Severity of budget cuts uncertain
An effort to rebalance the Oregon state budget to offset a $930 million deficit has created conflict in Salem and confusion at PSU. Governor John Kitzhaber announced on Tuesday a second special session will convene Feb. 25 to further negotiate budget cuts, shifts and revenue increases.
Kitzhaber and the legislature agree on $295 million of budget reductions and $284 million of resources, but still need to negotiate a $351 million shortfall for the 2001-03 biennium.
All of these changes and proposals have made it difficult for PSU to balance its budget. Jay Kenton, PSU associate vice-president of finance and planning, said the budget is up in the air and added, “We knew this was going to happen in October, and here we are four and a half months later still waiting and they’re going back and forth about what they’re going to do.”
Kenton explained cuts for this school year would be retroactive to July 1, so they decided to make cuts to the PSU budget early on so they would not get too far into the fiscal year and then have to retract funds.
Anticipating the cuts to PSU’s appropriation funds would be in the 6-8 percent range, the president and executive committee decided to reduce the budget by $4.8 million last November and December. Budget reserves were reduced by $2.5 million.
Appropriation funding allocated to PSU this school year was $70 million and next year is around $73 million dollars.
Kenton has seen cuts to PSU as low as 3.5 percent and as high as 10 percent. He said, “It’s really anybody’s guess where its going to land; hopefully it lands in the lower end.”
The budget cuts are further compounded by the fact that PSU’s enrollment was up by 6 percent for fall term and 9 percent this term. Kenton explained, “We felt we couldn’t cut academics to the same degree we could cut administrative because we need to teach these students so they have a good experience while they’re at the university.”
Administrative cuts have included restrictions of travel expenses and an administrative hiring freeze last term.
After making preliminary budget cuts, Kenton said they are now waiting to see what’s going to happen. Kenton is doing forecasts for next year based on the worst case scenario of 8-10 percent cuts and working with the deans to determine what kind of enrollment capacity they think they will have. A permanent reduction process will begin once the legislative numbers become clear.
When asked what legislative proposals would most impact PSU, Kenton said there have been so many plans circulated in the last 60 days that he can’t even keep them all straight. He explained that some of them cut the higher education budget as a whole and he’s not sure how that translates between the various institutions.
Kitzhaber announced on Tuesday that there are $295 million of reductions that are agreed upon, $120.8 million of which cut education programs.
George Pernsteiner, vice-president of finance and administration, said that PSU will be affected by reductions in support of graduate students and certain targeted programs like research, campus public services, top tier engineering and the western undergraduate exchange.
He said, “These total about $5.3 million, or approximately 3 percent of the University’s estimated beginning appropriation budget.”
Pernsteiner explained the impact of state budget reductions on PSU, its students, faculty, staff, facilities and programs can not be estimated until the governor and assembly address the remaining $351 million shortfall.
Pernsteiner added, “We know there will be reductions and that it is likely that those reductions will be at least $5.3 million for the biennium.”
Joelle Lester, Oregon Student Association executive director, said the good news is that both Governor Kitzhaber and the legislative leadership have expressed interest in increasing undergraduate instruction funding and not increasing tuition. However, she admitted that “everything is still up in the air.”
@subhead:How are PSU cuts determined?
Kenton said one of the hardest things to do is to decide where cuts need to be made. He explained, “How do you compare an administrative cut to an academic cut and make those decisions?”
In the budget process used the last three years, instructions are sent out around this time of year to all departments to formulate decision packages of what they would cut and what the impacts of that would be, given a specific amount to cut.
Kenton said they sometimes overcut to invest in areas that are critically important to the university. In that case departments are asked to also submit add packages including what they would do with additional funds.
Deans then a have meeting and prioritize which departments are most in need of funds. The results of the meeting are submitted to the provost who sits down with all the deans to prioritize on a larger level.
Public hearings are then conducted in which each vice-president reviews proposals of the faculty senate budget committee and the council of academic deans and the executives.
The final decision is made by the executive committee.
Faculty, deans, department chairs and two students are involved in the decision process. Kenton said, “All the constituent groups have some voice in those final decisions.”
PSU budget cuts already made:
Liberal Arts and Sciences: $252,000
Undergraduate studies: $37,000
School of Social Work: $39,000
Business Administration: $95,000
Education: $73,000
Engineering and Applied science: $100,000
Extended Studies: $1,000
Fine and Performing Arts: $62,000
Urban and Public Affairs: $79,000
Library: $64,000
Academic Affairs: $91,000
Grant Studies and Research: $43,000
International Affairs: $23,000
Student Affairs: $254,000
President’s office: $65,000
University Relations: $153,000
Athletics: $132,000
Information Systems: $234,000
Business Affairs: $97,000
Facilities: $213,000
Other finance and administration: $203,000