University budget team reveals initial budget outlook

While reviewing the initial budget submissions for the 2011–13 biennium from across Portland State, the university budget team held a forum on Tuesday to hear concerns voiced by the campus community.

During the forum, members of the budget team discussed how PSU compares to its peer institutions, the Oregon University System’s 2011–13 budget projections and the priorities around which the initial budget is being drafted.

Compared to OUS’ 2009–11 biennium budget, which totaled $697.2, Governor John Kitzhaber’s 2011–13 recommendation for OUS’ budget totals $531.7, an overall 23.7 percent reduction from the last biennium, according to Vice President for Finance and Administration Lindsay Desrochers. 

PSU’s 2011–13 recommended budget totals $113.7, an overall 23.8 percent reduction, leaving the university with a $17.7 million budget gap for the 2011–12 fiscal year, Desrochers said. However, she also noted that once factors such as inflation are calculated, this gap looks more like $23.7 million.

To fill this gap, Desrochers said the university is implementing 3 percent across-the-board Education and General fund reductions in each academic unit, and is freezing 45 percent of the current E & G fund. The university is also implementing a temporary hiring pause, and plans to tap into its fund balances and will likely have to raise tuition.

 “We are going to need to use a substantial amount to get us through [the 2011–13 biennium],” she said. “We hope to see some improvements in the [2013–15] biennium.”

According to PSU President Wim Wiewel, PSU operates much more efficiently than its peer institutions; it spends about 60 percent of what other public research institutions spend.

“We have over the past few years tried to manage our resources very smartly because we knew that these tough times would come,” he said.

Commenting on PSU’s revenue sources, Wiewel said that PSU’s tuition is 7 percent less than its sister institutions. In regards to state support, it receives only 59 percent of the average funds its peers receive.

In addition, PSU’s revenue from auxiliary services and philanthropic gifts is substantially less than its peers. However, Wiewel said that PSU has more control over these numbers than what is receives from the state.

And how is this money used? Wiewel said that PSU spends above average on instructional costs, but is not spending enough on student services and research.

Vice Provost for Academic Affairs Roy Koch said that the budget team is focusing on four strategic priorities while drafting the budget. These include increased investment in student success initiatives—such as the advising initiative implemented last fall—and additional investments in academic programs and research infrastructure.

“Last year, we had more students than ever, and we’re finally making progress in terms of retaining them at a higher rate,” Koch said. “We’re really on a great trajectory, but we want to make sure that whatever we do in this period continues on that trajectory.”

After the presentation, members of the audience were given the opportunity to pose questions to the panelists. One attendee was concerned about OUS’ recent approval of its automatic admissions policy for qualifying high school students.

Despite budget cuts, Koch said that PSU would most likely already accept students that qualified for automatic admissions. In addition, he said that OUS does not promise financial aid for those that qualify.

Other concerns included the hiring freeze and how PSU would balance the recruitment of out-of-state students (who would provide more tuition revenue to the university) and access to in-state applicants.

“It’s a balancing act,” Wiewel said.

Wiewel also noted that PSU’s student population is comprised of roughly 20 percent non-resident students. PSU hopes to raise that number to 30 percent.

The university budget team will create the first set of budget recommendations in April. After they have been submitted to Wiewel, PSU will host campus-wide hearings on May 11 to get final feedback before it is reviewed by the Legislature in June. ?