Pres Schill on Addressing Budget Challenges – What should we cut?

Pres Schill’s email sent 12:42 PM 3/5/2019

Dear University of Oregon campus community:

Over the last few months, we have communicated with a wide variety of campus stakeholders to let them know that the University of Oregon is going into a difficult budget cycle. Vice President for Finance and Administration Jamie Moffitt has given many presentations articulating the increasing expenses that are putting pressure on our FY 2019–20 budget. We have been clear that without additional state support—a requested $120 million for all of Oregon’s public universities—we will be unable to hold resident undergraduate tuition increases at or below 5 percent and would likely be forced to look at budget cuts.

While I hope that the legislature will provide public universities in the state with the funds we requested, it is now evident that, even if the state does fulfill the request, we will need to reduce expenditures over the next two years. In addition to rising costs attributable to personnel, PERS, and health care, we are experiencing the full impact of a substantial reduction in international student enrollment. The UO enrolled large classes of students from abroad as recently as the 2015–16 academic year. Since that time, however, like many other American universities, the numbers have begun to fall off. Over the last three years, international enrollment has dropped by almost 1,000 students, representing more than $32 million in recurring tuition revenue. This decline should stabilize over the next few years as revenues slowly increase from our domestic enrollment growth initiatives.

As a result, unfortunately, we will need to reduce annual operating costs by between $10 and $11 million. While some of these reductions can be implemented immediately, some will take more than one year. Vice President Moffitt, Provost Jayanth Banavar, and I will spend the coming weeks seeking additional advice and input from campus stakeholders about how to manage this situation without eroding the tremendous progress we have made in many areas across campus over the past few years. We also want, as much as is possible, to protect programs and services that are vital to our core academic and research mission. It is my intention to come back to all of you in less than a month with a more detailed plan about how we will move forward.

Given that almost 80 percent of the UO’s general-education budget comprises salaries, the reality is that any cost-reduction efforts will affect jobs and people. I recognize that this news will cause anxiety among many in our campus community, but I believe it is important to be transparent about what lies ahead. I can assure you that we will look at every available option to mitigate the human impact of budget cuts on our campus community.

Finally, I want to address what can sometimes feel like an incongruent narrative that exists as we contemplate budget cuts at the same time that we have construction cranes busy all over campus helping to build Tykeson Hall, the Knight Campus, Hayward Field, and an addition to our student health center. The vast majority of construction projects and programmatic investments we are making across campus are the result of targeted donor gifts, specific state capital allocations, or auxiliary funding sources. The reality is that these projects and investments—which generally involve little to no general fund dollars—are the very thing that will keep the UO on a path toward excellence even as we wrestle with the volatility of state funding and international enrollment.

Thank you for your hard work and dedication to the UO. By working together, we will be able to weather the challenges that are ahead of us.

Michael H. Schill
President and Professor of Law

Please add your suggestions on what to cut in the comments. Here are some sources for information:

Staffing levels: https://ir.uoregon.edu/faculty_employees, e.g.:

UO employees can log into duckweb, go to Employee Information, Financial Transparency Reporting, and wade through reports like this:

And for info on how much the academic side is subsidizing athletics, see here.

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64 Responses to Pres Schill on Addressing Budget Challenges – What should we cut?

  1. Classified Staff says:

    Schill, who would never interfere with bargaining, announce major financial hardship that could lead to mass layoffs of (non-administrative) staff.

    Clearly, we will need to hire 15 new vice-provosts of layoffs to sort this out.

    • Doug DuBois says:

      Won’t we have to hire consultants and headhunters–I mean, talent acquisition specialists–before we can hire the 15 new vice-provosts of layoffs?

  2. uomatters says:

    Yeah, it’s a bit odd that the Board of Trustees wasn’t shown any of this information back in September, when they voted to give Pres Schill a big raise: http://uomatters.com/2018/09/trustees-meet-sept-5-7-in-pdx-pres-schill-to-get-188k-raise.html

    • Schill budget says:

      Thanks for the link. Here’s a quote from it:
      “Leaving out perks such as free housing, car allowance and research fund, the old contract was for $660K + $99k bonus after 3 years. Call it $700K a year. The new contract will be for $738K (after 2020) + $50K extra retirement + $100K expected annual bonus. Call it $888K, or a 27% increase.

      If you assume this contract will also run for 3 years and do the PV calculations, this works out to be roughly equivalent to a 10% per year raise, which seems like a reasonable target for the faculty union negotiations which start next fall.”

      This actually looks like an underestimate. Schill’s total “excellency” package looks to top $1 million a year. How many GTFs is that?

  3. budget cuts says:

    Easy: cut administrative jobs and salary. They don’t do anything valuable anyway.

    • uomatters says:

      Except keep the university functioning, of course.

    • why not make it 10% says:

      Cut mid and high-level admin management. At least their salaries. I’m at the bottom of the food chain and doing work that just gets repackaged and presented as their own to leadership.

  4. Hippo says:

    Splitting CAS up and tripling the Deanage sounds like an awesome way to trim the budget. Great thinking!

  5. Anarchivist says:

    “A major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.”

    Source: https://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html

    But sure, it’s the classified staff who are the problem, not spiraling administrative bloat. That Schill’s email was delivered during contract negotiations is surely no coincidence. The takeaway I got was: accept the crap contract we offer, don’t rock the boat, or we’ll make with the layoffs.

  6. Nah says:

    Cool threats [UOM: remainder of comment redacted because it’s a sophomoric joke about a person’s name.]

  7. Dog says:

    “an incongruent narrative”

    Yeah,

    No Shit Sherlock

  8. Anonymous says:

    The economy is booming. It’s fun to perpetually feel like you might lose your job, even in good times. Always fun at UO!

  9. Disgruntled staff says:

    I wish people realized the difference between an annual “merit” increase, raise (that classified staff get) vs. an OA raise. Classified staff are carrying the load and OAs are reaping the rewards.

    • Inquiring Minds says:

      This comment from disgruntled doesn’t make sense — and I am sorry if you work in a unit where you feel OAs don’t contribute. For the most part, OAs work hard with long hours, expanding responsibilities and no over tims. Think business managers, department managers, lab workers, health center employees, enrollment and development workers, etc. They help keep things running too!
      Please don’t feed into the false narrative that pits one group of staff should be pitted against another.
      Also fwiw OAs get about 2% merit on average. Classified step increases (which are not merit based but annual automatic increases) are more like 4% plus nominal cost of living for those classified who are not at the top of their steps (which is another problem when worthy classified staff have no room for growth!).

  10. charlie says:

    Logical conclusion of Prop 5. The notion that out of state undergrads and their oversized tuition saving the flagship always had an expiration date. JH acted if as if that date didn’t exist. Too bad so many went along with that thinking…

  11. marmot says:

    Mike Bellotti’s pulling in half a million dollars a year through PERS. Maybe somebody in our general counsel’s office, which has more than doubled in size since he was given that deal, can take a look back at the handshake contract he retired from and see if there’s a way to claw some back.

    • honest Uncle Bernie says:

      You know, the populace of Oregon would probably like to do that with all of us. Be careful what you wish for!

  12. Simplicissimus says:

    If I am not mistaken Fall enrollment peaked in 2013 and has been declining since 2014/15.
    https://registrar.uoregon.edu/statistics/enrollment-reports?report=General+Enrollment

    Administrators and OAs continued to increase (see above) in the same time frame. The state continued to dis-invest in (higher) education and the resulting revenue and expenses gap has been caught with increases in tuition. Is decreasing enrollment not a direct consequence of higher and higher tuition?

    “Something” tells me this is only sustainable with additional construction, if and only if, operating costs and administration for the existing and new buildings are financed with more enrollment, not with higher tuition.
    – What level of enrollment is needed? 30,000? 40,000??
    – Did we calculate the necessary classroom space and the number of required lecturers/instructors? Shouldn’t investment in the future not go in that direction?
    – Will all the new buildings “generate” higher enrollment or merely support existing enrollment levels? The way I see it only the Knight campus will generate teachers and attract (more?) students.

    Have we really thought this through? Accepting ferrari-seated buildings but not having the money to operate, administer, and maintain them?

    Has going independent really freed the UO from inadequate state funding, or have we made the problem worse?

    • the cake is a lie says:

      Simplicissimus has the right of it. The funding model of the University is essentially a bubble. In order to meet JH’s “ferrari” plans for being the next premier research university, it relies to a major extent on growing out-of-state enrollment in order to meet our ballooning operating expenditures. A number that we know has been declining since the high following the great recession. So, tuition goes up to make up for the decreasing revenue, and at some point we all know that the price point will be too much that we’ll see even lower enrollment, and pop goes the bubble. Or maybe the feds will finally step in on the student debt issue and put a stop to universities budgeting on the backs of students. No matter what, our current funding model is not sustainable, or particularly moral for us to pursue since we saddle our students with far more debt.

      • OMA says:

        Cake, an even more dire outcome may be if the Oregon Legislature or Governor should ever decide, they have lost control of tuition and just pass a bill to cut/limit tuition and fees. Think it is not possible? I do not think anything in SB270(?) would stop it or that you can even limit future legislators power to write bills.

        This happened recently in Canada, and the fallout has yet hit: https://www.cbc.ca/news/canada/toronto/pc-government-tuition-fees-1.4981987

        • the cake is a lie says:

          I may be more optimistic (or pessimistic as the case may be) in thinking that our state legislators lack the political will to address issues like this in any sort of definitive way. Which benefits us in that it allows us time to find a solution before a state-mandated solution is forced on us. One need only look at the PERS situation to see that doing nothing seems preferable to having difficult conversations. Anyone whose seen the steady growth of OPE knows PERS is unfortunately strangling our ability to meet our true FTE needs across all facets of operations.

          Also, while I wholeheartedly believe research must be a major part of our University’s future, I genuinely believe the over-emphasis on the University’s current research priorities will ultimately steal resources from dealing with our deteriorating ability to meet our teaching mission. Lowered admission standards, coupled with slow but steady slashing of our incredible NTTF instructors (and watch for how many are cut when the budget cuts are finally announced) and the overuse of GEs to make up for those instructors since research faculty don’t want to teach nor will they be encouraged to with our research priority, guarantees we can’t provide the resources needed to produce the best students possible, or even just help those low GPA students catch up.

          Something’s gotta give.

          • Anon says:

            Can anyone tell this community where the salary and start-up funds for the Knight-campus faculty are to come from?

            • Dog says:

              Salary money comes from the Operations Budget, so to speak, of the KC -in other words, the 500 million is being given in 10 annual increments of 50 million (and I don’t think the community at large knows this) – that money can be considered as operating budget to fund salaries in that unit.

              The issue of startup, however, is not resolved yet. My bet is that startup money comes from budgets other than those associated with the KC – I think this is wrong, but who the hell listens to dogs

              • uomatters says:

                We’ve repeatedly been told by Pres Schill that the Knight Campus will pay for its own startups and all other explicit costs out of the Knight donation and the $70M from state taxpayers. I believe him on this. (Though I’d still like to see the gift letter.)

                • Dog says:

                  like I said

                  startup is gotten way too complicated on this campus
                  so I don’t really believe what Schill says on that matter

                • Patrick Phillips says:

                  Start ups are coming from Knight Campus money. The Knight Campus is even paying for its own trash removal and window washing, so I’m not totally sure where this continuing counter narrative is coming from. The Knight Campus is investing about $50 million (if you include construction costs) in new research core facilities that will be available to everyone. Ask people who have wanted a clean room on campus for the last several decades. They have been directly involved in specifying exactly what is needed to help the UO as a whole.

    • what's a budget? says:

      The problem with enrollment increases as a budget solution is that we just don’t have the numbers. We are already pulling in more low HS GPA students than ever before and that will surely have knock-on affects to long-term enrollment (read DQ).

      We are spending hundreds of thousands on software that doesn’t work, much less reached the sales promise. If you are on campus, take a look at purchasing and contracts Purchasing Portal for more lovely contract information…

  13. Wearing Thin says:

    It’s quite frustrating and infuriating to hear budgets are tight for *some* people, while continuing to throw money at projects and efficiency software that vary rarely deliver anything close the marketing blurb that was used to make said decision. But too late, it’s already in my CV, that successful strategic initiative I initiated, so now you lesser minions can go forth in excellence and make it work, thus proving the narrative a success and a testament to our visioning!

    • Inquiring Minds says:

      Speaking of “efficiency software,” how about inefficiency software, AKA Concur? I would love it if a survey was sent out to determine whether various departments and units have had to increase classified and OA staffing to manage travel. I may be wrong but I suspect that on average most units are increasing personnel costs in this area. (This is separate issue from the impacts that faculty are feeling)

      • Dan says:

        Concur is the best evidence of waste and poor decision-making I have seen in a long time. It’s waste that keeps on wasting.

  14. thirsty says:

    The well is only dry if you don’t work in Johnson Hall on $200,000 or more salary. It’s dry for the rest of us because they piped it all to their own faucets. Whoops guess now there’s a money drought.

    • anon and on and on says:

      The irony, of course, is that the lower reaches of the OA class will be hit the hardest proportionally, as the only elements outside the ‘core mission’ of the university who lack collective representation and thus protection. People seem to forget that numerically, those OAs (whom many faculty appear to assume are part of SEIU) are very widespread and heavily exposed, doing essential management work at lower salaries than most of us realize. OAs and JH administrators are not at all the same thing, even though they sit in the same bucket in some structural ways.

      • former duck says:

        You know, at some colleges and universities there are only about five individuals on campus who aren’t part of a bargaining unit…(thinking emoji)

      • Calling out BS says:

        Most, if not all, of this IAs should be classified. Constant manipulations and misrepresentations result in positions falsely made OA when they shouldn’t be.

  15. honest Uncle Bernie says:

    I hope the UO faculty, perhaps through the UO Senate, will have constructive suggestions to make about how to deal with the budget shortfall. Is the UO Senate budget committee on this?

  16. Eternal Skeptic says:

    Orwell always comes to mind when Johnson Hall sends out communiqués about the (latest) Budget Crisis.

    “The war is waged by each ruling group against its own subjects, and the object of the war is not to make or prevent conquests of territory, but to keep the structure of society intact.”

  17. appeal to authority says:

    I think we should ask Thomas Sowell (arguably our nation’s greatest living economist, present company excepted) to render advice. A small honorarium would be appropriate, but I believe he’d gladly do it for free.

    • Doug DuBois says:

      Agree that Sowell is our greatest living economist–and one of our most lucid and honest and empirically rigorous. But that would make him a difficult advisor. His unvarnished catalogue of the manifold factors that create inequality would not sit well with contemporary campus culture. Neither would his intolerance for BS. Provocative idea, though.

    • Anonymous says:

      Interested to hear the arguments for the claim Sowell is our greatest living economist. To focus the argument, why greater than every American Nobel-winning economist?

      • appeal to authority says:

        Honestly, that was mostly tongue-in-cheek. But as an amateur fan of economics, he’s my favorite.

        As for Nobel-winners, well, here’s Krugman predicting global economic catastrophe immediately after Trump’s 2016 win. Oops.

        https://www.nytimes.com/interactive/projects/cp/opinion/election-night-2016

        • Fishwrapper says:

          Winter is coming, just not as quickly as that prize-winning scribe predicted…

          • appeal to authority says:

            Agree, though not perhaps for quite the same reasons. I think our nation’s most famous economist, or one of her age-eligible comrades, will win in 2020. They’ll kill the Trump bump with a vengeance, and we will reap the leveled-down equality we so richly deserve.

            My family will be fine, as we have a nice cabbage patch in our back yard…

  18. Demotivated, again says:

    How will donors feel when their buildings are filled with empty classrooms and no teaching staff?

  19. New Year Cat says:

    Would donors know those classrooms were empty, or would they just see the nice lovely builings with their names (temporarily, probably) on them?

  20. thirst says:

    I can think of so many ways we could fill that $10 million gap Schill is concerned about. Half his salary, a million off a coach or two, $100,000 off the salaries of the 10 other highest paying positions in the UO system (leaving those people with “only” $100,000+ in their salaries), and you’d start to be talking real money. But you can bet it’s the lowest-paid and/or non-unionized workers who will get the shaft….

  21. Plan to save millions says:

    Cut all top administrators including Schill. Replace them with minimum wage employees, who would equally be capable of farming out any of their important decisions to consultants and lawyers.

    • uomatters says:

      This is an interesting idea. Perhaps we should also replace all the faculty with student workers?

      • Another interesting idea says:

        Not very respectful of you, the students paid to teach your classes are more properly called “Graduate Teaching Fellows”. Student workers are the ones faculty send to get coffee when the GTF’s are too busy teaching.

        • uomatters says:

          Either you missed the irony in my comment, or I am missing the irony in yours.

        • erudite wannabe says:

          I think “slave” is the word you’re reaching for. (Too soon?)

        • Cut the crap says:

          Pardon me, but the 200+ person 300-level undergrad class I teach 4 days a week is done by a tenured, very research-active 1.0 TTF (moi) and not the GTF assigned to assist me. In fact, the GTF who in theory helps me out is a cranky 26 y.o. who boots all of the student emails with questions my way rather than attempting to answer them first as he is supposed to do.

          • Thank you says:

            Very generous to let both your department head and your GTF walk all over you, you’re one of the good ones.

        • Inquiring Minds says:

          A small and non-snarky clarification if you don’t mind. Since about 2015, the term was changed to Graduate Employees, not GTFs. This was at the request of said employees after bargaining it, and their position that they should be recognized as employees. Secondly our student workers are ALSO valuable contributing to the mission of our department. And we trade off getting the coffee! (I know you were joking, just speaking up for the un-represented on this blog)

          • Second Second Assistant Quacker says:

            If you can’t get more money, at least go for the better title.

            • Assistant Associate Vice Dean of Excellence #32 says:

              I’d rather keep my crappy title and huge pile of money, thanks very much.

  22. NTTF says:

    OPINION
    The Real Reason College Tuition Costs So Much
    By Paul F. Campos
    April 4, 2015
    https://www.nytimes.com/2015/04/05/opinion/sunday/the-real-reason-college-tuition-costs-so-much.html?_r=0

    “By contrast, a major factor driving increasing costs is the constant expansion of university administration. According to the Department of Education data, administrative positions at colleges and universities grew by 60 percent between 1993 and 2009, which Bloomberg reported was 10 times the rate of growth of tenured faculty positions.

    Even more strikingly, an analysis by a professor at California Polytechnic University, Pomona, found that, while the total number of full-time faculty members in the C.S.U. system grew from 11,614 to 12,019 between 1975 and 2008, the total number of administrators grew from 3,800 to 12,183 — a 221 percent increase.”

    • Deplorable Duck says:

      It’d be useful and interesting to know how much of this growth is due to the grievance bureaucracy–administrators dealing with Title IX, diversity, gender, race, other protected classes, and other minutiae of political correctness.

      That’s not to say that universities should not be allocating their resources this way. They have to play the cards that they’re dealt, especially when it comes to adopting a prudent defensive stance against litigation.

      But it would be useful to know what political correctness is costing us as a society. Every microaggression addressed, every lawsuit defused, signifies, in the final sense, a theft from those who wish to learn and are not educated, those who need a degree and end up saddled with crushing debt.

  23. dreiling says:

    It is time to resurrect and add to the fiscal planning debate an Athletics Dept. tax and consider deficit spending from unrestricted reserves, at least until the PERS tier one bubble passes in the next 8-10 years. This needs to be on the table. Many legislators, the office of the Governor, and much of the public see the UO not as an academic institution under constant fiscal woes, but as an institution whose elite board lobbied for independence and private development, backed by the Knight family, and as a fairly successful athletic program often mired in excess and fraud. I have not seen Schill address this strategic and moral quandary. How does one expect Salem to boost support to the UO when perceptions of athletic dept lavishness and fraud overwhelm other important facts about the university? That ANY subsidy continues to athletics, no, that athletics is not modestly taxed and recompensing academics, is a stain on the funding and development model of the UO, especially obvious when we are told to anticipate cuts to the core mission of the university. The number of legislators I talk to that are sympathetic to concerns raised by faculty, staff, and students are also embarrassed by the excesses (perceived and real) in athletics. I recognize that the UO is not the worst (by far) of the big athletic money pits in higher ed, but we are uniquely (and poorly) positioned in a state that chronically underfunds its flagship U. Besides, perception is a major part of the game here. Instead of defensiveness, or the brash notion that athletics pays for itself, Schill and Trustees could do much to alleviate sour attitudes in Salem by advancing a rebalancing plan between athletics and academics. Otherwise, this well-established perception of the UO in Salem will continue to cost our university greater financial support from the state.

    • your only hope says:

      Nothing stopping faculty from applying for at-large Board seats. If you don’t get them, apply for a new Governor. You don’t have many other options unless you can get something like HECC to flex their muscles.

  24. Andy Stahl says:

    Oregon appears to lead the nation in higher education appropriations increases between 2012 and 2017 (measured as a percent). Admittedly, % comparisons can be deceptive, especially if one is starting from a low level. More tellingly, Oregon is not out-of-line in its higher ed spending per $1,000 of state personal income, ahead of Washington (which is much richer) and on par with Michigan (U.S.News World Report flagship school ranking #27), Minnesota (#76) and Wisconsin (#49). Do those three states get more bang for their higher ed buck than does Oregon (#102)? If so, why?

    http://www.sheeo.org/sites/default/files/project-files/SHEEO_SHEF_FY2017_FINAL.pdf

    • honest Uncle Bernie says:

      Andy, here’s another thing. In those states, the “flagship” campuses get much more money per student from the state than do the other campuses. In Oregon, the money is much more evenly distributed. UO actually is usually at or near the bottom in state subsidy per student, when you add everything up. So, if UO is the “flagship” in Oregon, it sure isn’t treated as such by the state. Or maybe you could say that Oregon has never wanted a real flagship campus. If so, the state has gotten the results it seems to want.

  25. dreiling says:

    Andy, the big difference between the UO and these other flagships is found in the decades of federal government spending that made their medical, engineering, and social and natural sciences very robust. All four of the big public universities that you mention rank in the top 20 recipients of federal money. So, no, it is not that they get more bang for their higher ed buck, it is that they get more public money, (a lot more), period. https://247wallst.com/special-report/2017/03/22/universities-getting-the-most-money-from-the-federal-government/5/

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