PSU administration outlines budget process in campus-wide forum
Author: John Kirkland
Posted: March 1, 2011

Portland State President Wim Wiewel acknowledged the state's tough economic times, but at the same time offered a glass-half-full perspective of the University on Tuesday, March 1, at an all-campus budget forum.

Wiewel was joined by Provost Roy Koch and Vice President of Finance Lindsay Desrochers, speaking to a crowd of more than 200 faculty and staff at the Smith Center Ballroom about the current budget process.

"These are very tough times. The economy is not recovering as quickly as we want.  But at the same time, even though our faculty are underpaid and underappreciated, we're accomplishing great things. This is a better university than it was five or 10 years ago," Wiewel said.

He called PSU one of the most efficient universities in the country due to the relatively small amount of money it spends on administration compared to what it spends on instruction.

Even so, each unit of the University is being asked to identify 3 percent reductions in Education and General (E&G) funds, and is being asked to freeze 45 percent of its current fiscal year's E&G fund balance. Each unit is also being asked to institute a "hiring pause" until the budget team determines that its 3 percent reduction plan is viable.

These measures are being taken in response to Governor John Kitzhaber's proposed budget, calling for a 17.7 percent reduction in state appropriation to higher education for the next biennium. When combined with other budget factors, however, the overall impact will be close to 24 percent.

For PSU, the reduction in state appropriation, combined with a reduction in federal funds and an increase in costs will mean a $23.7 million funding gap for the 2011-12 fiscal year.

The 3 percent reductions in E&G funds will make up $4.9 million of the gap, and the use of fund balances will provide another $6.1million.  But the biggest share - $11.3 million - will likely come from tuition rate increases, which will be determined by a formal tuition advisory committee.

Wiewel said the University has a goal of increasing out-of-state enrollment to 30 percent over the next four to five years as a way of bringing in more tuition dollars. Currently, 20 percent of PSU students pay out-of-state tuition. By comparison, University of Oregon's out-of-state enrollment is 40 percent.
Despite the budget cuts, Koch said the University must maintain its strategic academic priorities, including making investments in academic programs and research infrastructure.  Koch said PSU has added faculty and advisors in key areas, which has helped PSU increase its retention rate.

What's next?  Throughout spring, the university budget team will evaluate budgets submitted by all the units, and will present recommendations to Wiewel. Campus-wide hearings on PSU budget recommendations will happen in May, culminating in a final feedback to the president on May 11. The Oregon University System will adopt its budget allocations in September.

For a more complete look at the budget process, go to the university budget office site and download a pdf copy of the presentation used in the forum.