On Friday the PSU Board of Trustees approved the university’s budget for the 2024-25 fiscal year, which begins on July 1, 2024.
One of the major challenges that I was tasked with when I was hired as PSU’s president was to put the university on a path toward financial sustainability. Since I joined PSU in August — about 10 months ago — we have made swift progress in crafting strategies that will guide us toward that path.
I have heard from employees who have been with Portland State for many years that they are skeptical of the annual budget messages from leadership about deficit and cuts. I am hopeful that we can move forward together with more trust, transparency and a shared understanding of the challenges we face as we work together to address them.
As we have shared with you this year in our fall and winter budget forums, Portland State faced a deficit of $27 million for the 2024-25 fiscal year, after accounting for tuition increases. The budget approved by the Board of Trustees today plans to use $18 million of our Education and General (E&G) reserves, putting our reserves below the board minimum threshold. The board approved the use of reserves to give us time to implement our strategies, but they have made it clear that future budgets should not rely on reserves. I fully agree that it is time to operate with a healthy budget and am grateful for their faith that the university will be able to come together and build a long term financial sustainability plan by fall.
While our reserves will address the majority of our budget deficit, our E&G expenses will see a decrease of about $10 million — or 2.7% — from current spending. I want to be clear that this is not an across-the-board cut. The budget prioritizes investments in compliance, enrollment and revenue-generating activities. We encourage unit leaders to share how they arrived at their budgets and discuss the impacts of those plans with their faculty, staff and students.
As we work to implement the FY 2024-25 budget, we are already actively pursuing strategies to strengthen our financial position, allowing us to innovate and grow together. Our strategic plan, which will be presented to the Board of Trustees in October, will guide our decision-making. The guiding commitments and aims drafted by our strategic planning workgroups will help drive our program revitalization efforts, beginning this summer with an in-depth data analysis of our programs. Our path to financial sustainability also includes centralizing and standardizing some of our duplicated administrative practices, providing more consistent support to students, staff and faculty, and creating better career pathways for employees. In November I will present the board with a financial sustainability plan.
Our goal is to bring an end to this long season of yearly budget cuts and to position ourselves for a more stable and innovative future. I am committed to continuing the work toward building a participatory budgeting process at Portland State that values shared governance and transparency.
I look forward to the work we will do together to ensure a bright future for PSU.