The economic stimulus package passed by the U.S. House of Representatives on Wednesday allocates $66.9 million for higher education in Oregon and could help the University’s overall economic situation.
The $66.9 million designated for higher education agencies would be given as subgrants to universities and colleges “based on the demonstrated need of each institution for facility modernization, renovation and repair,” according to a report from the Center on Budget and Policy Priorities.
University Provost Jim Bean said recently he expects “a significant reduction in revenue” when the state releases its next budget forecast Feb. 20. Bean said the stimulus money would arrive three days later.
The stimulus package allocates $305.1 million to a state fiscal stabilization fund, according to the report from the CBPP. That money is intended to lighten the burden on the state budget, which has already forced the Oregon Student Assistance Commission to reduce its Oregon Opportunity Grant fund.
Economics professor Mark Thoma said the package devotes money to the Pell Grant program that assists low-income students. It also provides for tuition tax credits, he said, which are intended to keep the path to higher education open for low-income students who may have been affected by Oregon’s high unemployment rate.
Thoma said the money for grants and tax credits is needed in Oregon in light of the reduction in OSAC scholarships and the public’s fear that private universities, whose endowments have been significantly reduced, may shrink their scholarship funds as a result.
Tim Duy, University economics professor, said President Barack Obama’s stimulus package gives money to more than just higher education and the state. It provides money for K-12 school districts, Medicare and state infrastructure, which Gov. Ted Kulongoski touted in a release after the bill’s passage.
“The $175 million investment in public works projects will create jobs, improve transportation infrastructure and address years of deferred maintenance on aging buildings across Oregon,” Kulongoski said.
Duy said he and other economists aren’t impressed with the tax cuts included in the plan. “We don’t think tax cuts are a very effective stimulus issue,” Duy said. He said the more effective strategy is to give money to agencies and people that are guaranteed to use it directly and immediately.
Duy said it is possible the stimulus package will not help the economy right away. The current economic problems could be structural, he said, and if they are, it is hard to tell how long they will take to fix and how much money could trickle down to the University.
In spite of the economic turmoil, Thoma said the University is in a better position than it could be. Higher education is counter-cyclical with the economy, meaning that when the economy is in decline, universities do well because people go back to school, he said.
In addition, Thoma said the University has cut its dependence on state funds and finances itself in great part with its own tuition-generated money. He said this management of the University’s financial structure should help it remain stable in the precarious Oregon economy, even without a stimulus package.
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