Chancellor outlines proposed restructuring of higher ed.

Members of the City Club of Portland listened last Friday as Oregon University System Chancellor George Pernsteiner and Oregon State University President Ed Ray revealed details of Senate Bill 242 (SB242). The changes proposed in the bill would allow Oregon’s seven public universities to operate under their own public system, rather than as state agencies.

“The state legislative process is not responsive to enrollment growth, even when the money comes from the students’ tuition,” Ray said. “Under the current system, we can’t even use existing cash reserves to maintain and repair facilities at OSU to improve safety.”

Ray’s comments highlighted a key area of contention between the Oregon State Legislature and OUS. Under the present system, universities in Oregon must appeal to the Legislature before spending tuition dollars from their own cash reserves. Last December, the Legislature denied such a request for more than $17 million in emergency funding for the university system.

SB242 would give OUS control of its tuition dollars, and prevent the state from redirecting student tuition from the university system to other state agencies at the discretion of the Legislature.

“What this proposal is all about is using all of the dollars that students pay toward their education,” Pernsteiner said.

He noted that currently, tuition dollars may be used by other state agencies, including the Department of Corrections.

“If you look at the cost of instruction in Oregon, adjusted for inflation, it’s flat,” he said. “It’s about the same as it was in 1990; the only difference is that the burden of the cost has shifted from the state to the student.”

Oregon is ranked 45th in the nation when it comes to state investment per student in higher education, and OUS expects that further budget cuts are on the horizon. Pernsteiner and Ray believe that SB242 is necessary to offset this imbalance, and to allow universities in Oregon to react to enrollment growth by hiring new staff and maintaining facilities.

“The choice is clear: bureaucracy or student success,” Pernsteiner said. “If this bill passes, it means more students, more degrees and more security for Oregon. We don’t have to wonder about the alternative, because we’ve seen it before.”

Pernsteiner referred to Ballot Measure 5, which brought about massive budget cuts in the early 1990s, forcing OUS to eliminate 100-degree programs and raise tuition by 40 percent in a single academic year.

While OUS has rebounded to enjoy rich enrollment numbers, continual budget cuts and the lack of control over tuition dollars have made those numbers difficult to manage. The increased flow of tuition dollars has had little positive effect, as the university system has been given limited access to its cash reserves by the Legislature.

According to OUS, this has led to larger classroom sizes and puts students in peril of getting less out of their education than they are paying for.

SB242 carries with it stipulations that universities must meet performance standards in order to maintain control of their own funding, though the criteria for these standards was not immediately available.

During the conference, the press was not allowed to ask questions; only members of the City Club of Portland were given the opportunity to address Pernsteiner and Ray. Boasting a membership of the city’s business elite, the focus of many of these questions rested on what checks and balances would exist under the new system, should the changes in SB242 become a reality, and whether the public could be assured that tuition wouldn’t

be raised yet again.

Both Pernsteiner and Ray stressed that these were issues to be decided only after the measure’s fate had been determined on the Senate floor.

Supporters of SB242 fear that its biggest challenge may be keeping momentum in a Senate session. According to Pernsteiner, keeping a focus on the bill is going to be difficult in the midst of the state’s other financial woes.

“Keeping the inertia going may be difficult when the air is being sucked out of the room,” he said.

SB242 is expected to be heard by the Senate Education Committee when the Legislature resumes on Feb. 1. ?