Dear OSU Community:
This message summarizes the current status of the budget projections for the next biennium based on the legislature's final budgetary decisions.
Although the legislature has adjourned, it is still difficult to describe how OSU will be affected by legislative appropriations because Oregon's financial picture remains uncertain. In addition, the Oregon University System must decide how to allocate budget reductions among the OUS campuses.
In short, the Oregon Legislature appropriated $807.5 million to the Oregon University System for the 2009-11 biennium. This figure represents a reduction of 13 percent from the level needed to maintain current programs. Over the next two months OUS will determine how to allocate these funds among the member institutions.
Specific legislative budget reductions that will affect OSU programs
include:
- an 11.5 percent reduction to Statewide Public Service Programs (the Agricultural Experiment Stations, Extension Service and Forest Research Laboratory);
- a 5 percent reduction to campus public service programs, including the Veterinary Diagnostic Lab, Institute for Natural Resources, and Oregon Climate Change Research Institute;
- a 15 percent reduction to the Engineering Technology and Industry Council (ETIC) and other targeted engineering programs;
- a 15 percent reduction in targeted research programs, including signature research centers.
Despite serious cuts to operating budgets, the legislature supported several capital construction and/or deferred maintenance projects for OSU, including:
- $24.87 million for Strand Hall deferred maintenance and upgrades;
- $6 million in bonds to match funds raised by OSU for the College of Health and Human Sciences Hallie Ford Center;
- An additional $7 million needed to match funds already raised by OSU for the Student Success Center;
- $4 million for Education Hall deferred maintenance;
- $8 million for a biofuels demonstration project.
We face a great deal of uncertainty regarding our actual budget for
2009-11 and beyond, given state and national economic conditions. More than $700 million of the revenues appropriated by the legislature depend upon tax proposals that may be referred to the voters and thus are not a certainty. Future revenue forecasts could show additional declines from the May forecast upon which the budget is based.
The State of Oregon and the Oregon University System are still considering other cost-saving measures, including furloughs, which could have an effect on operations. A final decision on tuition increases, which will have an effect on the budgets of OSU and other institutions, will be reached by the OUS board on July 10.
Given the scope of these reductions, OSU must make substantive changes in administrative processes, course offerings, and services. During the last few months of the 2007-09 biennium, the University absorbed a cut of 5 percent that was mitigated by fund balances that are no longer available. To meet reductions of 13 percent - or greater - requires OSU to achieve greater efficiency, focus on key areas relevant to our strategic plan, and continue to develop new sources of revenue.
A University leadership team has been working on proposals that will help us manage these reductions in a thoughtful, strategic manner. Some of the proposals were shared at the open forum on June 2 sponsored by the Faculty Senate and are available on OSU's State of the Budget web page at:
http://oregonstate.edu/leadership/budget/. Please share your suggestions for action with us via email:
osu.provost@oregonstate.edu.
Provost Sabah Randhawa and I encourage you to look through the proposals and offer suggestions about further ways the University can economize and yet still thrive as a top teaching and research land-grant institution. We anticipate reaching decisions on some of these proposals within the next month and will communicate those to the campus at that time.
While we are managing our affairs in the face of considerable uncertainty regarding state funding for the next biennium, ours is a community that has worked through difficult times in the past. All actions that are taken to address our budget difficulties will be made in as public and transparent manner as possible. We will make every effort to recognize and minimize the hardship that necessary actions will have on individuals, programs and services. Thank you for your support and understanding.
Sincerely,
Edward J. Ray
President
Oregon State University
