ous budget presentation

8/6/2019 OUS Budget Presentation

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HIGHER EDUCATION

IN OREGON:

John Minahan, President, Western Oregon University

George Pernsteiner, Chancellor, Oregon University System

1

Sustaining theMomentum

The Statesman Journal Editorial Board

June 7, 2011


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Todays baseline2

Oregon public higher education is:

Successful: enrollment, retention, transferrates, degrees, research

Efficient: costs per degree, ROIs Economic Driver: research and

economic contributions significant

Focused: strategy for 2011-13: Need GRB, SB 242, to

control costs, improve flexibility, keep tuition to servestudents

Accountable: performance compact aligned with stategoals


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3

65,698

66,637 61,614

69,508

80,888

96,960

106,381

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

HeadcountEnrollm

ent

Actual

Projected

0

OUS enrollment growth outpaces U.S.3

Actual and Projected Fall Enrollment1987 through 2015

Source: OUS

Institutional

Research Services.

Nearly 30,000 more students

in last 10 years

Ten year growth for OUS continues to outpace national averages, increasing almost 40%since 2000, compared to average national growth estimates of just under 25% at public

universities.

Were Successful


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Student success: retention, degrees4

79.70%

82.40%

13,288

17,920

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

77%

78%

79%

80%

81%

82%

83%

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

DegreesAwarded

RetentionRate

OUS Indicators of Student Success

Freshmen Retention Rates Degrees Awarded

0%

Source: Oregon University System, 2010 Performance Report: Report to the Oregon State Board of Higher Education; OUS Fact Book.

NOTE: Data on degrees awarded exclude certificates.

Were Successful


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OUS cost per degree among lowest5

Education and Related Spending per Completion (2008)

This indicator provides another view of output in relation to inputhow

much it costs to produce certificates and degrees by institution type.

Source: Delta Cost Project, from the report, Complete to Compete, Oregon

Higher Education Data Dashboard

Were Efficient


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OUS cost control and efficiency measures,

ongoing6

Academic efficiencies Reduction or elimination of low-enrollment courses, reduces courses offered while serving higher

enrollments

Addressing bottleneck courses allowing students to make better progress and reduce time todegree

Improved retention and student success activities, such as advising and counseling, allow studentsto be more efficient in progress to degree, include degree audit software

Numerous partnerships with K-12, Community Colleges, and other educational providers tocreate synergies and cost efficiencies

Consolidation of academic and administrative units to garner efficiencies and reduceadministrative overhead

New processes to ensure all qualified Oregonians have access to OUS UO/SOU enrollment partnership

OUS/CC joint admissions

Operational efficiencies

Once SB 242 passes: reduced costs from assessments, risk insurance, less bureaucracy inmany areas, such as capital construction, other areas

Were Efficient


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Faculty, campuses contributing to Oregons economy

7

$203.1$221.7

$238.4$253.3 $263.6

$280.5

$317.0 $318.0$328.0

$359.8

$380.2

$0

$50

$100

$150

$200

$250

$300

$350

$400

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Expendituresinmillions

OUS Total Research and Sponsored Projects Expenditures

Source: Oregon University System, 2010 Performance Report: Report to the Oregon State Board of Higher Education; OUS Fact Book.

Oregon faculty rank 5th nationally in federal research outlays.

Were an Economic Driver


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Economic impact of universities8

OSU, PSU and UO each have an economic impactbetween $1.4-2.0 billion in Oregon; smaller campuses$75-120+ million each

The $407 million in capital construction for OUS in the

2011-13 GRB will generate 3,650 jobs across Oregon. 13,000 benefits-eligible jobs on campuses

Employ 17,000 part-time and student employees

Buy products from 8,300 vendors at $511 million in 2008-

09

13,000 OUS employees, 97,000 students, and our vendorsspend an additional $2+ billion in Oregons localcommunities.



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ETIC: meeting engineering, technologyneeds

9

Engineering & Technology Industry Council:

Produces work-ready graduates in fields that are inhigh demand

Allows Oregon employersboth current and new --to create products and services that create new jobsat all levels

Produces educational and career opportunities forOregonians

Attracts private dollars and federal dollars toOregon

Supports economic growth that will grow our tax base



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Statewides*: meeting rural andurban needs in Oregon

10

Statewides*: Doubled state investments by generating >$82 million in external research grants,

providing $190 million in economic benefits in Oregon, creating over 2,300 familywage jobs;

Create and transfer innovative products and processes that help Oregon businessescompete in global markets

Contribute to community/family well being. Annually >18,000 volunteers contribute>2 million hours to OSU Extension, reaching >2 million Oregoniansincluding onein five K-12 youthwith problem-solving knowledge

Directly serve eight industry clusters identified in the Oregon Business Plan:Agriculture, Food Processing, Forestry and Wood Products, Nurseries, Tourism and

Hospitality, Energy Efficiency, Green Building and Development, and Bioscience

*Oregon Agricultural Experiment Station; OSU Extension Service; and Oregon Forest Research Laboratory



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2009-11 LAB * 2011-13 GBB % Change

State General Fund

Education and General $601.5 $531.7 -11.60

Agricultural Experiment Station 53.5 46.6 -12.90

Extension Service 39.1 34.9 -10.74

Forest Research Laboratory 5.8 5.1 -12.07

Subtotal Operations 699.9 618.3 -11.66

Debt Service 68.7 96.4 40.32

Total General Fund $ 768.6 $ 714.7 -7.01

LotterySports Lottery 9.7 11.3 16.49

Debt Service 13.4 17.2 28.36

Total Lottery 23.1 28.5 23.38

Total All $ 791.7 $ 743.2 -6.13

* As of January 2011; includes June and September allotment reductions and $69.0M Federal stimulus

Governors Balanced Budget for OUS11

OUS State General and Lottery Fund Budgets($ in millions)

Were Focused

Stimulus reductions will alsoaffect campuses in 2011-13


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12

$768.6

$714.7

$627.3

$407.8

$364.3

$200

$300

$400

$500

$600

$700

$800

$900

1987-89 1989-91 1991-93 1993-95 1995-97 1997-99 1999-01 2001-03 2003-05 2005-07 2007-09 2009-11 2011-13

Millions

Actual Appropriation CPI-Adjusted Appropriation

0

12

OUS appropriations 1987-89 to 2009-11

Biennial State AppropriationActual and CPI-Adjusted

(dollars in millions)

Note: 2007-09 and 2009-11 include Federal ARRA funds as General Fund offset. Source: OUS Fact Book 2010, page 110; OUS Budget Operations.

2011-13:Governor's

Balanced Budget

In 2009-11 OUS share of State General Fund was 5.8%, down from 7.5% in 1999-01, and down from

15.3% in 1989-91. OUS still needs a long term solution to inadequate funding that works for all the

universities and all of Oregons students.


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State funding per fundable* FTE13

$2,878

$4,736

$2,247

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

$5,500

$6,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

FundableStudentFTE

StateFundingperFundableS

tudentFTE

OUS Enrollment Funding per Fundable* Student FTE

Actual funding per FTE Inflation Adj. Funding per FTE Fundable FTE Enrollment

$0 0

69,179

50,238

Fundable* Student enrollment increases

As enrollment has risen, per student funding has fallen.

Were Realistic

*Fundable students are mainly residents, but includes all PhD students, all EOU students (currently), and all part-time students


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Tuition cost drivers impact students14

Single largest driver of resident undergraduate tuition at all publicuniversities is the level of State support (see next slide)

The second largest driver of increased tuition is cost inflation,especially in compensation related costs, comprising 78% of OUSoperating expenditures

PEBB rates have increased 196% in 11 years: $4,800 per employee in1999-2000 to $14,196 in 2010-11. With SB 242, OUS will form anemployee-management team to explore alternative health care optionsat lower cost than PEBB.

OUS pays a composite PERS rate of ~14% of subject payroll (includingPension Obligation Bond debt service). As of July 1, 2011 will increaseto 20% (increase of 43%). This will necessitate a 4% tuition increase inthe first year of the biennium just to cover this retirement cost increase.

Total tuition plus State General Fund funding per student FTE,adjusted for inflation, has declined slightly between 1999-00 andthat projected for 2012-13


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Oregon tuition increases vs. national15

Percentage Change in In-state Tuition (2004-05 to 2009-10, not adjusted for inflation).

This indicator gauges the degree to which state colleges and universities have used tuition

as a funding source during the recent economic downturn.

Public Two-year Public Four-year

Source: The College Board, from the report, Complete to Compete, Oregon

Higher Education Data Dashboard


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Conclusions based on the Governors

Balanced Budget16

OUS will be able to maintain current momentum ofrecord enrollments, student success and researchfunding for 2011-13, with:

Governors Balanced Budget, combined with:

Tuition increases approved by Board of HigherEducation (5-9%) coupled with allowances for need-based aid to maintain access and affordability;

Continued reliance on greater numbers of non-resident students and the implementation of non-resident tuition rates at all campuses; and

SB 242 becomes law.

W Eff d A bl


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OUS planned efficiencies, cost reductions,

and revenue enhancement for 2011-1317

Across-the-board cuts

Position reductions

Program review and reduction

Collaborations in internationalstudent recruitment, ESL programs

Expanding markets

Out-of-state recruitment

Greater use of distance delivery

Utilization of nonresident tuition at all campuses

Were Efficientand Accountable

W F d


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SB 242 improves planning, services to

Oregonians18

Fewer regulations reduces delays and uncertainties

Eliminating fears of fund redirection makes planning more rational andgives the Board and presidents greater control over OUS affairs

Tuition stays on campus (including, now, interest earnings on tuition, directed toneed-based financial aid) to fund student instruction and services, financial aid

Absence of expenditure limitations allows campuses to spend revenues to servecurrent and anticipated enrollments, student support

Less overhead and administrative burdendue to a focus on performancemetrics as opposed to line-item controlsfocuses the conversation on valueadding activities and issues

Greater accountability for performance deliverables results in better services tothe people of Oregon

Were Focused

W A bl


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SB 242 performance compact focused on

outcomes, accountability19

Access and affordability

Student success

More degrees

Graduate employment success

Knowledge creation & innovation enhancement

Workforce enhancement

Educated citizenry

Efficient fiscal stewardship

Were Accountable

W A t bl


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We know where were going20

Higher education goals for Oregon:

Increase the education level of Oregonians

Deliver high quality education

Provide research to advance innovation

Contribute to the civic and economic successof Oregon communities

Were Accountable


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Conclusions21

OUS has made major strides in the last decadedespite significant financial challenges: recordenrollment, student success, and researchactivities will help Oregon rebound from therecession

The Governors Balanced Budget, single-digittuition increases, improved cost control, and SB242 will allow OUS to continue this momentumand will result in improved services toOregonians

Funding issue for higher education still needs tobe addressed for long term stability andstudent success


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Additional Data Slides22


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23

State assessments and SB242

OUS would continue to pay assessments for:

Secretary of State for audits, archives andadministrative rules = $3.2M/biennium

Ethics Commission = $200K/biennium Central Government for Legislature and Governors

Office = $1.2M/biennium

Minority, Women-Owned and Emerging Small Business(MWESB) = $159K/biennium

Treasury for banking servicesvaries depending onservices used

Still be under public records/meetings regulations

23


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24

Assessments that would no longer applyto OUS after SB 242

Risk managementOUS would be free to purchasecommercial insurance or join other self-insuranceprograms

Current costs = $23.8M/biennium

Enterprise Information Strategy and Policy Divisionassessments

Current costs = $322K/biennium DAS assessments

Current costs = $2.2M per biennium

24


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For more information25

Contact Di Saunders at OUS

503-725-5714; 971-219-6869

[email protected]

Go to www.ous.edu

Go to:

www.ous.edu/state_board/committees/governance/proposal for specific info on higher ed reform

ous budget presentation

Documents