University officials will begin implementing their plan to balance the budget this year, using a combination of surcharges and budget reductions to avoid cuts to classes or faculty after the failure of Measure 28.
The plan, which was developed in collaboration with student leaders, will impose a $10 per credit surcharge for winter and spring terms to deal with a majority of the $6.1-million shortfall. The remaining $2.1-million void will be filled by “belt tightening” and by dipping into reserve funds. The University has already had to cut $7 million from its operating budget this academic year.
“Because we’re able to collect that $10 and because we have some reserves set aside, there will be belt tightening, but no cuts,” said Frances Dyke, associate vice president for budget and finance.
For the “belt tightening” side of the plan, departmental budgets will be affected in three major areas: non-classified staff salaries, travel expense accounts and supply accounts. Because the University uses a decentralized budgeting model, it is unclear how much of the shortfall will come out of each category.
Although non-classified staff salaries will not actually decrease, Dyke said the lack of money to fund salaries will impede the University’s progress in closing the “peer average” salary gap– which is a scale used to compare University salaries with those of other schools. Currently, the University is at 81 percent of the peer average. Prior to Measure 28’s failure, administrators had hoped to narrow that gap by increasing non-classified salaries a certain percent every year.
As for reductions in supply and travel, Dyke said it is uncertain exactly how staff will be affected, but departments will likely be spending less on supplies and travel in their academic programs. Travel expenses often pay for faculty members to attend conferences related to their field.
“When you’re talking about this much belt tightening, everyone is going to feel it,” Dyke said. “Departments are being very cautious.”
Despite the strain the surcharge will put on financially strapped students, some students will not be left in the cold. Anticipating the worst, the administration set aside about $500,000 to help offset the surcharge for the neediest students.
ASUO President Rachel Pilliod, who played a key role in involving students in the surcharge negotiations this year, said the decision for surcharges was weighed against a cut in class options. During the negotiations, student leaders fought for extensive student notification of the surcharge, delayed payment over two terms and no cuts in classes.
“It’s a budgeting process. It’s simple cost and affect,” she said. “The same mechanisms that the University is using to try and allocate money for its departments and to make sure that they aren’t under or over budget — students do the exact same thing with our own budgets to make sure that we can stay in school for the betterment of our education, our own lives, our families and our state.”
Oregon University System Chancellor Richard Jarvis said that while the surcharges are temporary, the problems facing higher education are only beginning — especially considering Gov. Ted Kulongoski’s budget projections showing little available revenue for higher education.
“The electorate has said they don’t want to contribute any more taxes,” he said. “I think it’s fair to anticipate that we’re going to come back with tuition increases in the fall.”
OUS officials already approved a supplemental surcharge in January to offset $9.1 million in legislative cuts, but University officials have not yet decided if they will institute the new surcharge. The University may decide to implement the fee, pending discussions and new financial projections, which will begin next week.
University students already paying the first surcharge of $10 could end up paying another $3 in spring term because of the OUS supplemental tuition surcharge. This new increase would bump total surcharges for spring term to $13, costing a student taking 13.5 credits about $175. Winter term would remain unaffected.
Former Gov. John Kitzhaber approved the reductions in November as part of across-the-board cuts aimed to help alleviate the statewide budget shortfall. The move was essentially unrelated to Measure 28, which had already been referred to voters.
“This is a reduction to our budget that has happened now and is permanent because the money is not there to pay the bills,” Jarvis said of the $3 surcharge. “It’s very troubling for all of us who’ve spent our careers in public education.”
Pilliod said ASUO officials have been very resistant to further surcharges and are pushing the administration for student input on the matter at the University level. She added that $3 may not seem like much, but to students who are already in dire financial straits, it could be a major problem.
“Let’s not forget the fact that this is coming on the heels of cutting the child care block grant on a statewide level completely; this comes on the heels of dramatically limiting the number of people who can apply for and receive the Oregon Opportunity Grant; this is coming on the heels of so many special sessions that have left us with a budgetary situation where we’re guaranteed a tuition increase next year,” she said. “For me, even at $10 for this term — an extra $120 — is money that I already don’t have.”