Oregon higher ed leaders propose budget they say will jeopardize programs and raise student costs

The board tasked with broad oversight of Oregon’s public universities and community colleges signed off on its $4.75 billion budget proposal. But the Oregon Higher Education Coordinating Commission was not happy with it.

“[W]e are seriously concerned that at the funding levels described within our [agency recommended budget], Oregon will hinder progress towards state goals for postsecondary education and training,” read a letter approved by commissioners and signed by Chair Sandy Rowe, who is also a member of OPB’s board of directors.

The HECC budget proposal published Thursday was informed by the agency’s strategic plan as well as public comment and input from individual commissioners. But the biggest constraint on spending plans came from limits set by Oregon Gov. Tina Kotek and the state’s finance office.

The commission’s spending levels “adhere to budget instructions developed by the Governor and Chief Financial Office (CFO), including that the HECC limit its requests for new General Fund spending to 1% of its total 2023-25 General Fund budget, or about $31 million,” the commission said in its summary of the budget approval agenda item.

With only $31 million to add to its current budget, HECC said it was hard-pressed to offer Oregon students an affordable education and necessary support. The commission letter said the governor’s spending limits were based on a 6.8% rise in labor costs, which falls short of “the colleges’ and universities’ own projections of 11.5% and 9.5% increases respectively, discounting real-time collective bargaining agreements and other inflationary pressures.”

Higher ed Commissioner Richard Devlin was one of the leading budget experts in the Oregon Legislature, where he served for more than 20 years. Devlin complained that the current service level, or CSL, amounts aren’t based on the financial realities at colleges and universities.

“The actual CSL that’s being produced by [the Department of Administrative Services] doesn’t, in any way, reflect the actual underlying costs,” Devlin told fellow commissioners at Thursday’s meeting. “That’s largely because the whole process and the whole methodology for producing that CSL isn’t based on any real analysis of costs.”

In a response sent to OPB Friday morning, Kotek’s press secretary Roxy Mayer emphasized that the spending plan HECC approved is a “preliminary step in the budgeting process.” The statement defended the spending guidelines given to agencies such as HECC, while it also put the spending limits in context of the governor’s priorities, which include “seeking a broader set of options for budget areas that touch on housing and homelessness, behavioral health, and education.”

The governor’s statement concludes by saying HECC’s letter will be “helpful” in the budget process going forward.

The commission’s letter estimates it would take an additional $54 million to cover the gap between the governor’s estimate of labor costs and what colleges and universities say labor will cost.

The next step for HECC’s proposed budget is for inclusion in the governor’s proposed spending plan. The governor’s budget is set to come out Dec. 1, ahead of next year’s legislative session, during which lawmakers approve biennial budgets for all of the state government. The commission stated its hope is that Kotek and other legislators will increase spending above what HECC recommended.

If university and college spending ultimately reflects what HECC proposed, commissioners said in their letter that the funding level would “hinder progress towards state goals for postsecondary education and training” and “would further shift the cost of postsecondary education from the State to students.”

Much of the $31 million in additional spending would go toward the Oregon Opportunity Grant, one of the state’s main debt-free supports for students in need. But in their letter, HECC members say their proposed budget would not sufficiently support low- and middle-income students.

A final concern expressed by commissioners: Some programs would not have dedicated support at all under the budget, because guidance from the governor’s office and chief financial office focused on ongoing spending, rather than one-time investments. For that reason, HECC says programs such as the Future Ready workforce initiative and the Oregon Conservation Corps would “cease” under the proposed budget.

In a press statement sent after the HECC’s budget approval, representatives of the Oregon Community College Association and the Oregon Council of Presidents urged the higher ed commission to “reconsider” the proposal. Presidents of the student bodies at Oregon’s public universities argued HECC was falling well short of the additional $275 million requested by the institutions they attend.

“This budget fails to meet that need, meaning that students will be forced to pick up more cost,” the student presidents said. “It will impact the availability of wraparound services for students that help with access to more affordable housing, childcare, food insecurity, and transportation.”

This story was originally published by Oregon Public Broadcasting, an Oregon Capital Chronicle news partner.