Gov’t Relations Office update on funding, tuition increases, etc.

That would be Oregon State University’s Jock Mills and his ever helpful Government Affairs Office. I have no idea what UO’s lobbyists think. Does anyone?

2018 Short Session Preview

This update provides a brief preview of the 2018 legislative session including appropriations and policy bills.The 2018 legislature will convene on Monday, February 5. Under the state constitution it is scheduled to adjourn no later than Sunday, March 11. The process will run at a rapid pace with little or no time for missteps or opportunities for amendments. Bills must be scheduled for a hearing by the fifth day of the session, and they must be approved by the committee to which they have been referred no later than four working days later – Thursday, February 15. In comparison, during the long sessions, committees have over two months to consider bills before referring them to the floor for consideration. One benefit of the short fuse is that the number of bills that must be tracked quickly becomes manageable.

Legislative Appropriations

Budgetary issues will be addressed in a single omnibus appropriation bill that is not subject to the committee schedule. The contents of the appropriation bill will, however, be subject to the January 23rd special election when voters will determine the fate of Measure 101 which would affirm the legislature’s decision during the 2017 session to enact “temporary assessments to fund health care for low-income individuals and families, and to stabilize health insurance premiums.” If voters reject the measure, the legislature will need to re-balance the state budget to account for a $200-300 million shortfall that would result.

Legislators have yet to fully understand how changes in the federal tax code will affect state revenues since Oregon’s tax structure is connected to federal provisions that have changed. The House and Senate Committees considered that matter last week and remain uncertain about whether the Federal revisions will add to, or reduce, state revenues. A preliminary analysis indicates state corporate and individual tax revenues may fall by about $100 million. Even if fully understood, the legislature will only be able to change the impact of the federal provisions on state revenues for the second year of the biennium, if they can affect the impact at all. More will be known about state revenues when the State Economist issues his quarterly forecast Tuesday, January 16 (today).

OSU is pursuing two provisions for inclusion in the omnibus appropriations bill:

  • Expansion of the OSU-Cascades Campus – In December, Governor Brown issued a letter to legislative leaders seeking a state bonding package that includes $39 million for a second academic building at OSU-Cascades, $40 million for the Knight Campus for Accelerating Scientific Impact at the University of Oregon, and $9 million for a new fieldhouse at Eastern Oregon University. The three universities are working together on a unified effort to secure approval of the three projects, each of which will include elements constructed of advanced wood products such as Cross Laminated Timber (CLT). Click here to see the Governor’s letter to the legislature, click here to see a letter of support from the Higher Education Coordinating Commission (HECC), and click here to see materials presented by all three universities during committee hearings last week. The state’s capacity for capital bonds is not directly affected by what happens with Measure 101, though some legislators have linked the two.
  • Matching funds for a DOE Marine Energy Grant – OSU will be seeking $4.6 million in general fund expenditures to match $35 million in funding from the U.S. Department of Energy which OSU successfully competed for last year. OSU is seeking additional match-funding from industry and philanthropy. For a description of the marine energy initiative, click here.

Policy Bills

Final bill drafts will not be available until later this week, but a number of policy bills affecting OSU and higher education have surfaced, including:

  • Tuition Setting – In response to a contentious tuition-setting process in 2017, Rep. Diego Hernandez (D-Portland) is working with the Oregon Student Association to introduce a bill that seeks to alter both the process and the standards by which public universities consider and approve tuition increases. The draft legislation would require universities to file a report with the Higher Education Coordinating Commission (HECC) justifying any increase above 3% on resident, undergraduate students. It would also prescribe a uniform committee process across all campuses for setting tuition and would codify the criteria Governor Brown used in a letter to the HECC in April of 2017 regarding tuition increases that were over 5% last year. (The Governor wrote this letter after proposing to flat-fund the universities in the budget she recommended to the legislature.) Without considering the level of funding provided by the state, the bill language would require the HECC to reject any tuition increase above 5% that does not meet these criteria.

While the universities agree with students that last year’s process did not work well, the primary reason universities sought tuition increases over 5% last year was Governor Brown’s recommended budget that provided no increases for the current biennium. Fortunately, following joint and active efforts by students and the universities throughout the 2017 session, the legislature provided a $70 million increase over the Governor’s recommended budget, and all but one of the universities that had sought tuition increases over 5% were able reduce their increases below 5%.

The bill does not address the single most important factor that has driven tuition decisions on Oregon’s campuses: legislative appropriations have simply not kept pace with state-mandated costs such as retirement and health benefits. If legislators were truly interested in reigning in tuition increases, they would apply the criteria they are seeking to impose on universities to their own funding decisions.

  • Deferred Action for Childhood Arrivals (DACA) – The seven universities are working with legislators to seek a technical change in statutes to ensure that university-based financial aid can continue to be provided in a manner that reflects statutory policy for the Oregon Opportunity Grant program.
  • Cap & Invest/Clean Energy & Jobs – In the months since the 2017 legislature adjourned, the House Energy & Environment and Senate Environment & Natural Resources Committees have been working on revamping legislation considered during the 2017 session that would establish a program by which large emitters of carbon dioxide would participate in a market to counterbalance and reduce their emissions. The bills under consideration in the 2018 session include a regulatory threshold of 25,000 tons of carbon dioxide produced annually. An entity over the threshold would need to purchase – via auction – emissions allocations. The OSU cogeneration heat plant, which became operational in 2010 and significantly reduced the university’s overall carbon output and reliance on coal-fired electricity, exceeds the 25,000 ton regulatory threshold by about 15,000 tons. OSU is working with Oregon Health & Science University, which is the only other state-based institution that exceeds the regulatory threshold, to consider ways by which both institutions can meet the goals and intent of the legislation. The bills are generating a high level of positive and negative interest among environmental and business interests.
  • Authority to conduct hemp research – OSU is working with the hemp industry, Farm Bureau, and Oregon Department of Agriculture on legislation that would enable university research on hemp cultivation and utilization.

More bills will surface in the coming weeks. If you have questions or concerns about legislation, please do not hesitate to contact us.

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