Faced with an increasingly tightened budget and a growing slice of the pie going to employee benefits each year, Oregon’s State Board of Higher Education is considering major changes in how university employees receive health benefits and prepare for retirement.
The State Board of Higher Education is currently investigating how withdrawing OUS from the Public Employees Benefits Board and the Public Employee Retirement System would affect the rates for the rest of the state’s employees. These legislative concepts were delivered to the Department of Administrative Services on Monday as “placeholders,” so the board can fully investigate their impact.
According to Jay Kenton, vice chancellor for finance and administration for the Oregon University System, of the $71 million needed for retirement pensions and health benefits in the 2005-07 biennium, over $40 million will come from students through tuition.
Kenton said his proposals would be a way to get the same health benefits to faculty at a lower price to the university system. In turn, faculty salaries would supposedly increase. The faculty would then be expected to pay more of their co-payments.
Kenton said his plan would not affect existing benefit and pension plans, but would restructure how the money is distributed for new hires, increasing salary for all faculty and potentially saving the university system millions.
“I have visions of dump trucks dumping $20 bills on the sidewalks and me coming with wheelbarrows trying to pick them up,” Kenton said.
Some faculty members, however, are concerned about how much benefit from the plan would actually reach professors.
“We’d be skeptical how much flow would reach faculty salaries,” said Sy Adler, president of the professors union at Portland State, the AAUP. “They talk like it’s their money rather than the faculty’s money.”
Portland State professors and the administration were recently embroiled in contract negotiations, with talk of a strike surfacing. Disagreements were settled and the instructors received their first pay raise in over three years. Professors at Western Oregon University threatened to strike this week, an action averted two days before it was to begin.
In a university system where professors are paid among the lowest in the nation in a state that ranks at the bottom for state funding, if major changes to benefits go through, Adler said he believed it “could unite faculty all over the state.” He said that the faculty at both PSU and WOU made it clear they would fight any change.
Tim Nesbitt, a member of the board and former head of Oregon’s AFL-CIO, voted no on restructuring PERS and abstained on voting on the PEBS issue, due to lack of information. Nesbitt said this is not the time to meddle with faculty benefits.
“Slicing and dicing will end up shifting money between winners and losers,” he said.
Kenton said the plan would save money for the system while enticing potential faculty with higher pay. Kenton said this “kills two birds with one stone,” but Adler and Nesbitt both said they remained highly skeptical.
“Those are pretty thin arguments,” Nesbitt said.
Disagreements over the proposals to change the health and retirement packages come down to philosophical differences, Kenton said. According to Kenton, he sees the university system from a business perspective. Others look through different lenses.
Despite all the differences over this issue among people in the system, they appear to agree on one thing: the state Legislature is to blame.
“We need more control over our costs,” Kenton said. “We don’t control it, the state does.”
“The question is,” Nesbitt said, “what is the Legislature’s priority?”