Contacts: Di Saunders - Office: 503-725-5714; Cell: 503-807-5539

 

Board of Higher Ed Reviews 2003-05 Biennium Budget, 
Implications for Student Affordability and Enrollment 

PORTLAND, September 19 - The State Board of Higher Education (the "Board") today and yesterday held its first regular meetings of the 2003-04 academic year, with the primary discussion focusing on the reduced 2003-05 budget for the Oregon University System.

Budget Reductions  Board members reviewed the OUS 2003-2005 operating budget and its implications, adopted by the Oregon legislature on August 29. Tom Anderes, senior vice chancellor for finance and administration for OUS, said that the funding outcomes could be viewed through four overlapping themes: (1) quality of services was preserved; (2) access may be enhanced; (3) affordability to students is reduced; and (4) faculty and staff (as with all state employees) sacrificed salary adjustments to offset severe state General Fund reductions. The State General Fund portion of the OUS budget is $550.7 million for 2003-05, down from $617.4 million in General Fund appropriations for the 2001-03 biennium, a reduction of 10.8%. 

Full time enrollment for 2003-05 is expected to be 147,314 students, with 98,058 funded by state appropriations and 49,256 funded on tuition only with no available state appropriation. Funding per full time student for 2003-05 is $10,274, with $3,738, or 36%, funded through General Fund state appropriations and $6,536, or 64%, funded through student tuition. Anderes noted that if enrollments fall below levels projected, universities will have reduced tuition and fees and must implement further reductions. He added that with the increased tuition rates for students, campuses are assessing their financial aid alternatives to address growing demand from needy students in meeting college costs, especially given the cap on fee remissions - a form of campus-based financial aid - of 8% of tuition revenue.

"The growing share of college costs that students are bearing should be a major concern to all Oregonians," said Jim Lussier, president of the State Board of Higher Education. "In 1999-01 students and the state split the costs almost 50-50, with the student share growing to 54% in 2001-03. Now, for 2003-05, students are covering 64% of the cost of education. That is a major access concern that Oregonians are facing at least through this biennium that will hit low income students and families the hardest," added Lussier. 

"Oregon's public higher education system is facing major challenges in the next several years to ensure that all eligible students, regardless of income, have access to an affordable college education," said Richard Jarvis, chancellor of Oregon University System. "We need also to be concerned if the legislative tax increase is put on the February ballot and is not supported by Oregonians. That will further push a college education out of the reach of our low- and middle-income citizens in the state."

Capital Construction The 2003-05 budget provides $40 million to support Signature Research Centers at Oregon State University, Portland State University, and University of Oregon that will focus on commercializing research opportunities primarily in multi-scale materials and devices. In addition, Anderes said that state sources through Article XI-G bonds and General Fund, Lottery bonds, self support through Article XI-F(1) bonds, and gifts and donations supplied a total of $446 million that will fund 24 capital construction projects on OUS campuses. Anderes noted that while there is $24 million to undertake needed repairs and upgrades on the OUS campuses, the $500 deferred maintenance initiative introduced in the 2003 legislative session - while acknowledged as critical to OUS universities and the state's community colleges - could not overcome the legislature's concern for increasing state debt, and failed to pass. The Governor's effort to obtain $20 million in lottery bonds to support Engineering and Technology Industry Council (ETIC) capital construction projects at OUS campuses also failed, again due to concerns over adding to state debt.

In other action and discussion at today's and yesterday's meetings, the Board:

  • Ratified and voted on actions taken in Committee meetings.

  • Discussed the passage of Senate Bill 437, the Flexibility Initiatives, which will provide administrative relief for OUS campuses in areas such as disposal of property; acquisition of information and telecommunications technology; bidding procedures; retention of interest on funds donated for construction of capital projects; and exempt donors from review of public records.

  • Approved Southern Oregon University's request to execute a 7-year ground lease with the Jefferson Public Radio Foundation for the purpose of constructing a new $10 million facility to house JPR, its Foundation offices, and the Western States Museum of Broadcasting. JPR is a network of 19 radio stations that stretch from Eugene to Mendocino, California, and is ranked as one of America's largest public radio services. Funds for the new facilities will be raised by the JPR Foundation, which intends to donate the facilities to SOU upon completion.

  • Approved an amendment correction to the Optional Retirement Plan, clarifying that the forfeiture account value is established at the time of a participant's employment termination instead of at a Plan Valuation Date.

  • Accepted the quarterly management reports for June 30, 2003, which are mechanisms established to provide assurance to the Board that the financial activity of OUS universities is being monitored on an ongoing basis.

  • Approved new programs to be offered by OSU including: Earth Science, B.S.; Education, B.A., B.S.; Molecular and Cellular Biology, M.S.; and by OUS, the Collaborative Reading Endorsement to offer a distance-delivered program collaborative through five OUS campuses that would prepare teachers to receive the Reading endorsement.

Oregon University System (OUS) 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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