University Leaders Worry Money Will Be 'Swept' Away By Legislature
Author: Rob Manning at OPB
Posted: January 4, 2011 

Oregon’s public university leaders will be asking lawmakers for more money and more control when the legislative session opens next week.

But Rob Manning reports on what college leaders are most afraid of in the near future – the possibility that lawmakers will spend student tuition money to fill budget gaps in other state agencies. 

Even in good budget years, university leaders have to scrap for money in Salem.  And when general fund money is scarce, universities are occasionally forced to defend money that they’ve collected themselves, from tuition-paying students.

Monday, on OPB’s Think Out Loud, Portland State University president, Wim Wievel fretted that lawmakers could take -- or “sweep” -- tuition money, this year. He said that wouldn’t be possible under a university-backed proposal headed to lawmakers.

Wim Wievel: “The big difference is that we’ll actually be able to spend this tuition on educating students, instead of having it sit in reserves, that can be swept by the state, as has happened regularly. But what people should really be paying attention to is that right now – the tuition has always been at risk of not being used for education.”

For months now, university leaders have heard that any “reserve funds” from tuition will be theirs to spend.

Senate President Peter Courtney made that point to anxious university presidents at a board of higher education meeting, last June.

Peter Courtney: “I don’t want to mislead any of the presidents here, and I’m making eye contact with some of them, but the body language isn’t good, but at least some of them seem relieved that we’re not going to touch the reserves.”

Courtney’s reassurance came before the latest round of state budget cuts, which cost higher education upwards of $17 million in August.

University leaders have proposed basically replacing funds from that cut with tuition money they’ve already raised – thanks in part to growing student enrollments.

At last month’s Emergency Board meeting, lawmakers elected not to let the colleges use that money. But they didn’t vote to “sweep” it to spend on other things, either.

Democratic representative Betty Comp argued for holding onto it, until the coming legislative session.

Betty Comp: “The legislative fiscal office is recommending deferring this portion of the request due to the uncertainty surrounding the state budget and revenue situation.”

Three Republicans disagreed with holding the money, including state senator, Fred Girod.

Fred Girod: “The question is ‘do we give it to them now, or do we give it to them later?’ – I don’t see any reason not to give it to them now, and there’s a lot of angst that this money could be swept.”

Legislators who favored the delay say it’s a complicated issue. They say the delay would put more higher ed money on Oregon’s books for 2011, to help satisfy a spending requirement tied to federal stimulus funding.

Legislators all but promise the money will come back to the universities in March. If it does, university presidents say the hardship is manageable.

Oregon Institute of Technology president, Chris Maples, says the main problem is he hasn’t been able to add faculty.

Chris Maples: “My assumption is that we’ll still be able to do that hiring, but we’ll be a little behind the curve, and when you compete for faculty, you compete nationally with other universities. We may not get the best choices.”

But leading legislators say the other reason for the delay is they want to see the next revenue forecast before they do anything.

That suggests the money could be used to fill other budget gaps if revenues are down again. University presidents say if that happens -- and they’re left with that $17 million hole -- faculty layoffs, bigger class sizes and program cuts could be the result.

Whether there’s lasting hardship over the tuition money or not, the cloud of uncertainty may have a silver lining, for those who favor more independence for Oregon’s public universities.

OIT president, Chris Maples says the debate over tuition spending can frame the broader debate. 

Chris Maples:  “It certainly is a real-time example of one of the major differences of moving the universities out of state agency status, and giving us what I refer to as ‘additional operational flexibility.’ It is a way of directly showing that tuition is used for student education.”

Legislative leaders say that with each passing day, confidence grows that the tuition money won’t be needed to bail out other state agencies. But lawmakers won’t know for sure, until the next revenue forecast comes out in six weeks.