Governor’s budget plans hit UO in significantly different ways

Oregon legislative chambers

On Nov. 28, Oregon Gov. Kate Brown released her recommended budget for the 2019-21 biennium, including two options with significant implications for higher education funding.

The first version, which state law requires the governor to craft, is a balanced base budget that allocates funds based on current revenue projections. The second version is an investment budget that assumes the passage of cost containment and revenue reform in the next legislative session.

The two budget options would have very different outcomes for the UO’s operating budget, student aid, and academic and research funding.

On the operations side, the base budget allocates no additional investment for the Public University Support Fund over the last biennium, keeping total operating funds for all Oregon public universities at $736.9 million. Because of increased operating costs that occur over a two-year period, flat funding represents a decrease in investment for the UO.

JOINT UNIVERSITY STATEMENT

“The Governor’s budget provides a stark choice for the legislature and the people of Oregon: either force universities to make cuts to academic and student support programs while also raising tuition by double-digits or make college more affordable and accessible through balanced revenue reform and meaningful cost control in areas like retirement and health care. 

“Even as campuses continue to find cost efficiencies wherever possible, without additional resources for public universities, the budget proposed by the Governor means students will face onerous double-digit tuition hikes and cuts to the types of services and aid they need to reduce debt, graduate, and find a job. This is not an acceptable outcome for Oregon. Public universities are committed to working with the Governor and the Legislature to find solutions that expand opportunities for students instead of limiting them.

“It is time to stop relying on students and their families to shoulder our economic challenges. It is time to invest in Oregon.”

—Signed by the presidents of all seven public universities in Oregon

Under this budget option the UO would likely be forced to consider double-digit tuition increases for resident undergraduates and potential cuts to services, programs and workforce in order to balance its budget.

The investment budget increases the Public University Support Fund by $120 millionfor a total of$856.9 million. This level of funding would keep tuition increases for resident undergraduate students at the UO at or below 5 percent for the next two years. It would also preserve most recent investments in financial aid and student support programs, such as academic advising and PathwayOregon.

State programs, which include institutions, centers and programs operated by public universities, are another area of concern. As opposed to providing instructional support, these programs address economic development, natural resources and other public policy issues.

Many of these programs have an industry-specific focus, matching state support with funds from the private sector and other sources. At the UO, they include the Labor Education Research Center, clinical legal education and the Oregon Office for Community Dispute Resolution in the School of Law.

The governor’s base budget keeps funding for all state programs flat from the last biennium, with the exception of the engineering and technology sustaining fund, which is eliminated entirely. The $25 million fund is used to invest in public research universities that respond to urgent engineering education needs of Oregon’s fast-growing high tech industry.

In contrast, the governor’s proposed investment budget increases funding for all state programs to meet inflationary costs. It not only maintains the fund’s level, it increases it by $35 million to a total of $60 million.

The UO would benefit from this increase in relation to the expansion of its research portfolio and establishment of the Knight Campus for Accelerating Scientific Impact.

In capital construction, the UO’s top request to the state is the renovation of Huestis Hall, a STEM and life sciences hub for 3,000 students and faculty members each year. While the governor did not include funding specifically for this or any other capital construction projects requested by universities in either of her budget scenarios, both budget options set aside $225 million in state-backed bonds for university projects.

The university and UO advocates will request $54 million for the renovation of Huestis Hall to make seismic upgrades and renovate teaching and research spaces.

Student aid in the base budget would see flat funding for the Oregon Opportunity Grant, the state’s only need-based aid program, at $152 million. In the governor’s investment budget, the grant is nearly doubled, reaching $273 million.

A provision of state law also allocates 1 percent of net lottery proceeds to public universities for the former sports lottery program. The UO receives approximately $1 million each biennium from general lottery dollars to replace what universities used to receive from the now-defunct Sports Action Lottery. The revenue provides intercollegiate athletics scholarships as well as academic scholarships for graduate students.

The governor’s base budget eliminates sports lottery funding entirely. The investment budget restores that funding at the full 1 percent.

Another area where universities are affected is academic, research and economic development funding. In the base and investment budget options, the governor allocates $12 million to fully build out the multihazard sensor network for the ShakeAlert earthquake early warning system wildfire prevention, monitoring and mitigation by 2023.

The UO works with other West Coast states and universities to bring this technology to the public through the Pacific Northwest Seismic Network, and UO faculty members and technicians operate the network in coordination with the U.S. Geological Survey and other federal agencies.

The only previous direct state investment in this work was in 2015 when the Legislature allocated $670,000 for the purchase of more seismic sensors.

In the governor’s investment budget, additional academic, research and economic development funding that benefits the UO includes:

  • $15 million in campus public safety improvements through the creation of a statewide shared services training program for higher education institutions focusing on prevention, preparedness, incident response, continuity and recovery.
  • $10 million to establish a public university innovation fund at the Oregon Business Development Department, the state agency that oversees economic development activity, to support economic development partnerships between businesses and public universities. The innovation fund provides matching funds for university grant requests for applied research.
  • $5 million in funding for the International Association of Athletics Federations World Outdoor Track and Field Championships, which will take place in 2021 in Eugene. This will be the first time the event has been held in the United States.

The Oregon Legislature will consider the governor’s recommended budget during the 2019 legislative session that starts Jan. 14.