BUDGET PLANNING FREQUENTLY ASKED QUESTIONS
October 2023
Q. WHAT IS THE CURRENT STATE OF THE 2023-24 BUDGET?
In June 2023, the PSU Board of Trustees approved the university’s budget, which utilizes approximately $20 million of the university’s reserves and includes a university-wide budget reduction of 1.3% to our general fund budget. The reasons for the budget reduction are driven in part by a projected continued decline in enrollment and a continued increase in expenses. In addition, the Board directed the university to maintain a minimum balance of Education & General fund (E&G) reserves, which has led to reduced access to “management reserves” that had previously been used within individual units to close budget gaps or fund one-time needs.
In September of 2023, the Board of Trustees approved President Ann Cudd’s request for an additional $4.5 million from E&G reserves. The president was able to make this request because the university closed the year in a more favorable budget position than forecast. The use of these funds support items that align with critical university priorities focused on improving retention and student success and mitigating risk and safety concerns for the campus community. In addition, the Board also approved the use of $1 million of the remaining Racial Justice Funds that will be used to continue the university’s commitment to making PSU a more equitable campus, an initiative called Time to Act.
Interim Vice President of Finance and Administration Andria Johnson will give more detailed information about the current budget at the 2023 Fall Budget Forum on Nov. 7.
Q. WHAT IS THE UNIVERSITY’S 2023-24 E&G BUDGET DEFICIT?
- $20 million.
Q. HOW IS 2023 FALL ENROLLMENT IMPACTING THE CURRENT BUDGET?
- Enrollment for the Academic Year 2023-24 is coming in as forecast, with an expected 3.7% reduction in overall enrollment, which the current budget is designed to accommodate. The Oregon Legislature's unexpected increase in funding to PSU will mitigate the effects of the lower summer term enrollment.
Q. WHAT DECISIONS HAVE BEEN MADE ABOUT NEXT YEAR’S BUDGET?
- No decisions have been made about the Academic Year 2024-25 budget. It is imperative that the PSU community begin the planning process for the budget now, as the university anticipates ongoing financial challenges that will likely include budget reductions and continued use of reserves. A participatory budgeting tool will be introduced and utilized at the 2023 Fall Budget Forum on Nov. 7 with the intention of expanding its use to enable engagement in budgeting at the local — or unit — level.
Q. HOW WILL THE UNIVERSITY COMMUNITY BE INCLUDED IN THE STRATEGIC PLAN THAT PRESIDENT CUDD IS PURSUING?
- At its September meeting, the PSU Board of Trustees directed President Ann Cudd to establish a strategic plan for the university by June of 2024. PSU is currently in its third year without a strategic plan in place. An initial strategic planning steering committee meeting was held on Oct. 5, 2023. That committee will be standing up workgroups that will address specific questions relevant to the strategic plan. The workgroups will hold campus forums to solicit feedback as their work progresses, Everyone at PSU will have an opportunity to weigh in, either at an in-person forum, or through electronic feedback.
Q. PSU STANDS TO RECEIVE $10 MILLION FROM THE STATE OF OREGON IN SUSTAINABILITY FUNDS. HOW WILL THESE BE USED?
- The Oregon Legislature set aside $25 million in state funds for the financial sustainability of Technical and Regional Universities (TRUs) and PSU. The first tranche of funding to PSU was $2 million and has been allocated to eleven projects, including funding to cover the strategic planning process. The PSU administration is seeking proposals for the second tranche of funds — an estimated $8 million. The proposals will be discussed and prioritized during a participatory budgeting session at the 2023 Fall Budget Forum on Nov. 7 in the Smith Ballroom. Criteria for the proposals and a list of projects from the first tranche of funding are listed in this memo.
Q. WHY CAN’T WE JUST SPEND ALL OF OUR RESERVES?
- In 2016, the PSU Board of Trustees established a Reserves Management Policy that seeks to maintain at least three months of available capital for unforeseen events and long-term stability. It is imperative that we practice fiscal responsibility to protect the future of PSU and uphold our dedication to providing quality education and cultivating a supportive environment for our students. For more information, visit the PSU Reserves webpage.
Q. DOES PRESIDENT ANN CUDD HAVE A $10M START-UP FUND?
- No, the incoming president does not have a $10 million start-up fund. This rumor began circulating after the April 2023 Board of Trustees meeting where there was discussion amongst trustees about whether President Cudd will have funds for any new initiatives. However, trustees did not vote on the topic and no such fund is established or earmarked.
Q. WHY DO SOME ACADEMIC UNITS RECEIVE STEEPER BUDGET REDUCTIONS THAN OTHERS?
- Academic Affairs utilizes the annual Integrated Planning of Enrollment and Budget (IPEB) process as a framework for discussing enrollment, strategies to support retention and recruitment and budget situations for each unit. Budget allocations vary across academic units based on the factors in the IPEB process, including enrollment changes and student demand. Each School/College/Academic Support Unit is responsible for determining how their budget allocation is utilized. As a result, the manner in which budget reductions are experienced can differ from one unit to another. For more detailed information about how budgets are allocated, read former Provost Susan Jeffords’ budget message.
Q. WHY ARE WE OFFERING TUITION-FREE DEGREES WHEN WE ARE EXPERIENCING BUDGET CHALLENGES?
- The cost of Tuition-Free Degree, and the Four Years Free and Transfers Finish Free programs that preceded it, are largely covered by the Federal Pell Grant and Oregon Opportunity Grant, minimizing the financial impacts to PSU. In addition, making college possible to individuals who would otherwise not be able to afford it is a key part of the university's mission and values.