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Restructuring Portland State's Relationship With the State

The Oregon Legislature is debating whether to give the campuses more control over their finances and their futures by restructuring the state university system. The changes would enable the universities to stretch tuition revenue, control costs and better educate more students at a critical time of economic uncertainty and global competition.

Here are the main outcomes of the proposal, if approved by the Legislature:

  • Students' tuition and the interest it earns will stay at the universities.
  • Students will have more say about tuition rates.
  • The universities will have more flexibility and less bureaucracy, allowing them to use resources more efficiently.

The time is right for change. Over the past two decades, Oregon has steadily shifted more responsibility for funding its universities from the state to students in the form of tuition and fees. At PSU, the state's share of total support dropped from 35 percent in 1994-95 to 12.8 percent in 2010-11. As a result, Oregon is among the states spending the least amount per student for higher education and among those with the highest level of state control.

Under the proposal, PSU and Oregon's other public universities would receive state funding in the same way as community colleges and public schools: in a lump sum contingent on annual performance targets and progress reports to the Legislature-oversight that presently is not required of the university system. The state could no longer keep tuition interest or "sweep" tuition funding from the universities and give it to other state agencies.

Affordability will continue to be key at PSU, because the University aims to serve a broad range of Oregonians. The proposal will not change the way tuition rates are set, but students will have a more formal role in the process through a new campus review committee.

If the restructuring proposal is approved, the University will become more nimble and entrepreneurial over time, saving money and generating more income for educational programs.

For example, the proposal would remove several layers of state review and approval needed to buy a building, streamlining the process and giving PSU a stronger position in price negotiations. Universities also might be able to buy health care benefits at a lower cost than the state. (Employee pension plans would remain with the state.)

For more details on the proposal, please see the following list of resources:

Video of the February 8, 2011 forum: (when available)

President's Op-Ed:

OUS Governance Change Fact Sheet:

Oregon State Board of Higher Education document:

Oregonian story on Legislation

OPB "Think Out Loud" show on restructuring higher education:

PSU White Paper (Nov 2009):

White Papers from other campuses:

E-mail questions or comments to