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President Wiewel calls for input on budget planning
Author: Office of University Communications
Posted: November 6, 2013

A letter from President Wiewel,

This academic year presents both opportunities and challenges to Portland State that I want to bring to your attention.
    The reTHINK PSU initiative is a university-wide effort to deliver an education that serves more students with better outcomes while containing costs through curricular innovation, community engagement and effective use of technology.  ReTHINK efforts to date include the Provost’s Challenge to reward innovative ideas from faculty and staff and the four-year degree guarantee to help students save money and graduate on time. The next effort is to analyze all of our operations to identify ways to increase revenues and cut costs to balance a $15 million projected shortfall in our 2014-15 budget. That amount represents about 5 percent of our education and general fund budget.  
    In the past, we have tapped our reserves and made across-the-board cuts to balance PSU’s budget. We are taking a more far-reaching approach this year by starting discussions early to bring the campus into a deeper conversation about our future.
    The goal is to make strategic budget decisions that not only balance our budget but put us on a sustainable fiscal path.  By creating a sustainable revenue and spending plan, PSU can make the kind of long-term investments in academic programs, faculty research and student support that are essential to our growth and success.
    Some have raised questions why PSU has a $15 million budget gap after the Legislature allocated more money to higher education this year. The Legislature reduced future pension costs and allocated state money to “buy down” tuition increases, which does not result in a net increase to universities. The relatively small increase in state support still leaves us millions of dollars short of what we received from the state five years ago.
    Tuition is by far our main source of revenue. Increases in tuition over the past five years have been substantial, but they are more than offset by the drop in state support, increased   wages, PEBB health insurance costs, PERS pension benefits and increased costs in our supply and service expenses. The gap is $15 million. In the past, we have tapped reserves to avert a deficit. Our fund balance has been sharply reduced and is no longer an option because sound fiscal practices require that we set aside 5 to 15 percent of our annual budget for cash flow and contingencies.        
    University leaders are studying six areas:
    •    Administrative restructuring
    •    Academic priorities
    •    Energy and real estate savings
    •    Student services savings and efficiencies
    •    Staff and benefit savings
    •    Savings in other areas such as athletics and public safety

    No decisions have been made, and the review process will take several months. Here’s where we need your help:     We have created a budget feedback link on the PSU Finance and Administration website at http://www.pdx.edu/fadm for your suggestions and comments on specific savings or revenue opportunities. This website also will be your source for background and developments as university leaders consider the six areas above before making strategic budget recommendations next spring. In addition, PSU’s schools, colleges and administrative units will schedule meetings in the upcoming weeks to discuss proposals, and we also will use our shared governance channels to engage all of our campus stakeholders. I will provide further updates when appropriate.   
    Thanks to your good work, Portland State has become a vital urban university that anchors our region with a rising national reputation. These deliberations will help us focus on our future. 

Wim Wiewel, President
November 6, 2013