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Oregon Legislature approves higher education budget with major cuts

Contact: Di Saunders, OUS Communications Director - Office: 503-725-5714; Cell: 971-219-6869 

Decreases will strain enrollment, increase tuition, cut courses and services, and force layoffs, pay cuts

Click here to view the OUS 2009 - 2011 Budget Summary Fact Sheet.

PORTLAND, June 30, 2009 – The Oregon Legislature yesterday appropriated state funding of $807.5 million for Oregon’s 2009-2011 higher education operating budget, a reduction of $118 million or 13% from the Oregon University System’s Essential Budget Level (EBL) of $925.3, the level needed to maintain current programs and services; or a 9.6% reduction from the 2007-2009 Legislatively Approved budget of $893.2 million. This reduction comes at a time of unparalleled enrollment demand at Oregon’s universities. Enrollment increased by 4,500 students this year and is expected to grow by nearly 5,000 more by 2011.

Chancellor of the OUS, George Pernsteiner, said, “The severe funding reductions taken by our public universities will have a significant impact, shifting more costs to students and families through inescapably higher tuition. These reductions also will force program and course cuts, faculty and staff layoffs and pay cuts, and reductions in community and public services, even as our universities are seeing growing student demand and record enrollment. That’s putting a tremendous amount of stress on our universities. At a time when a record number of Oregon citizens have recognized that a higher education is critically important, the state has chosen not to invest in them and in the state’s own future.”

Enrollment projections (headcount) for fall term 2009 and 2010 for OUS are estimated at 89,063 and 91,264, respectively, up from fall 2008 enrollment of 86,546. “It will be difficult for some of our campuses to manage enrollment demand with fewer resources than they have now,” said Pernsteiner. “There is certainly the potential that some campuses may have to restrict enrollment. In cases where students are turned away from one university, we will do our best to enroll them in an OUS campus that still has capacity.”

Pernsteiner said that faculty and staff will also feel the budget cuts through likely reductions in their salaries, up to as much as 4.6% from their current base, and layoffs or reductions in work schedules. Cuts in the numbers of classes and course sections and the numbers of faculty and staff will further impact students, making it harder for them to get the classes and support services they need, extending their time in college in some cases, and increasing class sizes, affecting student interaction with and support from faculty.  This is likely to increase the time it takes students to earn degrees.

The 2009-2011 level of state appropriated funding for higher education is a major reversal from the significant budget increases provided two years ago, which began to turn around decades of disinvestment in Oregon’s students and public universities. Tuition increases, which had been lower than national averages for the last four years at 3.4% per year, will now increase substantially more than that, at differing levels depending on the university. Tuition rates for the 2009-10 academic year will be addressed by the Board of Higher Education on July 10. Earlier this year in a move to insure affordability, the Board of Higher Education voted to consider a set-aside of 30% of all tuition revenues above a 3.6% increase for need-based aid for low-and moderate income families during the 2009-2011 biennium. “With the decreases in the Oregon Opportunity Grant and the increases in the numbers of students with financial need, the 30% allocation for need-based aid will go a long way to insure that affordability is maintained for the students who need it most,” said Pernsteiner.

The OUS capital budget was approved at $713.3 million, representing increased use of state bonding authority, lottery bonds, and access to energy loans, but did not include any state General Fund dollars as it did in 2007-2009. This is an increase of 27% from the 2007-2009 capital budget. Bob Simonton, OUS assistant vice chancellor for capital programs, construction and planning, said, “We appreciate the funding level provided in the OUS capital budget, which will go far in helping Oregon’s economy rebound. This budget means more than 6,400 jobs for Oregonians and over $500 million in increased earnings for our citizens, providing over $1.6 billion in economic output for the state.” The capital budget – made up of a variety of bonds and energy loans but no state General Funds – will be used to update and upgrade science and engineering labs, and expand classroom capacity. Simonton said that funding will also improve student safety, preserve and improve current instructional space and research facilities, maintain quality teaching, learning and research environments that prepare students for the workforce, and maintain both historical and contemporary capital assets of the state.

All of Oregon’s counties, especially its rural areas, will continue to be helped through the $104.7 million in funding received for the Statewide Public Services (SWPS), run out of Oregon State University as part of their land grant mission, although at a reduced level of services. This budget represents a decrease of 11.5% from the Essential Budget Level of the SWPS, and will require a reduction in staffing support and services across the state. The OSU Agricultural Experiment Station, Extension Service, and Forest Research Laboratory are the research and development engine of Oregon’s $26 billion agricultural and food industry and the $13 billion forest industry, creating 345,000 direct and indirect jobs in the state. The Extension Service leverages human capital through a corps of 20,000 trained volunteers and provides non-credit educational programs to thousands of adults and youth throughout Oregon.

The Engineering and Technology Industry Council, ETIC, funding was decreased by 15% from the Essential Budget Level. The $33 million appropriation is down from the $37.3 million in funding received in 2007-2009. ETIC is a public-private partnership that leverages millions from key industries which share the OUS goal of increasing the number of technology and knowledge workers, and which help the state build the highly skilled workforce needed to keep companies here, and bring in new organizations with new jobs and high skill wages for Oregonians. Funding decreases will reduce engineering and technology programs and support services for students, decrease faculty research capacity, and reduce outreach to middle and high school students to increase their interest in pursuing careers in engineering and applied sciences.

Paul Kelly, president of the State Board of Higher Education, said, “The OUS is very proud of the efforts during this Legislative Session of our universities and our postsecondary and business partners in advocating for student access, academic quality, and innovation in higher education. Our graduates represent the economic future and hope for Oregon today and for generations to come. Even in the worst of economic times, policymakers must recognize that public funding of higher education is an investment, not a cost, with a very high rate of return for the state in jobs, economic development, and increased revenues.”

Oregon University System comprises seven distinguished public universities, reaching more than one million people each year through on-campus classes, statewide public services and lifelong learning. For additional information, go to www.ous.edu

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