Gov Brown’s budget proposes increasing state funding for higher ed

12/3/ update:

OSU’s version is here, UO’s almost identical take is below:

From: Hans Bernard <[email protected]>
Date: December 3, 2020 at 08:55:20 PST
To: Hans Bernard <[email protected]>
Subject:Governor’s Recommended Budget

Campus colleagues,

On Tuesday, Governor Kate Brown released her proposed budget for the 2021- 23 biennium. 

The Governor recommends balancing the $25.6 Billion general and lottery fund budget through a combination of one time funds, $310 million in new revenue, and makes some modest assumptions about continuation of federal Medicaid assistance programs. The budget recommends using $215 million of the Education Stability Fund, and raises $310 million in new revenue through eliminating some tax expenditures (pass through), disconnecting from portions of the federal tax code included in the CARES act, limiting the home interest mortgage deduction to first homes, increasing tax surcharges on distilled spirits, and increasing rural hospital assessment rates. Additionally, the budget also proposes the closure of three prisons and makes some targeted cuts to the Oregon Health Plan.

While individual institutions will see cuts from their FY 21 appropriation, the budget largely protects higher education from cuts in state funding.

The Public University Support Fund (PUSF) was held flat at $836,898,583. Because of the way the state splits biennial funding (49% in the first year, and 51% in the second) flat funding constitutes an estimated $3 million cut to UO for FY 22. 

In the Capital budget the Governor recommends includes $309.4 M in funding for universities. This includes $80 million for Capital Improvement and Renewal (CI&R) a fund that is distributed to campuses by formula, as well as $58.5 million for UO’s Heritage project. The Heritage project is a renovation of University and Villard Halls. The Governor recommended funding for projects at PSU, OSU, EOU, and UO.

Financial Aid Programs:

• Funding for Sports lottery scholarships was increased slightly to a total of $15.1M. UO and OSU receive $1,030,000 of these funds for scholarships for student athletes and graduate students.
• The Governor recommended increasing funding for the Oregon Opportunity Grant by $4.7 million, bringing the total amount to $114.2 million.  The University may see some financial relief in in PathwayOregon costs associated with this increase, but it will be small.
• The Governor recommended increasing funding for the Oregon Promise by $1.26 million, bringing total funding for the program to $42.2 million.

State Programs: The Governor maintained current funding levels for University State Programs. These programs took a cut in the special session in August, and unfortunately that cut was not restored in the Governor’s Budget. (Engineering Technology Sustaining Funds, Tall Wood Design Institute, Oregon Office of Community Dispute Resolution, Signature Research Centers, Labor Education Research Center, and Clinical Legal Education.) 

Health Insurance Benefits for part-time faculty: The Governor’s Budget includes $10.0 million General Fund for health care for part-time faculty at public institutions who provide instruction at multiple institutions and who are eligible for health care benefits.

The Governor’s budget is based on the November 2020 revenue forecast, which continued to predict modest revenue growth and shows that state collections had largely recovered from the Covid-19 associated shutdowns that occurred during the spring of 2020. The November forecast however did not capture lost revenue associated with current Covid-19 restrictions.

The Legislature will convene on January 19, 2021 and are constitutionally required to adopt a balanced budget no later than June 28, 2021.The state economists will deliver three revenue forecasts before the legislature must conclude their work this summer. 

The Governor got a question about higher education funding in her press conference unveiling the budget. When asked, she stated: “I did not have the resources I wanted when building this budget…. My goal is to work with the legislature to find more resources for our universities and community colleges…..universities literally open up the world for our students and we need to work to increase funding.” 

The budget itself is over 500 pages, so it will take a few days to fully digest the document. In the meantime if you have specific questions please send them my way and Jamie and I will work to get answers to you as soon as possible.

Thanks, 

Hans

Hans Bernard

11/30/2020: In nominal not real dollars, of course.

I’m still waiting for UO lobbyist Hans Bernard to post something about this on his blog, but that’s the gist of the budget proposal here. While Governor Brown wants to hold the total PUSF bucket constant, she also proposes moving the $2.8M OSU gets for the Veterinary Diagnostics Lab into the mysterious and increasing PUSP budget – meaning more leftovers for the 7 state public universities to divy up from the PUSF.

That said this increase is a decrease if you consider inflation, which will eat up $36M of the proposed 2-year $837M PUSF, taking a guess at future cost increases.