The State Board of Higher Education recently approved its 2009-2010 budget allocations to public campuses, but steep drops in state funding and looming ballot referendums have left college administrators worrying about their future revenue.
The University of Oregon received $64 million for the year. Normally, this would be roughly half of what the University would receive for the whole biennium, but several factors make this budget period anything but normal.
“There’s a lot of uncertainty out there,” University Vice President of Finance and Administration Francis Dyke said.
The largest uncertainty, what OUS spokesperson Di Saunders called “the big question,” is the pair of tax referendums that Oregon citizens will vote on this January in a special ballot.
The referendums seek to veto two bills signed by Gov. Ted Kulongoski in July that would raise state taxes on corporations, businesses and high-income individuals by a total of $733 million. If the referendums pass, it would nix a sizable chunk of revenue the OUS is expecting.
Kulongoski vetoed the legislature’s original budget for higher education, writing in a letter to Secretary of State Kate Brown that he was “deeply concerned that this provision would force the University system to raise tuition, which when combined with the underfunding of the Oregon Opportunity Grant program in the legislatively adopted budget, will operate to make higher education less accessible for many low-income and middle-income Oregonians.”
Saunders said Kulongoski’s veto effectively put $13 million back in the OUS’ coffers.
Meanwhile, the OUS is projecting enrollment to increase by 2.7 percent systemwide.
However, as a revenue source for universities, tuition is a limited resource. Tuition increases are capped by the OUS at an average 5 percent for smaller schools and 8 percent at larger schools.
Had the legislature’s original budget passed, Saunders said universities would have been forced to raise tuition by “probably 1 to 2 percent” more than they already have.
Referendums and vetoes aside, the approved 2009-2011 OUS operating budget is still 8.9 percent lower than the previous biennium. If federal stimulus money is excluded, the budget is 17.3 percent lower. Saunders said the OUS received $69.4 million total in federal stimulus money for the 2009-2011 period.
The State Board of Higher Education is also tweaking the methodology it uses to distribute funding among the seven state universities, which Dyke also said is a source of uncertainty.
Saunders said the board is working to make the budget distribution more equitable to the smaller universities.
The board moved $3.4 million out of its reserve fund to several of the smaller institutions, such as Eastern Oregon University. The board originally planned to move the funds from the budgets of the larger schools, but ultimately decided against it.
The board also approved a request by the University regarding the planned East Campus Residence Hall Project. The University has been cleared to seek approval from the state legislature to increase the spending limit on the bonds that will be used to pay for the new 400- to 450-bed residence hall.
Dyke said the bond limit was first set two legislative sessions ago, but since the University still did not have a firm idea of the cost of the hall, it was set at $1.
“We spent two years really working on this and planning and designing,” Dyke said, “and now we’re finally ready to go forward.”
Dyke said the University will request a bond limit of $75 million.
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