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Higher Education Budget Moves in the Legislature

On Tuesday, June 14, 2005, the House and Senate budget subcommittees each passed their versions of the Oregon University System operating budget. The House and Senate budgets are similar in most respects and include nominally more funding than the Governor’s recommended budget. The budgets now move to the full House and Senate budget committees for official adoption. It is anticipated a budget conference committee will be called to reconcile the differences between the two budgets, resulting in a final third version of the OUS operating budget.

The OUS Capital Construction Budget is expected to be scheduled for final action in the next few weeks.

Following is a summary of the two versions of the operating budget as they relate to changes from the original Governor’s Recommended Budget.

House Higher Education Budget (HB 5153)

General Fund (GF) – $690,833,406.

This is an increase of $30.9 million over the 2003-05 legislatively approved<> budget, and a $22.5 million increase over the Governor’s Recommended Budget. However, it should be noted that $20.5 million in GF is a substitute for expected tuition revenues, and represents funding the tuition buy-down.

• Undergraduate Education – The House budget increases GF support for undergraduate education by $13 million. These funds are to be distributed through the Resource Allocation Model.

• Tuition and Fees – The House budget provides $20.5 million to fund a tuition buy-down from the Governor’s recommended tuition increases. The Governor’s budget called for a seven percent increase in tuition and fees in the first year of the biennium and five percent in the second year; the House budget calls for a 3.25 percent (3.25%) increase in tuition and fees the first year of the biennium and 3.5 percent (3.5%) the second year. The House funds the difference with $15.4 million in GF. It also provides for $5.1 million in GF to fund need-based fee remission awards for a total of $20.5 million in GF. The House chose to fund fee remissions in lieu of increasing funding for the Oregon Opportunity Grant.

• Fee Remission Cap – The House repeals entirely the cap on programmatic and graduate fee remissions.

• Faculty Recruitment and Retention – The House appropriates $1 million in GF for faculty recruitment and retention; $190,000 of this amount is earmarked for Statewide Public Service faculty.

• K-16 Student Data System – The House appropriates $2,081,250 to the Legislative Emergency Board for the K-16 data system.

• Agricultural Experiment Station - Additional GF Increase of $2.3 million

• Extension Service - Additional GF Increase of $1.8 million

• Forest Research Laboratory - Additional GF Increase of $300,000.

• Increases in expenditure limitations:

• $22.7 M Increased tuition and fees from anticipated enrollment growth (Other Funds)
• $182,342 For increased Sports Action Lottery Fund revenues (Lottery)
• $26.6 M for increased Tuition and Fee revenues (Other Funds)
• $20 M for Certificates of Participation (COP) proceeds for IT purchases (Other Funds) and $1.95 M COP Debt Service (Non-limited Other Funds)
• $3.8 M for the Forest Research Lab from Forest Products Harvest Tax funds (Other Funds)
• $4.7 M for Debt Service on PSU City Tower (if approved by Legislature in Capital Construction Budget) (Non-limited Other Funds).

Budget Cuts – The House made program reductions in the following programs:

$ Chancellor’s office - $700,000

$ Western Undergraduate Exchange Program and Fee Remission Equity - $1.6 M.

$ Campus Public Services - $1 M

$ Cut GF for Information Technology purchases - $5.1 M

$ Cut Services and Supplies and Capital Outlay - $3.4 M.

$ Cut PERS Funding - $3.2 M. (A technical adjustment to the Governor’s Recommended Budget, due to projected PERS savings).

Senate Higher Education Budget (SB 5603)

General Fund (GF) - $684,610,725.

This is an increase of $24.7 million over the 2003-05 legislatively approved budget and $16.3 million above the Governor’s Recommended Budget. However, it should be noted $17.25 million in GF is a substitute for expected tuition revenues, and represents funding the tuition buy-down.

• Undergraduate Education/Enrollment Growth – The Senate budget increases GF support for undergraduate education by $4.9 million. These funds are to be distributed through the Resource Allocation Model. The Senate budget also provides for $4.9 million in GF to fund enrollment growth to be distributed to campuses on the basis that fundable enrollment exceeds actual 04-05 academic year fundable enrollment.

• Tuition and Fees – The Senate budget provides $17.250 million to fund a tuition buy down from the GRB tuition increases. The Governor’s budget called for a seven percent increase in tuition and fees in the first year of the biennium and five percent in the second year; the Senate budget calls for a three percent (3 %) increase in tuition and fees in each year of the biennium. The Senate funds the difference with $17.25 million in GF.

• Opportunity Grant - The Senate budget provides an additional $6.45 million for the Oregon Opportunity Grant.

• Fee Remission Cap – The Senate increases the fee remission cap to 10 percent (10%) for programmatic fee remissions and eliminates the graduate fee remission cap.

• Faculty Recruitment and Retention – The Senate appropriates $1 million in GF for faculty recruitment and retention. Of that amount, $190,842 is earmarked for Statewide Public Service faculty.

• K-16 Student Data System – The Senate appropriates $2,081,250 to the Legislative Emergency Board for the K-16 data system.

• Agricultural Experiment Station - Additional GF Increase of $1.3 million.

• Extension Service - Additional GF Increase of $500,000.

• Forest Research Lab - Additional GF Increase of $300,000.

• Increases in expenditure limitations:

• $22.7 M Increased tuition and fees from anticipated enrollment growth (Other Funds)
• $182,342 For increased Sports Action Lottery Fund revenues (Lottery)
• $26.6 M for increased Tuition and Fee revenues (Other Funds)
• $20 M for Certificates of Participation (COP) proceeds for IT purchases (Other Funds) and $1.95 M COP Debt Service (Non-limited Other Funds)
• $3.8 M for the Forest Research Lab from Forest Products Harvest Tax funds (Other Funds)
• $4.7 M for Debt Service on PSU City Tower (if approved by Legislature in Capital Construction Budget) (Non-limited Other Funds).

Budget Cuts – The Senate made program reductions in the following programs:

$ OSU Natural Resources Institute - $250,000

$ Chancellor’s office - $700,000

$ Western Undergraduate Exchange Program and Fee Remission Equity - $1.6 M.

$ Cut GF for Information Technology purchases $5.1 million, replaced with authority to issue COPS for the same amount

$ Cut GF support for the Oregon Joint Schools of Professional Business $400,000.

$ Campus Public Services - $1 million: The Senate specifically protected the following campus programs from cuts:

• University of Oregon Labor Education Research Center
• Oregon State University Veterinary Diagnostic Laboratory
• Portland State University Saturday Academy
• Portland State University MESA program
• Portland State University Population Research Center
• Portland State University Dispute Resolution programs

$ Cut PERS Funding - $3.2 M. (A technical adjustment to the Governor’s Recommended Budget, due to projected PERS savings).

DHED Operating Budget Totals