In order to close the $18 million budget deficit by July 1, 2025, divisions (also known as "Major Functional Units") at Portland State were given financial sustainability targets. These targets can be reached through a combination of budget reductions and immediate net revenue growth. Below are the preliminary targets as well as the methodology used to determine the amounts.
Keep in mind that this work is iterative and as the process moves forward, the targets are subject to change.
Key Areas of Financial Adjustment
The targets in each of the four key areas of financial adjustment were arrived at by first considering what could actually be achieved through the activities planned for each of the areas.
Retirement ($2 to $4 million): We considered the size of the targeted employee population that might be eligible, looked at prior year data on retirement from that population, assumed a slight increase in the number of retirements through the incentive and finally assumed a percentage of positions that would need to be refilled.
Operational Excellence ($2 to $4 million): We looked at all of the budgeted staff positions, reviewed how the number of budgeted Full-time Equivalent (FTE) had changed over time, considered current vacant positions, and possible savings from technology, other new solutions and one-time items that were built into the FY25 budget.
Programmatic Revitalization and Curricular Stewardship ($8 to $12 million): We used the Gray DI and Ad Astra data as a starting point to identify potential savings. For additional information on this process, please visit the Academic Affairs Financial Sustainability Updates webpage. The webpage also includes updates on Retirement Incentives and growth opportunities within Academic Affairs.
Net Revenue Growth ($1 to $3 million): We used opportunities for growth that were identified through the summer Gray DI workshop to estimate potential revenue growth for Academic Affairs. We are also actively working on ideas for summer session revenue generation.
Determining Divisional Targets
Using the amounts determined for each of the four key areas of financial adjustment, the next step was to figure out how they applied to each of the divisions. Three of the key areas are primarily achieved through adjustments in Academic Affairs while Operational Excellence spans all divisions including Academic Affairs. For Operational Excellence, we once again analyzed what could be achieved using the methodology listed above but on a divisional basis. Below are the resulting divisional targets.
Division | Target ($) | Current E&G Budget |
Academic Affairs | 16,000,000 | 237,660,643 |
President’s Office* | 330,000 | 10,237,236 |
Research & Graduate Studies | 214,000 | 12,685,862 |
Enrollment Management | 429,000 | 9,129,775 |
Finance and Administration** | 960,000 | 50,802,824 |
Foundation | 100,000 | 6,502,936 |
Athletics | 58,000 | 2,391,272 |
University General (insurance, utilities, debt service, etc.) | 243,000 | 27,176,964 |
*The President’s Office Division includes University Communications, Global Diversity & Inclusion, General Counsel, Government Relations and Institutional Research in addition to the Office of the President
**Finance and Administration includes Information Technology
The university's approach to addressing the budget deficit reflects a strategic effort to minimize disruption while maximizing long-term sustainability. This method allows for flexibility, encouraging divisions to adaptively meet their goals without imposing blanket cuts that might compromise core activities and institutional stability. Focusing on four areas — retirement incentives, operational excellence, programmatic revitalization and net revenue growth — addresses immediate fiscal needs and the university's ongoing commitment to financial sustainability.