On Nov. 28 Governor Brown released her recommended budget for the 2019-21 biennium. State law requires the Governor to craft a balanced budget based the state’s current means. The December 2018 revenue forecast from the Oregon Office of Economic Analysis shows that the state is expected to have $20.5 billion in General Fund revenues, which is $1.9 billion more than at the close of the 2015-17 biennium.

The Governor’s proposal is a tale of two budgets. One version is the required balanced “base budget” that divvies out funds based on current revenue projections. The second version is an “investment budget” that assumes the passage of cost containment and revenue reform next legislative session.

The two budget options may impact the University of Oregon in the following ways.

The Public University Support Fund

The “base budget” allocates no additional investment over the last biennium, keeping total operating funds for all Oregon public universities at $736.9 million. Because of the increased operating costs that occur over a two-year period, flat funding represents a decrease for the UO. Under this budget option the UO would likely consider double-digit tuition increases for resident undergraduates and potential cuts to services, programs, and workforce in order to balance its budget.

The “investment budget” increases the Public University Support Fund by $120 million for a total of $856.9 million. This level of funding would keep tuition increases for resident undergraduate students at the UO at or below 5% for the next two years. It would also preserve most recent investments in financial aid and student support programs such as academic advising and Pathway Oregon.

State Programs

The State Programs are institutions, centers, and programs operated by public universities. As opposed to providing instructional support, these programs address economic development, natural resource, and other public policy issues. Many of these programs have an industry-specific focus, matching state support with funds from the private sector and other sources. At the UO, they include the Labor Education Research Center (LERC), Clinical Legal Education, and the Oregon Office for Community Dispute Resolution through the School of Law.

The Governor’s base budget keeps funding for all State Programs flat from the last biennium, with the exception of the Engineering & Technology Sustaining Funds (ESTF), which is eliminated entirely. ESTF is a $25 million fund that is used to invest in public research universities that respond to urgent engineering education needs of Oregon’s fast-growing high tech industry.

In contrast, the Governor’s proposed investment budget increases funding for all State Programs to meet inflationary costs. It not only restores funding for ESTF, it increases it by $35 million to a total of $60 million. The UO would benefit from this increase in relation to the expansion of its research portfolio and the establishment of the Knight Campus for Accelerating Scientific Impact.

Capital Construction

The UO’s top capital investment request to the state is the renovation of Huestis Hall, a STEM and life sciences hub for 3,000 students and faculty members each year. While Governor Brown did not include funding specifically for this or any other specific projects requested by universities in either of her budget scenarios, she did set aside $225 million of state-backed bonds for university projects. The university and UO advocates will request that the UO receive $54 million of those funds for the renovation of Huestis Hall to make seismic upgrades and renovate teaching and research spaces.

Student Aid

Oregon Opportunity Grant: In the base budget, the Oregon Opportunity Grant—the state’s only need-based aid program—is kept flat at $152 million. In the Governor’s investment budget, the grant is nearly doubled, reaching $273 million. This would enable the UO to expand access to Pathway Oregon, the program that makes tuition and fees free for all four years to Pell-eligible Oregonians who enter UO as freshmen.

Sports Action Lottery: There is a provision of state law that allocates 1% of net Lottery proceeds to public universities. The UO receives approximately $1 million each biennium from Sports Lottery dollars, which provides intercollegiate athletics scholarships as well as academic scholarships for graduate students. The Governor’s base budget eliminates Sports Lottery funding entirely. The investment budget restores Sports Lottery funding at the full 1%.

Academic and Research Funding

In the base and the investment budget, the Governor allocates $12 million to fully build out a multi-hazard sensor network for earthquake early warning and wildfire prevention, monitoring, and mitigation by 2023. The UO works with other West Coast states and universities to bring this technology to the public through the Pacific Northwest Seismic Network, and UO faculty and technicians operate the network in coordination with the U.S. Geological Survey and other federal agencies. The only previous direct state investment in this work was in 2015 when the Legislature allocated $670,000 for the purchase of more seismic sensors.

In the Governor’s investment budget, additional academic and research funding that benefits the UO includes:

• $15 million in campus public safety improvement through the creation of a statewide shared services training program for higher education institutions focusing on prevention, preparedness, incident response, continuity, and recovery;
• $10 million to establish a Public University Innovation Fund at the Oregon Business Development Department (the state agency that oversees economic development activity) to support economic development partnerships with business and public universities. The Innovation Fund provides matching funds for university grant requests for applied research; and
• $5 million in funding for the International Association of Athletics Federations World Outdoor Track and Field Championships, which will take place in 2021 in Eugene. This will be the first time the event has been held in the United States.