Because of a decrease in state funding and a bleak economic atmosphere, higher education will be a hot topic in this year’s 2011 Oregon Legislature. Its agenda includes the consideration of proposals from both the Oregon University System and the University of Oregon that would give Oregon’s public universities more autonomy and control over their
revenues.
The legislature has also created a bipartisan task force to work through the proposals presented by OUS and U of O and to create an overarching restructuring proposal, as well as to consider measures that would allow high school students to earn college credit.
According to Senator Mark Hass, co-chair of the task force, if the bill were passed, it would change the legal status of OUS from that of state agency to that of a public university system, similar to Oregon’s community colleges.
The hearings on the bills will begin Feb. 2, though it is possible that the OUS and the task force bills will merge during the legislative session.
OUS proposal
OUS’ proposal aims to free up tuition revenues and allow them to be applied to campus needs across the state. The state often “sweeps” university revenues and uses the money for other state agencies, according to OUS Director of Communication Diane Saunders.
“So the tuition that students are paying doesn’t end up going to facilities or hiring of professors, but can end up going to [the Oregon Department of Transportation] for new roads or to prison lunches or something,” she said.
According to Saunders, this year OUS attempted to get $20 million in revenues back for use on campus, but was only given $2 million by the state. The state intends to review the budget for the year and then consider giving the schools back the rest of the tuition revenues.
The university system is the only public institution that is subject to these sweeps. K–12 and all 17 community colleges get to keep their revenues and use the money as they see fit.
“We just don’t see why we should be different,” Saunders said.
Saunders noted that many students’ biggest concern is how restructuring will affect tuition.
“There will not be a change in the current structure, except for more inclusion of students in the process,” she said.
PSU President Wim Wiewel is a staunch supporter of the proposal and is concerned about what may happen if the proposal is not passed.
“The OUS proposal lays out the arguments for the proposed changes,” Wiewel said. “The consequences of not passing it are logically implicit in those arguments…It would mean less money available for students’ services and teaching, more time wasted on unnecessary administrative activities, greater uncertainty about the future, less ability to respond quickly to opportunities.”
According to Saunders, this could mean OUS having to cap tuition, as the California University system has done, or raise tuition, like colleges in Washington have done.
U of O proposal
While all seven Oregon Universities have come together to support the OUS proposal, U of O has caused some concern in the group over the decision to bring its own proposal to the table. The Oregon State Board of Higher Education does not support this bill.
However, according to U of O’s Senior Director of Communication Phil Weiler, its proposal will not threaten OUS’ proposal. Rather, it is considered an extension of OUS’ proposal.
“Essentially, we are asking that the legislature do both,” Weiler said. “To pass that initial proposal and then take the extra step and pass the U of O proposal as well.”
OUS is concerned, according to Saunders, because it fears the legislature will not consider both proposals at once and it is important that the proposal most beneficial to all Oregon universities be passed before individual institutions begin presenting their own needs to the legislature.
According to Weiler, the university’s proposal would allow for the creation of local governing boards that would focus on each institution and better serve their needs.
If U of O’s proposal were passed, the Board would still act as a coordinating body. In addition, the local governing boards would still need to meet accountability standards, such as a certain student retention rate.
Additionally, the proposal outlines a different funding model for U of O, Weiler said. Only 8 percent of U of O’s budget currently comes from the state, the rest comes from tuition, philanthropic gifts and other funding sources. However, the legislature decides how to allocate all of its funds. Therefore, U of O seeks to lock in its current funding from the state and use that money to pay the debt service on a bond it could sell.
It would represent a roughly $800 million bond that U of O would match dollar-for-dollar so that it would have a $1.6 billion endowment that it could use, according to Weiler. The endowment would act as a savings account, accruing interest that would then be used to run the university. U of O’s goal is to eventually remove itself from OUS’ yearly competition for funding.
Wiewel feels the U of O proposal is interesting, but the timing is off.
“[It] would best be considered after the 2011 session, where the legislature will be considering the OUS proposal,” he said.