A critical element of the budget development process is entering its final stages, as the Tuition and Fee Advisory Board prepares to make a recommendation to the president and provost.

Tuition provides 83 percent of the university’s educational and general fund, which constitutes roughly half of the university’s $905 million operating budget. The education and general fund is the main source of financial support for operations in all of the schools and colleges, as well as in central administrative units.

“We’re working with students, faculty and staff on the (advisory board) to recommend an appropriate fee structure that gives the university some degree of financial flexibility but keeps tuition increases within reasonable ranges,” said Jamie Moffitt, vice president for finance and administration.

This is a particularly challenging year for budget development, as fees will be up for approval by the Board of Trustees of the University of Oregon in March — to allow time for students to secure financial aid packages — but in advance of the completion of collective bargaining with multiple unions.

“We have several unknowns that present a challenge,” Moffitt said. “We are getting started with negotiations with United Academics and SEIU, and salary packages will obviously be a part of those discussions.”

Salaries and benefits represent 81 percent of the education and general fund expenditures, which Moffitt notes is normal for a university, but it means total institutional costs are driven largely by salary packages and increases in retirement and health care costs.  While many of these costs are not yet known for next year, the university has received information regarding retirement costs, which are estimated to rise 9 percent next year.

“The institution is currently operating with a break-even budget,” Moffitt said. “Although particular units may be facing greater or less budget pressure, overall, total revenue for this year is projected to just cover total operating costs. While we’re optimistic about potential additional funding coming from the state, state leaders have made it clear that they expect such funds to contribute to student access and success through new investments in excellence.”

Last spring, the university outlined to the Higher Education Coordinating Committee four areas that it would like to invest in, were the state able to make new resources available. Those included:

• PathwayOregon; a program to provide full tuition and fees, scholarships and academic support to academically qualified, PELL eligible Oregonians;
• New tenure-track faculty hiring;
• Student support programs such as peer advising, writing lab expansion, new retention and learning initiatives and enhanced academic enrichment options; and
• Graduation assistance grants for third- and fourth-year students who are in good academic standing but at risk for leaving the university for financial reasons.

In addition, the new Board of Trustees is calling on the university to make selective investment in faculty “clusters of excellence,” according to Moffitt.

“We have many areas on campus that are poised to excel dramatically, but that costs money. We will have to align our budget with our collective goals,” she said.

The advisory board is expected to conclude its work in February. Its recommendations will then go to senior leaders, who will host a public forum with students before moving a final proposal to the Board of Trustees March 5 and 6.

Under its new governance structure, the Board of Trustees would need to petition the Higher Education Coordinating Council if they choose to propose increasing resident undergraduate tuition and fees by more than 5 percent.

“While we are facing considerable budget pressures, we need to make sure that we keep tuition increases as low as possible for students,” Moffitt said.

—By Tobin J. Klinger, Public Affairs Communications