of the University’s budget, so some of the deficit will have to be made up there.
The proposed solution is to reduce the amount spent on salaries by 4.6 percent. However, Dyke said the University has several options for how to do that. Some of them involve voluntary pay reductions or layoffs.
Bean said he wants to avoid layoffs at all costs, and prefers furlough days. A furlough is an unpaid day off that is not specified in an employee’s contract.
While the budget deficit creates cuts and tuition increases in the short term, it could result in a long-term change in the relationship between the University and the state.
If the state’s contribution to the University’s budget does, in fact, drop below 10 percent, Bean said the University may start moving toward greater independence from the state of Oregon and its control.
He called the state “a 10 percent stakeholder making 100 percent of the rules.”
The University would never become fully private like Stanford, Bean said, because it would maintain its commitment to public education.
However, it is likely the University could look for an intermediate position. It would have greater flexibility in setting its tuition and policies while still maintaining a loyalty to Oregon and Oregon students.
Bean said many of the University’s peers, including the University of Michigan, University of Virginia and the University of Washington follow this kind of model when dealing with their states.
In a public forum Saturday, state representative Phil Barnhart (D-Eugene) addressed administrators and students and said the deficit is the result of poor fiscal policy on the part of the state.
“We have a revenue system that doesn’t pay the bills,” he said.
Students need to be engaged in the discussion about what happens to higher education funding, Barnhart said.
For now, the University must deal with the budget system in front of it. The school is known for working on a “bread and water” budget already, as incoming president Richard Lariviere has said.
Bean will send out a memo to faculty on Tuesday and hold a town hall meeting for anyone interested on Monday, April 13.
While the administration hopes the cuts don’t actually reach 30 percent, Barnhart isn’t equally optimistic. “I am very worried,” he said.
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