OUS approves tuition increase
The Oregon State Board of Higher Education met last Friday and approved, in principle, the proposed tuition surcharge plan, as well as a property sale and purchase by Portland State University.
If Oregon voters don’t pass a proposed income tax surcharge this January, Oregon University System schools will face a budget shortfall of approximately 4 percent. In order to make up that difference, they’re looking to have universities assess a tuition surcharge until funds increase.
The problem is when to assess the surcharge. If the increase begins this coming winter term, and the income tax increase passes, Portland State would need to reimburse students the surplus, which would mean high administrative costs. The board will finalize the implementation of the surcharge at the Nov. 15 meeting.
Likewise, waiting to implement the surcharge complicates things, as well.
“My business people don’t like it because 60 percent of our students get financial aid, and they’d like to collect it in the beginning when the aid is disbursed,” said Jay Kenton, vice president for finance and administration at Portland State.
Kenton would like to see the Legislature make good on hints that they would like to find another way of addressing the shortfall if the income tax surcharge doesn’t pass.
“If the Legislature is at all willing to consider another solution then we should give them the opportunity,” Kenton said.
By the time of the legislative session however, it may be too late. By then projections for the 2004-2005 school year will be on the minds of legislators.
One solution that other universities in the state are looking into is the idea of capping enrollment. But Kenton doesn’t feel an enrollment cap is an option.
“We feel kind of a moral obligation to serve the demand for educational services in the metropolitan area,” he said.
And demand is high.
“This is unprecedented in history as far as I know, when the state’s economy is depressed when the demand for education is at an all-time high,” Kenton said.
With that, the university system is looking for more revenue options.
“Interest earnings is something that’s really interesting,” said Kristen Wallace, ASPSU president.
Portland State has at any given time a number of funds on hand to invest for interest.
“Right now the state gets that funding, so the OUS (Oregon University System) is asking that we get that funding,” Wallace said.
Interest earnings are part of a package the university system will present to legislators this legislative session, but Kenton is unsure whether it will fly.
“In the past when we’ve tried to do that they’ve said no, because it would basically be taking money out of their pocket,” he said.
The property sale approved at the meeting is a car-pool lot located kitty corner to the Urban Center to the south and east. The sale will generate $5 million for the construction of the new engineering building and will be matched by state g-bonds for a total of $10 million toward the project.
Portland State will acquire a large warehouse and some covered, outside storage in the North Macadam district through the property purchase approved by the board.
“It’s kind of speculative investment in some sense,” Kenton said.
At some point in the future, Portland State plans to develop the property for use in joint programs with Oregon Health Sciences University, but in the interim the buildings will be used for industrial science and engineering projects.
This new acquisition will be in line with Portland State’s plans for the University District.
“We’re about to begin the process to expand the district boundaries to touch the north Macadam district,” Kenton said.
That process will likely last a year or more and extend the boundaries of the district to the south and west.
“We’re currently doing a study on the usage of every block in the proposed district,” Kenton said.
After that, the plan will go to public hearings and eventually the city council for approval.
