While making the rounds at Eugene radio stations and newspapers last week, Oregon Speaker of the House Dave Hunt responded to the weighty new bond proposal unveiled by University President Richard Lariviere.
In response to the news that the president had put forth an aggressive funding proposal that would alter the University’s relationship with the state, Hunt reiterated that he appreciated the aim of Lariviere’s proposal, but that he was hesitant to support the idea.
Lariviere unveiled the proposal last week in a white paper called “Preserving Our Mission Through a New Partnership with the State.” The document puts forth a new funding model that requests, up front, 30 years’ worth of the approximately $65 million currently allotted yearly to the University by the state to finance general obligation bonds worth about $800 million. This “public endowment” would then be matched, dollar for dollar, by private donors, giving the University upwards of $1.6 billion to work with for the next three decades.
According to the proposal, both parties could benefit from the financial partnership: The state’s annual $65 million it now provides the University would become a fixed rate, and the University would become less susceptible to the volatility of state budget cycles.
Lariviere’s white paper called attention to the fact that Oregon’s current funding model isn’t sustainable and compared Oregon’s higher education situation to those in other states and countries.
“Among the states, Oregon is at the bottom of the barrel, ranking last in many of the important criteria … that portend Oregon’s future educational capacity and economic strength,” Lariviere wrote. “The natural cycles of state economic growth and retrenchment have created a volatile and unpredictable funding and tuition environment for Oregon’s public higher education institutions and their students over the last twenty years, and Oregon will continue to experience revenue volatility because of its dependence on income tax revenue.”
University spokesperson Phil Weiler said he thought Lariviere’s proposal could become a national model for colleges across the country suffering from dwindling public financing.
“It’s an audacious kind of a plan, but the argument could be made that the status quo has not been working for many decades now, and it’s time for something new,” Weiler said.
State legislators have expressed skepticism of the plan. Hunt said the scope of the proposal is too narrow for the state to make such a significant financial commitment up front.
“(Lariviere) wants greater stability just for the University, not for the whole university system, not for all of higher ed, not for all of education, not for all state services — just for the University,” Hunt said. “So that’s where it becomes problematic; it would basically involve the state using most, or all, of its bonding authority in order to create a one-time pot of money that would then go to the University.”
Hunt said the Legislature is aware of the need to reinvest in higher education in order to keep Oregon’s workforce competitive. He said some steps had been taken to this end, such as doubling funding for the Oregon Opportunity Grant, a need-based grant for college students; setting up a rainy day fund in 2007, which Hunt said stemmed education budget cuts during the 2009 recession; and implementing measures 66 and 67, both of which allotted more state revenue for higher education.
Weiler said supporters of the bond proposal want to start a conversation with people in the state and that the gubernatorial candidates in both parties had been approached to garner support for the idea. He said the proposal would most likely be introduced to the legislature in 2011.
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