As negotiations between the University of Oregon administration and United Academics begin to focus more heavily on financial matters, the university spent a significant amount of the April 10 bargaining session providing an overview of the state of the UO budget.
Jamie Moffitt, chief financial officer and vice president for finance and administration, walked the sides through historic information, the current budget and cost drivers affecting the FY16 budget. The full presentation is available here.
“The reality is that our current budget and the FY16 budget are extremely tight,” Moffitt said. “While there are many unknowns associated with next year’s budget, we do know that a number of major cost drivers will be increasing. This presents a significant challenge for us.”
Among the unknowns are increases to health-care costs and salary negotiations with United Academics and the Service Employees International Union. One of the large labor costs for the university – retirement benefits – are projected to increase by 9 percent next year.
“Salaries and benefits make up roughly 80 percent of our education and general fund (E&G) costs,” said Moffitt. “And tuition dollars represent 82 percent of our E&G revenue. There is a direct relationship between tuition and personnel costs, and we need to responsibly balance increasing salaries for our faculty and staff with keeping tuition as low as possible for our students.”
Moffitt also shared comparative data on several key issues. When compared to Association of American Universities public university peers, UO:
- Has a budget that is 62 percent of the average university on a per-student basis;
- Pays tenure-related faculty on average 92.7 percent of the average;
- Has a faculty-to-student ratio that is 68.1 percent of the average; and
- Has a staff-to-student ratio that is 59.3 percent of the average.
The presentation included information on Other Payroll Expenses (OPE) and how it is charged, the athletics budget, new investments in administrative services and other areas United Academics leadership specifically requested.
“We are committed to working with our faculty and helping provide them the tools that they need to be successful,” said Moffitt. “We value the faculty and their contributions. I hope this presentation helps people to better understand our budget challenges and that it furthers the dialog on how we can work productively together in this environment.”
Related: UO collective bargaining resources
Following the presentation, Bill Brady, senior director of employee and labor relations, provided the university’s counter offer to Article 26 (Salary) of the collective bargaining agreement.
United Academics proposed a 13.5 percent increases over two years, which the university estimates would cost $28.5 million over the contract period. The administration countered with a lump sum payment of $600 for each full-time faculty member in FY16 and a 1.0 percent increase in FY17, which represents an additional investment in faculty of nearly $2 million.
During the last round of negotiations, the faculty received 12 percent increases over the life of the contract.
“While we know that this is not where the union had hoped to be, it reflects the current state of our finances,” Brady said. “As we just heard, the budget is very tight and we need to make sure that we are using limited resources wisely.”
In addition to the $28.5 million in salary increases, United Academics has proposed new investments in faculty benefits totaling $3.5 million over the contract period, which Brady said the university cannot afford.
The two sides will meet again at 2 p.m. Thursday, April 16, in the Collaboration Room in the Knight Library.
—By Tobin J. Klinger, Public Affairs Communications