Independent boards fail to deliver, so universities ask state for $100M

The tit-for-tat from the Duck boosters who wanted the state to give them a Board they could control was their promise that private donations would soar. They haven’t – except of course for sports facilities like the Mariota worship center, the new softball egofice, and the Hayward Field tart-up. The state, on the other hand, has been increasing its higher education support, albeit by small amounts and from a very low base. Now the university presidents are going back to the state for another $100M, mostly to cover PERS increases resulting from the failure of HLGR’s Bill Gary and Sharon Rudnick to convince the state supreme court that Kitzhaber’s reform package was legal. Andrew Theen has the report on the new ask in the Oregonian, here:

Last summer, lawmakers approved $665 million in general support for the universities, a 27 percent increase over the 2013-15 biennium. Officials also dramatically increased funding for the Oregon Opportunity Grant, the state’s largest financial aid program for needy Oregonians.

The $100 million request represents a 15 percent increase over current levels.

Universities say the $100 million would help protect students from the burdensome costs associated with increased Public Employee Retirement System obligations that will hit schools and the public sector hard in 2017. PERS costs alone will increase $59.4 million during the two-year period, according to the report.

For years, schools have argued the state’s formula for distributing money is unfair. The universities say after 2011, the state started treating them like vendors rather than state-funded agencies. The state’s share of university funding did not “capture the true costs” of running a university, including mandatory services such as retirement, healthcare and collective bargaining costs.

I wonder how many legislators are going to look at UO and say “Didn’t we just give you $25M for a Track championship? What are your real priorities?”

Meanwhile the “Oregonians for Higher Education Excellence” PAC set up to push the independent board proposal through the legislature has been dissolved, and the donors have taken their money back:

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Two days later, UO Board of Trustees Chair and tenure skeptic Chuck Lillis turned around and gave $5000 to noted higher education reformer, free-speech advocate, and presidential candidate Ben Carson. Perhaps Lillis liked what Carson had said on Meet the Press a few weeks earlier. It’s all about the students. And Jesus:

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From InsideHigherEd, in October:

Ben Carson, currently leading the Republican candidates for president in Iowa, on Sunday explained for the first time how the Education Department, in an administration he wants to lead, would monitor “extreme bias” by colleges.

What Carson had said to date: Twice in the campaign before Sunday, Carson had said that he wants the Education Department to identify “extreme bias” and work to cut off federal funds to colleges and universities found to engage in such bias. But he had said nothing about how this bias would be uncovered (and he has not responded to inquiries from Inside Higher Ed).

How “extreme bias” would be identified: On the NBC News show Meet the Press, Chuck Todd asked him how the department would do this. Carson corrected Todd when the journalist referred to his campaign against “bias.” Carson quickly said it was only “extreme bias,” and said that he had given this serious thought, that this was “not just spouting off.”

Carson said the Education Department would get help in identifying extreme bias. “You invite the students at universities to send in their complaints,” he said, and then the department would start investigations.

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16 Responses to Independent boards fail to deliver, so universities ask state for $100M

  1. Inquiring Mind says:

    Pot Proceeds Protect PERS?

    • Want to know says:

      Poingant press pass prose: Phil punts, plum pot proceeds protect PERS, President’s platitudes precede politician payoffs, pissed professors packing.

  2. T&P question says:

    Isn’t it time for Lillis to come up for a post-tenure review?

  3. awesome0 says:

    To be clear, a key vision for the UO capital campaign was to raise 700m for athletics. That’s one goal we are actually getting close to!!!

  4. Steve P says:

    I’m shocked to hear that those ungrateful athletic boosters won’t help the university cover Mike Bellotti’s $550K PERS retirement benefits.

    • honest Uncle Bernie says:

      Actually, Steve, they probably do. The athletic department gets assessed for PERS just like every other unit, and the AD is funded almost entirely from private sources.

      • uomatters says:

        The payments from athletics to PERS are not nearly enough – see the story on how athletics let Bellotti pad his PERS by millions, while keeping its own PERS assessments to the bare minimum. The difference is paid by the university and other state agencies.

        • honest Uncle Bernie says:

          Thanks, I know that Oregonian story pretty well. Your characterization of the situation as “athletics let Bellotti pad his PERS by millions” reflects at best an inaccurate understanding of what happened. I would be happy to provide a full exegesis if you like. But I will quote just one, telling passage: “it falls under the definition of PERS salary for pension calculations under Oregon law.”

          Bellotti is not the only outlier among UO retirees — by some measures, e.g. % of final salary, he is a mere piker. But the main point I would make is that the AD covers PERS payments related not only to Bellotti, but all AD personnel. Just as UO covers not just a few “fat cat” professors, but everyone, including the janitors making a fraction as pensioners of their low final salaries.

          Neither you nor I has any way of knowing whether the AD is covering more, less, or exactly equal to benefit costs of AD personnel pensions. i.e. they may be paying for Mike and all the AD personnel and some of us too, for all we know. Whatever the case may be, the payments are coming almost entirely out private funding sources, i.e. ticket sales, Uncle Phil, TV, etc etc.

          In other words, in any honest accounting scheme to which we can have access, it is misleading (at best) to claim that “those ungrateful athletic boosters” won’t cover Mike’s pension.

          • uomatters says:

            Quoting from the Sickinger story:

            Bellotti says he’s no expert in PERS calculations, but his initial understanding was that the UO athletic department and his own contributions were funding his pension, and not one penny would come from the State of Oregon or its taxpayers.

            But that doesn’t pencil out. At retirement, Bellotti’s post divorce account balance was only $300,000. The university made its own contributions over the 21 years he was employed. But combined, they won’t come close to covering the $5 million benefit reserve that PERS established to cover his payments. Moreover, that reserve may underestimate the costs, depending on the state’s investment returns and Bellotti’s longevity.

            To make up the difference, PERS draws on benefit reserves of its state and local government rate pool, which includes institutions of higher education, community colleges, state agencies and cities. Over time, all members of the pool will pay for the benefits, giving them less money to hire teachers, cops or provide services.

          • honest Uncle Bernie says:

            uomatters — re the part of the Sickinger story you quoted — of course I am aware that Bellotti’s individual account didn’t have enough contributions to pay his outsized pension. The point is that the payouts over all individuals are averaged over a larger employee pool. To repeat, there is no way of us knowing whether total AD pension contributions are less than enough, more than enough, or just enough to cover the pensions of all AD personnel. We just don’t know.

            What we do know is that the AD pension contributions are being paid almost entirely out of private contributions.

            Does anyone expect athletic boosters to write a separate check for Mike Bellotti? To cover the incompetence of PERS? Are you kidding?

            Maybe the academic boosters should write special checks for those many outsized professor pensions? Or maybe said professors should donate the “outsize” part of their pensions to PERS? I wouldn’t hold my breath!

            To say or insinuate that Bellotti or the AD or UO deliberately gamed PERS to give him an outsized pension is just not honest.

  5. honest Uncle Bernie says:

    Really, I don’t see much chance that private donors are going to be willing, let alone eager to pay for the past recklessness of Oregon PERS. If anyone has an obligation to pay — in all likelihood, the costs will be paid — the obligation falls on the State. If the state does not pay, the students will, or the staff. But I can’t for the life of me imagine private donors being willing to bail out PERS. Just try using “help us bail out PERS” as a UO fundraising slogan.

  6. Thedude says:

    Pers costs are an excuse to raise tuition.

    • honest Uncle Bernie says:

      An excuse? With what is UO supposed to pay its increased PERS costs? Please tell us the secret.

  7. Do your taxes says:

    I may or may not be a tax lawyer, but the IRS doesn’t allow deductions for donations to candidates or to PAC’s like “Oregonians for Supporting Duck Control of UO.”

    But donations to 501(c)(3)’s like the UO Foundation are deductible, so long as the Foundation doesn’t spend more than $1,000,000 on lobbying. See the instructions for Form 990, Schedule C Part II.

    So given the high tax rates for these wealthy donors they would save about $200,000 by moving these donations from their PAC to the UO Foundation. Making their donations via the UO Foundation instead of a PAC would also allow them to keep their names and contributions secret.

    However, while the tax code does allow a 501(c)(3) to support specific legislation such HB4146, which will funnel state tax money to Track Town and the IAAF, they are not allowed to make contributions to political candidates such as Dr. Ben Carson, who is even nuttier than The Donald.

  8. Thom Aquinas says:

    If Lillis is so anti-tenure, why does he not lead by example and make his own tenure on the BOT subject to a campus/faculty-wide (dis-)approval-rating?

  9. Dr. Funkenstein says:

    Scrutiny for thee, not me.