With the adjournment of the 2017 legislative session last Friday afternoon, this issue provides a summary of the session, including:

  • The big picture and a prognosis for the next year;
  • How OSU’s legislative priorities fared;
  • Other bills that captured our attention and time; and
  • Acknowledgements for all the help we received over the last seven months.

 

The Big Picture

As described in previous updates, the legislature entered the session with a list of “mega issues” that demanded attention in order to balance the budget and address real problems facing Oregonians across the state. Over the course of the session the items on this list ebbed and flowed, but they generally included:

  • Revenue reform (tax increases);
  • Investments in transportation infrastructure;
  • Public Employees Retirement System (PERS) reform;
  • Health care reform, including a health provider tax and bolstering the state-financed health care system that was susceptible to changes at the federal level;
  • Housing affordability; and
  • Overall cost management/cost cutting for state agencies.

Legislative leaders formed task forces and joint committees, some of which operated in open forums with hearings that involved citizens who waited in long lines to deliver their allotted three minutes of testimony. Other efforts were conducted behind closed doors, with an occasional issuance of working documents that appeared like wisps of white smoke as they circulated among the interest groups and factions.

Throughout the session, legislators monitored state tax receipts which in May brought the “bad news” that Oregon’s economy was working better than had been predicted back in May 2015. Revenues were forecasted to be slightly over the 2% “kicker” threshold, resulting in state income tax refunds totaling more than $400 million. Had the $18.8 billion May forecast been just $70 million lower (.4% of the total forecast), some $400 million would have been available to address any of a number of problems during the 2017-19 biennium.

Success required that all of the mega issues fit together like a patchwork quilt with each piece needing to attract the necessary votes to gain passage. Differences of opinion between chambers were sometimes as fractious and disruptive as the differences between parties. Concessions made in one package implicated adjustments in another. And, for votes involving tax increases, a three-fifths bipartisan supermajority was needed. Late in the session the House sought to eliminate a tax credit by a simple majority vote, because although eliminating a tax break may increase the taxes a person may pay, it is technically not a tax increase. Ultimately that ploy died in the Senate.

Despite rigorous efforts, legislators were unable to produce the bipartisan super majority needed to reform Oregon’s tax system. With two weeks left in the session, the Governor, Speaker, and Senate President threw in the towel and issued a statement that revenue reform in 2017 was simply not going to happen. With that news, legislators made a slow slog for the exits as they worked through hundreds of bills waiting for floor consideration. The good news is that, generally, “The Oregon Way” worked. There were threats, but no nuclear options. Breakdowns happened, but they got repaired.

The bad news is that not all of the work got done. There was no revenue reform and there were not significant changes in the cost drivers that are causing the revenue imbalance. Consequently, the pieces in the patchwork quilt took on new shapes and sizes. Some pieces disappeared, some shrank, and others became fodder for voter repeal. The graphic below describes how the ideal process was portrayed in an earlier update and how it morphed into a less than ideal, but slightly workable approach:

The Ways & Means co-chairs were able to issue a balanced budget, but it was smaller than what the K-12 system wanted. Legislative leaders settled on a health care provider tax, which passed the House when a retiring Republican joined the 35 Democrats to form a 3/5’s majority. But that approach developed cracks when another House Republican announced plans to mount a citizen campaign to overturn the measure at the next general election in November 2018. The Democrats countered with a bill that accelerated the process to require the measure be considered on the ballot in January 2018. If voters were going to repeal the provider tax, they wanted to be able to re-balance the budget during the February short session.

Legislators also approved a smaller, less Portland-centric transportation package. Cost containment elements were identified, but it’s not clear how they will be implemented. Rental restrictions were enacted, but they weren’t as expansive as some desired.

Some of the unresolved issues will likely spill over to the February short session. But short sessions are like Olympic short track speed skating races: there is no time for a change in course and one slip takes you out of the race. Between now and February legislators and lobbyists will be working on manageable initiatives. Concepts will likely emerge during interim committee days – the first round is scheduled for mid-September. The short session simply will not provide the time needed for meaningful tax reform and cost restructuring, but those issues will continue to brew.

What is certain is that legislators will be spending much of the next 16 months preparing for the 2018 off-year elections. At the national level, off-year elections typically result in increases in seats held by the party not in the White House. In Oregon during the Obama years, for example, while Democrats picked up seats in the legislature when Obama was on the ballot, they lost a number of them to Republicans in the off years. As is typical, the House will see a significant turnover. Already, Reps. Huffman (R-The Dalles), Esquivel (R-Medford), and Lininger (D-Lake Oswego) have announced they are either retiring or moving on.

With the Democrats solidly in control of both chambers, it remains to be seen if, or how many, seats they may wrest from Republican control and whether the current situation in Washington, DC will play a role. An increase of just one seat in each of the chambers would provide the 3/5’s super-majority needed for a party-line vote on revenue reform. Even so, a party-line vote is not guaranteed.

 

How did OSU’s Legislative Priorities Fare?

Here are OSU’s legislative priorities as written when we headed into the session, with an assessment of how we did:

Unity of Purpose among all Seven Public Universities

Oregon’s seven public universities were successful during the 2015 legislative session in achieving an unprecedented increase in funding largely as a result of unified advocacy. During the 2017 session, universities will continue to work together to address the challenges presented by structural costs that outpace Oregon’s projected revenue growth and disruptive program changes or mandates.

Assessment: All seven universities stuck together throughout the session. Newly hired staff from the Council of Presidents provided a great deal of help and support to ensure that universities addressed over 800 hundred bills that had a significant effect on universities in one way or another.

 

$100 Million Increase in University Support

As outlined by the seven university presidents in April 2016, Oregon’s Public Universities are seeking at least a $100 million increase (for a total of $765 million) in operating funds for the 2017-19 biennium. Despite increasing revenues, the Governor’s Recommended Budget (GRB) “flat-funds” university support at 2015-17 levels. This level of funding creates significant upward pressure on tuition and harmful programmatic reductions that will threaten student access and success.

Assessment: The universities established a drumbeat for the $100 million figure early and maintained it throughout the session. As a result, the Ways & Means committee members were well aware of the figure, if not all 90 legislators. In the end, SB 5524, the bill that funds the universities through the Higher Education Coordinating Commission, included a $70 million increase to be distributed among all seven universities. This funding level has enabled significant reductions in planned tuition increases for the five universities that had proposed increases of over 5% for next year. For OSU, this figure will alleviate a significant budget hole for the next academic year.

 

Increased Capital Funding

OSU supports all of the projects recommended to the Higher Education Coordinating Commission by the seven university presidents. The GRB reduces and eliminates key projects. OSU will continue to explore and advocate for pathways that would fully fund its projects in a manner that would not result in reductions to other university projects. OSU projects include:

  • $69.5M for the continued expansion of OSU-Cascades [$20M in the GRB];
  • $9M for a Quality Food & Beverage building [fully funded in the GRB];
  • $29M for capital renewal for Cordley ($15M), Fairbanks ($11M), and Gilkey ($3M) [GRB eliminates Fairbanks]; and
  • A share of $65M for capital renewal and repair for all seven public universities [GRB provides $45M].

Assessment: The universities sought a total of $284 million in a consolidated request to the HECC. In the final week of the session, they received a total capital investment of $264 million, the highest amount ever–not accounting for inflation. For OSU the final numbers were a disappointment because they included only $9.5 million for site preparation for the OSU-Cascades Expansion and a modification in the Graduate & Research Center. All of the remaining OSU projects were fully funded by the legislature, though the final allocation for capital and renewal for all seven campuses was at $50 million – an increase over the Governor’s recommended budget, but less than the universities had sought.

Next Steps: Over the last year a broad coalition of supporters stepped forward to lend their voices and resources to advance the future of our state and the Central Oregon region. We are all disappointed by the session. OSU is working with the region to develop an explicit game plan focused at both the 2018 short session and beyond to the 2019 session. We are assessing the political landscape, determining what we can accomplish in that landscape, and assessing the opportunities we face to change that landscape as we deliberately move forward toward the goal of the continued expansion of the educational opportunities and resources available to the Central Oregon region.

 

OSU Statewides – Agricultural Research Station, Extension & Forest Research Laboratory

Despite increasing revenues, the GRB flat-funds the OSU statewides. OSU supports a $9.4M increase in order to maintain a continued service level for these vital programs which serve the needs of Oregon family farmers, low income families, and Oregon’s natural resources enterprises in all 36 counties of the state.

Assessment: Following the issuance of the Governor’s recommended budget in December, OSU worked with a diverse array of supporters in seeking the $9.4 million increase. The good news is that the legislatively approved budget made a significant step in the right direction with a $5.6 million increase. The bad news is that the Statewides are now left to deal with a $3.8 million shortfall which will likely result in the loss of 17 FTE positions across the three programs. At the urging of individual legislators, the final budget also directed some targeted funding for the North Willamette ($120K) and Hermiston ($260K) Experiment Stations. OSU also received funding for the Molluscan Broodstock Program ($570K) and for addressing ocean acidification ($280K). We are seeking more information to determine if these are one-time or continuous funding streams. (Funding for Outdoor School is discussed in the next section.)

Affiliated with the funding of the College of Forestry is the passage of a forest harvest tax which must be renewed each biennium by a super-majority vote. This session provided multiple challenges as a number of legislators proposed changes in both the process and the amount by which this tax is levied. HB 2270 ultimately passed both chambers without any significant changes and is now awaiting the Governor’s signature.

Next Steps: OSU program managers will meet later this summer with program advocates and supporters to determine how best to manage the loss in funding and positions. The discussions will also reflect how we will approach the legislature both in the February short session and over the long term to recover the loss of state support. A key issue in this effort will be aimed at the manner in which the “Continuing Service Level” used by the Department of Administrative Services and the Legislative Fiscal Office does not appropriately consider the mandated costs that are applied to the Statewides. Until this issue is addressed, OSU will continue to face continuous erosion of state funding for these vital programs.

 

Establishment of a “Fighting Fund” for Oregon’s Research Universities

Oregon’s public universities support the investment of $20 million in carry-over funds from previous biennia to establish matching funds that will enable universities to better compete for federal grants. The Fighting Fund would match federal research grants awarded to Oregon universities when they compete for grants that enable research and economic development in Oregon.

Assessment: One casualty of the 2017 legislative session was HB 2582, sponsored by Rep. Dan Rayfield, which would have provided $20 million in matching funds for Oregon’s public universities. The House Higher Education Committee approved and amended the bill to reduce the financial impact and implement the funding over multiple biennia. Unfortunately the bill lost traction when it reached the Joint Ways & Means Committee.

Next Steps: We anticipate universities will revisit this issue during the 2018 short session. In the meantime, we will be re-assessing the financial mechanism for the fighting fund and will further develop information from other states to show how they invest in university research capacity.

 

Priority Funding for State Need-Based Financial Aid

The GRB includes a $30M increase in the Oregon Promise (“free community college”) in favor of fully funding the Oregon Opportunity Grant program which provides need-based financial aid for low income university and community college students. Oregon’s public universities and the Oregon Student Association support fully funding the Opportunity Grant before expanding the Oregon Promise – which is not a need-based program.

Assessment: From the 2015 appropriation of $10 million, the legislature provided a total of $40 million for the Oregon Promise for the 2017-19 biennium, while providing $160.1 million (a 15.7% increase over the 15-17 biennium) for Opportunity Grants. Legislators sought to manage the significant cost increases presented by the Oregon Promise through the use of an income test that will limit availability to the grants for families with an “expected family contribution” (EFC) of greater than $18,000 per year. (This EFC generally equates to a gross family income of approximately $100,000.) While this is a significant step, it does not necessarily create parity for students attending four-year universities. An additional concern is that it creates and maintains a financial wall for community college students as they transition from “free” community college to the higher tuition levels charged by four-year universities.

Next Steps: Universities will continue to assess how the OOG and Oregon Promise programs can co-exist to the benefit of all students seeking a post-secondary education. With only one year of the Oregon Promise to evaluate, we plan to work closely with the HECC, the community colleges, and students over the months and years ahead to devise a comprehensive approach to financial aid that leverages the resources available in each sector for the greatest benefit for students across the state.

 

Sports Lottery Scholarships

The GRB eliminates all of $8 million in lottery funding which, under Oregon statutes, has provided scholarships for athletes and graduate students at all seven universities.

Assessment: As it has in previous legislative sessions, the legislature recovered the full funding – $8.2 million – for the Sports Lottery program. OSU’s share is slightly over $1 million, roughly $500K in scholarships each academic year.

 

Additional Legislative Initiatives

Marine Energy Grant ($2-4 Million): Funding would match a $40M federal grant recently awarded to OSU.

Assessment: Funding was not included for this effort and OSU will be working with legislators and the federal delegation to determine whether and how a combination of state, industry, and philanthropic funding can serve as a match for these federal funds.

 

Measure 100 technical fix: Provide flexibility for university researchers dealing with at-risk species.

Assessment: OSU worked with the Oregon Humane Society and Rep. Dan Rayfield (D-Corvallis), who introduced HB 2576, which resolves questions about how research universities (and, as amended, zoos) may exchange species and artifacts involving species covered by the ballot measure. The bill passed both chambers and the Governor has signed it into law.

 

Priority Registration for Veterans: Increased access for veteran students.

Assessment: OSU worked with veterans advocates, the other universities, community colleges, and Rep. Brad Witt (D-Clatskanie) to revise a program adopted during the 2015 session to ensure that priority registration would apply to veterans throughout their academic programs. HB 2565 passed both chambers and was signed into law by the Governor.

 

Extension of Open Education Resources: Continued funding for free textbooks.

Assessment: The HECC did not seek continuing funding for Open Education Resources – OERs or “free textbooks.”  OSU worked with the HECC, the Oregon Student Association, and Rep. Gene Whisnant (R-Sunriver) on the development and passage of HB 2729. That bill provides $1 million to support the continued development and use of OERS for community college and university students. The bill passed both chambers and is expected to be signed by the Governor.

 

Post Doc employment status: Enable an alternative retirement program for post-doctoral students.

Assessment: With much of the work carried by the University of Oregon, legislators approved SB 214, which enables public universities to offer alternative retirement programs to ensure that contributions can follow post-docs as they progress in their academic and research careers. The bill is awaiting the Governor’s signature.

 

Additional elements that were not originally in OSU’s Legislative Priorities

OSU and the other universities followed a number of other issues of interest that emerged throughout the session, including:

Outdoor School: The HECC funding bill, SB 5524, appropriated $24 million of lottery funds to the OSU Extension Service to administer the Outdoor School program as approved by voters with the passage of Ballot Measure 99 during the 2016 November election. While the measure called for approximately $40 million in lottery funding to flow through Extension to enable Oregon’s 197 school districts to provide Outdoor School programs to elementary students, the legislature establish a pathway to grow into that amount during the 2019-21 biennium. The funding provided for 2017-19 is estimated to serve roughly 45% of the target population in the first school year and roughly 65% in the second school year of the biennium. Administrative costs may be up to 15% for this biennium of the program, although estimates provided by the Extension Service do not anticipate it will need that amount of funding. Extension is already in the process of interviewing and hiring a director to manage the program.

Credit Transfer: HB 2998 requires the establishment of unified statewide transfer agreements between public universities and community colleges. Agreements must include various metrics, including ensuring that transfer students are able to obtain a degree with a similar number of academic credits as required for students who begin post-secondary education at a public university, minimizing debt, and increasing the rate at which transfer students receive a degree while maintaining standards of academic rigor at all institutions. The bill requires the first transfer agreement by December 1, 2018.

Elliott Forest: With the passage of the SB 5505, the legislature approved $100 million in bonding “to finance the release of a portion of the Elliott State Forest from restrictions from ownership of the Common School Fund to preserve non‐economic benefits of the forest.” As covered in a previous update, the Elliott State Forest is 82,000-acres of publicly owned forest in Oregon’s Coast Range north of Coos Bay. Over the last year, due to legal efforts to ensure that the assets of the forest contribute to the State Common School Fund, as required by the Oregon Constitution, the State Land Board conducted a process to sell the forest for a minimum of about $220 million based on its appraised value. SB 5505 provides a stream of revenues for the Common School fund; it does not address the long-term status of the forest or potential activities needed to retain the forest in public ownership.  Those issues will be addressed in the coming months and years and may involve the OSU College of Forestry.  None of the language adopted by the legislature addressed OSU’s potential role in research or any facets associated with the continuing status of the Elliott Forest.

Oregon Manufacturing Innovation Center (OMIC): OMIC is a collaborative effort bringing together industry, higher education, and government to develop new tools, techniques, and technologies to address near-term manufacturing challenges through applied research and advanced technical training. OMIC is modeled after The University of Sheffield Advanced Manufacturing Research Centre (AMRC) at University of Sheffield in England with Boeing. A broad industry and university coalition led by Sen. Betsy Johnson (D-Scappoose) worked throughout the last year in developing a more comprehensive proposal which eventually landed nearly $14 million through four different pieces of legislation.  HB 5025 contains $3.6 million in OMIC operations capital in the Oregon Business Development Department budget. HB 3470 includes $3.0 million in OMIC operations capital from leftover Connect Oregon funds that were transferred from ODOT to OBDD. SB 5530 contains $3.39 million in lottery bonds dedicated to OMIC access road construction. And SB 5506 provides $3.875 million in XI-Q general obligation bonds dedicated to OMIC personal property acquisition or real property improvements. The Oregon Institute of Technology will allocate and manage the funds.

HECC “Clean Up” Bill: SB 54 removes the deadline for public universities to submit biennial funding requests to HECC; requires HECC to evaluate public universities every two years instead of every year; eliminates references to public universities without governing boards; requires public universities to establish a system of shared administrative services for maintenance of federal tax benefits relating to state bonds and administrative services relating to certain employee benefits; and allows public universities to opt out of shared administrative services system only if DAS adopts rules pertaining to federal tax benefit maintenance and public universities.

Universities to Report Graduation Rate for Oregon High School Graduates: HB 2147 requires institutions to provide the following information to the HECC annually: the number of Oregon high school graduates from each school district enrolled at the institution and the graduation rate at that institution for Oregon high school graduates from each school district.

Reporting on Cost Drivers: HB 3288 requires public universities to submit reports to the HECC each biennium listing imposed legislative mandates, impact of mandates on costs, causes of any increase in administrative positions, and actions taken to monitor and control cost drivers.

Oregon Talent Council: HB 3437 winds down the Talent Council and shifts its duties to develop a statewide talent plan to the Workforce Investment Board.

Dyslexia Teacher Prep Requirements: SB 221 removes the requirement that educator preparation programs unable to demonstrate that teachers receive training on meeting third grade reading requirements submit a plan to the Teachers Standards and Practices Commission (TSPC). The bill allows educator preparation programs to phase in compliance with standards or rules.

Credit for AP Courses: SB 207 requires public universities and community colleges to give credit, beginning with the 2018-19 school year, for students who participated in an advanced placement program and received a grade of three or higher on a nationwide examination.

Collective Bargaining for Faculty: HB 3170 extends collective bargaining rights to certain public university faculty members whose duties have academic rather than administrative focus. The bill requires separate bargaining units for faculty who supervise other faculty members.

Reporting on Competency-Based Education: HB 3289 requires HECC to submit an annual report describing progress made in providing competency-based education in public post-secondary institutions. The report must describe effectiveness of expanding competency-based education; identify issues and barriers to implementing or expanding competency-based education; analyze competency-based education models; and recommend policy changes that may be implemented to expand competency-based education.

Health Insurance Coverage for Students during Campus Disease Outbreaks: HB 3276 requires insurers to cover vaccinations (even if out-of-network) when deemed necessary to prevent the spread of disease; requires insurers to cover or reimburse for vaccinations in urgent health situations; and creates a workgroup to make recommendations to improve student healthcare coverage.

Vaccine Education on College Campuses: SB 274 requires the Oregon Health Authority to create a flier to be distributed to new students on the importance of vaccination.

Cultural Competency Standards: HB 2864 directs public universities to establish a process for recommendation and oversight of cultural competency standards for employees and requires implementation by December 31, 2019.

Student Mental Health Support: SB 231 establishes Task Force on Student Mental Health Support to investigate the impact of mental health issues and substance abuse disorders on college education, recruitment, retention and completion.

Protecting Students Who Are Survivors of Sexual Assault: HB 2972 prohibits universities from imposing or threatening discipline or sanction for the purpose of influencing a student-victim’s decision to participate in investigation of sexual assault, violence or stalking.

Student Loan Debt Education and Reporting: SB 253 requires universities to provide the following information to students annually in any form: An estimate of the total amount of federal education loans the student has received to date; the total cumulative amount of tuition and fees a student has paid to date; an estimate of total potential payoff amount, including principal and interest; an estimate of the amount, including interest, of potential monthly payment; the percentage of borrowing limit student has reached to date; and a statement that the information provided does not include private loans or credit card debt.

Increased Protections for Student Athletes from Predatory Athlete Agents: SB 5 requires additional disclosures from athlete agents, including contact information, financial records, and past student athlete involvement. Allows reciprocal athlete agent registration and renewal between states, and enhances athletic director notification requirements.

Grant Program for Veteran Services on College Campuses: SB 143 establishes a competitive statewide grant program to establish campus veteran resource centers and coordinators, or expand and enhance existing centers and coordinators, on campuses of community colleges and public universities. The grant program, within the Oregon Department of Veterans Affairs, is initially funded with $1,100,000. Universities were unsuccessful in making the funding made available by the bill apply for multiple biennia.

 

Acknowledgements

Leading into and throughout the legislative session many individuals and organizations contributed to our efforts in Salem. Singling out particular individuals and entities comes at the risk of omission. Nevertheless, here goes….

Within OSU, Jan Lewis tracked the budget numbers, not only for OSU but also in coordination with the six other universities. Trina McGaughy did a patient and masterful job of gathering data from all seven universities to produce “fiscal impact statements” for bills that created requirements and expectations for institutions. Despite a grueling workload, Becca Gose was always available to engage, and on a number of occasions kept bad things from happening. The Extension Service and the College of Agricultural Sciences organized a terrific presence for “Statewides Day” in March with honorable mentions for Dana Martin, Jackie Russell, and Betsy Hartley, who helped organize meetings and advocates from across the state, and the members of ECAN, who made their presence known in the Capitol from almost every county in the state. ASOSU’s elected student leaders and staff, including Rachel Grisham, Brett Morgan, Candalynn Johnson, and Jacqueline Logsdon, travelled to Salem on multiple occasions and devoted time to regular Friday afternoon briefings. The same goes for the student leaders at OSU-Cascades – Molly Svendsen and Gabby Bangert, who travelled across the mountains on multiple occasions to advocate not just for the OSU-Cascades expansion but also for increased state investments in university operating budgets. Becky Johnson and her leadership team – Kelly Sparks and Christine Coffin – also logged in miles and hours working both in Salem and in Bend on behalf of OSU-Cascades. Jennifer Almquist provided excellent quality control as we produced our periodic updates. Chris DeHart, an OSU student working in the Government Relations Office, managed much of our routine correspondence with legislators and provided a great analysis of the state’s capital capacity.

Throughout the session esteemed colleagues at UO (Hans Bernard and Libby Batlan), PSU (Alyson Kraus), OIT (Lita Colligan and Brittany Miles), SOU (Craig Morris), WOU (Ryan Hagemann), OHSU (Joyce Brake), and EOU (Tim Seydel and Alex McHaddad) all collaborated and provided support as we worked on higher education and other bills that posed challenges to the universities. Through thick and thin, the team stuck together and did a great job of navigating the Ways & Means process. Throughout the legislative process, the glue that held the operation together and the oil that kept the wheels turning came from the competent and unflappable staff at the Oregon Council of Presidents – Dana Richardson and Ellie Boggs.

We had a lot of help from external supporters. “Now 4 OSU-Cascades,” a 501(c)(4) organization led by Amy Tykeson and Janie Teater, and represented in Salem by Erik Kancler worked steadfastly in promoting the interests of the Central Oregon region. Their efforts began well before the session and persevered to the last, disappointing gavel of the Capital Construction Subcommittee. While funding for the campus expansion was not what we expected, it was not due to a lack of effort and commitment. The team produced one of the most effective committee presentations I have seen during my 30-plus years working in Salem.

The conservation and natural resources communities also worked throughout the session in support of the OSU Statewides – most notably Katie Fast with Oregonians for Food & Shelter, Jenny Dresler with the Farm Bureau, Ivan Maluski with Friends of Family Farmers, Tammy Dennee with the Oregon Dairy Farmers, and Kristina McNitt with the Oregon Forest Industry Council.

The Beaver Caucus, chaired by Bill Perry, staffed by Rebecca McAuliffe and Doug Badger with Quinn Thomas, and supported by the OSU Foundation continued to up our game in Salem with multiple advocacy visits and correspondence campaigns. The team is already gearing up for the February 2018 session.

Finally, throughout all of this OSU Government Relations Coordinator Karli Olsen ensured that none of the spinning plates hit the floor, while organizing OSU Day, issuing our periodic updates, holding down the fort in Corvallis, and supporting our efforts at the federal level. It is with mixed emotions that we announce Karli’s departure from OSU this fall as she has been accepted into the Teaching Assistant Program in France (TAPIF) administered through the French Ministry of Education and Cultural Services. She will take on the responsibilities of an English teaching assistant in the public schools of the Aix-Marseille region.

Over the last three years, Karli has been the front door and primary point of contact for the Government Relations office. I deeply appreciate her “keeping it 100” enthusiasm, charm, and the expertise that she has demonstrated and developed throughout her tenure in the office. I am also envious of her decision to take on a significant new adventure. We will soon begin a recruitment effort for her replacement.

If you have read this document all the way to the end, thanks to you for your attention. If you have any questions or concerns about this update, please do not hesitate to contact us.

This issue provides an update and summary of some of the major budget decisions affecting Oregon’s public universities. Last week when the Governor and House and Senate leaders announced they could not reach an agreement on revenue reform this session, both chambers started moving pell-mell for the exits, with the hope to adjourn well before the July 10 constitutional deadline. The legislature will be working through the weekend and, if necessary, over the 4th of July holiday.

 

Beware of the “CSL”

The budget documents produced by the Legislative Fiscal Office (LFO) use the term “continuing service level” (CSL) to indicate the level of funding needed in the next biennium to provide the same level of service delivered during the current biennium. When considering university funding, as a matter of its own policy, LFO does not fully account for increases in mandated costs such as employee health insurance (PEBB) and retirement (PERS) costs. For the last two legislative sessions, universities have sought more realistic CSL calculations. They have made some progress, but LFO’s calculations of CSL still do not accurately reflect cost increases. As a result, the budget documents for the 2017-19 biennium show increases in CSL, but in reality, these increases in the level of funding are largely overtaken by cost increases. Universities have filled the gap for most education-related programs with tuition resources. But for programs that rely solely on general fund appropriations–such as the OSU Statewide Public Service Programs–LFO’s depiction of CSL creates real budget cuts. These generally require eliminating personnel.

 

University Operating Budgets

On Wednesday, June 28, the Ways & Means Education Subcommittee approved an amended version of SB 5524, which provides operating funds for Oregon’s seven public universities. In the coming days, the full Ways & Means Committee and both chambers are expected to approve the bill. The LFO Recommendations Document provides details on all of the budget elements for post-secondary education, including funding for community colleges, the public universities, the OSU Statewides, other state-funded programs, the Oregon Opportunity Grant program, workforce development & education, and the Oregon Promise program–sometimes referred to as “free community college.”

The universities entered the session with a Governor’s Recommended Budget (GRB) for the Public University Support Fund–the primary account used to support education activities–that held them at the same level of funding as was provided during the current biennium: $667 million. The universities united with students and other stakeholders in seeking at least a $100 million increase. As approved by the subcommittee, SB 5524 provides $736 million, a $70 million increase over the GRB.

When compared to the trajectory in the budgets of other state agencies, the increase is remarkable and ranks among the largest increases put forward by the Ways & Means Committee. Though universities started the session well behind most other state-funded entities, the $70 million increase is a significant accomplishment, due largely to coordinated advocacy across the seven universities and the work of students and others across the state.

In order to ensure that the increased funding will go to rolling back tuition increases, a budget note in the bill requires tuition reductions at those universities that sought, and received, HECC approval for resident undergraduate tuition increases greater than 5% for the 2017-18 academic year. As provided in SB 5524, changes in tuition are as follows:

  • OIT from a proposed 7.42% increase to 5.0%
  • PSU from a proposed 8.37% increase to 5.5%
  • SOU from a proposed 11.43% increase to 9.0%
  • UO from a proposed 11.48% increase to 6.56%
  • WOU from a proposed 7.45% increase to 6.5%

Because resident undergraduate tuition increases at OSU and EOU (4.2% and 4.9% respectively) did not exceed 5% for the 2017-18 academic year, the legislature did not require them to reduce their tuition increases. As a result, both institutions will be able to devote the entirety of their share of the $70 million increase to filling anticipated budget holes. OSU is currently in the process of determining how increased funding will be used over the next two years. Funding provided in SB 5524 will be distributed through the HECC funding formula. Budget note language for the 2018-19 academic year limits tuition increases at all universities to no more than 5%.

For coverage of the higher education budget:

Lawmakers propose to reduce tuition hikes at Oregon’s public universities

Legislature pushes for more higher education funding to keep Oregon tuition hikes down

 

The OSU Statewides

For the 2017-19 biennium, the GRB also “flat-funded” the OSU Statewides–the Extension Service, Agricultural Experiment Station, and Forest Research Laboratory–at $118 million. The GRB eroded about 70% of the $14 million increase the legislature included for the Statewides in the 2015-17 budget. The 2015 session was notable for these programs because it produced the first across-the-board programmatic increase for these programs since 1999.

Since the GRB was issued in December, OSU has worked with a diverse array of supporters in seeking a $9.4 million increase to maintain a more accurate CSL. The budget approved by the Ways & Means Education Subcommittee this week includes a $5.6 million increase, resulting in a $3.8 million shortfall. The difference is largely due to the LFO calculation of CSL. OSU anticipates that, over the next biennium, this shortfall will result in the loss of 17 FTE positions among the three programs.

While the three programs will ultimately be responsible for managing the shortfall, Sen. Arnie Roblan (D-Coos Bay) has expressed concern over the reduction and he and a number of other legislators are continuing to work during the remaining days of the session to recover the $3.8 million shortfall. Roblan has also expressed interest in seeing that future budgets for university programs reflect a more accurate reflection of their costs–and the universities will continue to work for further improvements for the 2019-21 budget cycle.

Outdoor School: SB 5524 also appropriates $24 million of lottery funds to the Extension Service to administer the Outdoor School program as approved by voters with the passage of Ballot Measure 99 during the 2016 November election. The measure calls for approximately $40 million in lottery funding to flow through Extension to enable Oregon’s 197 school districts to provide Outdoor School programs to elementary students. The LFO Recommendation contained in SB 5524 provides:

This amount of funding is estimated to serve roughly 45% of the target population in the first school year and roughly 65% in the second school year of the biennium. Administrative costs may be up to 15% for this biennium of the program, estimates provided by the Extension Service show they plan to spend less than the limit. The costs include programming, transportation, stipends or additional compensation for the classroom teacher, and the administrative costs.”

 

State-Funded Programs

The GRB also flat-funded a wide variety of state-funded programs administered by universities, and the legislature maintained that level of funding in SB 5524. Programs with ties to OSU include:

  • Engineering Technology Sustaining Funds (formerly known as “ETIC”): $25.6M
  • OSU Fermentation Sciences: $1.3M
  • Signature Research Centers: $1.1M
  • OSU Ocean Research Vessel: $648K
  • OSU Institute for Natural Resources: $418K
  • Oregon Climate Change Research Institute: $327K
  • TallWood Design Institute: $3.6M (This figure includes a legislatively directed roll-up from the 2015-17 level.)

 

Oregon Opportunity Grant

SB 5524 includes $160.1 million for the Oregon Opportunity Grant (OOG) program, the state’s need-based funding program for students attending both community colleges and public and private 4-year universities. This figure is up from $138.4 million provided for the current biennium. The Office of Student Access and Completion under the HECC has already made decisions regarding the allocation of these funds for the 2017-18 academic year. Over the coming months we anticipate increased attention among all of the education sectors regarding how these funds will be distributed among university and community college students in the second year of the biennium.

 

Oregon Promise: “Free Community College”

In an effort to address increases in forecasted costs for the Oregon Promise program which began with a $10 million allocation in the 2015 legislative session, legislative budget writers chose to hold the program at $40 million for the 2017-19 biennium. Legislators are pursuing budget language that will require a means test for Oregon Promise applicants. This approach will eliminate access to those with an “expected family contribution” (EFC) of more than $18,000 per year. (The estimated yearly Adjusted Gross Income for families at this level of EFC is over $100,000.)

Oregon Promise will be ‘significantly’ changed amid budget crisis

 

Sports Lottery

SB 5524 recovered $8.2 million in funding for the Sports Lottery, which provides academic scholarships and support for student athletes and graduate students. The GRB had completely eliminated lottery funding for this program. OSU’s share of the total $8.2 million will be slightly over $1 million.

 

Talent Council

SB 5524 provides $500K for the new Workforce and Talent Development Board, which replaces the Workforce Development Board in the HECC. Funding will enable grants “to address urgent talent gaps, prepare students and current workers to be productive in priority occupations, and deliver innovative and cost-effective education and training.”  Funding will enable between two to six grants.

 

Harvest Tax

After consideration by the House Revenue Committee, on Thursday, June 29th the Ways & Means Natural Resources Subcommittee approved HB 2270 which, among other provisions, applies a 90 cent/1,000 board foot tax on timber harvested in Oregon. The harvest tax, which requires a 3/5 majority to pass, and is supported by the forestry industry, provides funding for the Forest Research Laboratory and College of Forestry to complement funding provided under SB 5524.

 

Capital Budget

In the next several days, we anticipate legislative action on a capital funding bill that would provide bonding for buildings and campus improvements across all seven university campuses. The most significant issue still in play in this bill is whether, and the degree to which, the legislature will invest in the expansion of the OSU-Cascades campus in Central Oregon. See a letter to legislators from OSU President Ed Ray and WOU President Rex Fuller regarding the attributes of capital investments in university projects here.

 

Fighting Fund

One casualty of the 2017 legislative session is HB 2582, which would have provided matching funds to enable Oregon’s public universities to compete for federal grants. We anticipate universities will revisit this issue during the 2018 short session.

We expect to issue a comprehensive review of the legislative session in the coming weeks. In the meantime, if you have questions, concerns, etc. regarding this update or any pending legislative actions during the closing days of the session, please do not hesitate to contact us:

 

Jock Mills, Director

Karli Olsen, Coordinator

This report provides a summary of recent actions and proposals on a wide range of issues, including a rundown of some key bills under consideration as the legislature gradually nears it July 10 deadline for adjournment. As the legislature nears adjournment, leaders are taking a number of steps to speed things up.  On Monday, Senate President Courtney announced that committees are now on “one-hour notice,” meaning that instead of waiting the normal 48 hours after posting an agenda, committees may now meet with an hour’s notice. This Friday, June 2 marks the last day committees in each chamber may approve bills from the other chamber. Following the committee deadline, policy committees may hold informational hearings, but their work in approving any further legislation is concluded. The only committees remaining in operation for the purpose of considering legislation will be the Joint Ways & Means Committee and the Revenue Committees and Rules Committees in the House and Senate.

 

Revenue Issues

The state’s most recent quarterly revenue forecast, issued on May 16, indicated that while still growing, Oregon’s economy is slowing down. The forecast for the 2015-17 biennium shows that revenues are expected to exceed the 2% “kicker” threshold by some $69 million, resulting in some $400 million in revenues received this biennium to be refunded to Oregon taxpayers.

Because higher income Oregonians pay more income taxes, the state’s kicker works in reverse–creating significant benefits for those with high incomes, while providing few benefits for those with low incomes. Kicker checks for 80% of Oregon taxpayers will fall below the average refund of $210. The top 20% of Oregonians will receive checks well over double the average check amount. The top 5% of income earners are projected to receive refunds well over five times the average check. Refunds for the top 1% of taxpayers will be over $4,000, while the bottom 20% of taxpayers will receive a $5 refund.

The May forecast is used to calibrate the state’s budget for the 2017-19 biennium. Given the forecast for the current biennium, legislators will need to set aside some $400 million for the kicker, while developing a state budget that still faces a $1.4 billion shortfall.

Legislators have fewer than seven weeks before the deadline to adjourn, which has resulted in both renewed calls for revenue reform and an increasing realization that there may not be time to strike a deal on a new tax structure. The debate over revenue reform is not only about whether it is needed but also about how broadly a new corporate gross receipts tax might affect business, how it might be designed to minimize the effect on businesses with narrow profit margins, how to adjust for possible imbalanced impacts on low-income Oregonians, and how to avoid “pyramiding” by which the same product is taxed multiple times.

It may not be possible for legislative leaders to garner the bi-partisan three-fifths majority need to approve a tax overhaul, causing a number of legislators to observe that a special legislative session may be needed. To avoid lengthy and disruptive deliberations, in the past, special sessions have relied on a significant amount of preparatory deal-making before legislators or the Governor calls them into session.

In view of the impending deadline for the 2017 session, last week the seven university presidents sent a letter urging the Governor and legislative leaders “to confront the painful and costly realities of inadequate revenue streams and debilitating cost drivers.”

We ask that you carefully consider and agree upon a path forward for the future, making the difficult, but necessary choices to raise revenue to invest in higher education while curbing unsustainable costs at the same time, and grow the economy. We need you to look for solutions that are politically viable and can withstand scrutiny from civic leaders, elected officials, courts, and voters. We will join you in supporting these actions.

The Oregonian editorialized that “the time has come” for a “less volatile revenue stream that can help pay down the massive unfunded pension liability created by years of bad legislative and administrative decisions.” The paper cited a proposal by Sen. Mark Hass (D-Beaverton) as “more fair and attainable than other proposals.”

Legislators appear to be making more progress in developing a health care provider tax and agreements over the taxes and fees needed to finance a statewide transportation package but it is not evident that any Republicans are ready to support a general revenue package, or what budget reductions or “cost containment” actions are needed to obtain Republican support for a tax increase.

In the meantime, the Joint Ways and Means Committee is starting to approve non-controversial state agency budgets, particularly for those agencies that rely on fees and other funds for a majority of their financing.

 

Higher Education Bills

Legislators are making progress on most higher education policy bills, while hitting snags on others.

Forest products harvest tax: The House Revenue Committee is expected to consider amendments to HB 2270, which renews the forest products harvest tax. The amendments would both eliminate provisions that require legislative approval to renew the tax each biennium and reduce funding for the Oregon Forest Resources Institute in order to pay for firefighting costs.

Credit for Advanced Placement scores: This week, the House Higher Education Committee will consider amendments to SB 207, which, as passed by the Senate, would require universities to accept scores of 3 on advanced placement tests for college credit. Community colleges and universities are seeking provisions that ensure faculty retain control over the process by which credits for post-secondary education are considered and awarded.

Financial aid information: The House Higher Education Committee approved SB 253, which requires universities to provide information about debt burdens to students. Universities have sought clarifications in the bill that would enable institutions to provide a generic table of loan repayment information based on a model from Nebraska.

Faculty bargaining units: The Senate Education Committee is considering amendments to HB 3107, which would enable supervisors to participate in unions on university campuses. Clarifying amendments ensure that supervisors would be in separate bargaining units.

Information on high school graduates: The House did not concur with amendments to HB 2147, which would require post-secondary institutions to provide ODE and the HECC information on Oregon high school graduates. The House and Senate have appointed Conference Committee members to iron out their differences.

Cultural competency: The Senate Education Committee is slated to consider HB 2864, which establishes expectations for higher education institutions to develop and implement programs that seek to improve the cultural inclusion climate for students, faculty, staff and administration from diverse backgrounds.

Impact of legislative mandates: The Senate Education Committee will be considering HB 3288, which would require public universities to report on the impact of legislative mandates as well as causes for increased administrative positions. Universities are seeking amendments to revise the “whereas” clauses in the bill.

Funding for higher education programs serving veterans: Universities continue to work with bill sponsors and Oregon Department of Veterans Affairs on SB 143 to identify uses for funds approved under Ballot Measure 96. Amendments to the bill would enable one-time funds for universities and community colleges that have established veterans programs. Institutions have indicated ongoing funding is needed to provide consistent and meaningful support for veterans.

Oregon Talent Council: The Senate Education Committee has approved HB 3437, which would wind down the Oregon Talent Council and shift responsibilities for developing a talent plan to the renamed State Workforce and Talent Development Board. The Joint Ways & Means Committee will need to approve $1 million in funding for the grant program that was previously administered by the Talent Council.

Foster children in higher education: The House Higher Education Committee approved SB 395, which would require the HECC to work with DHS and public universities and community colleges to determine the number and graduation rates of former foster children.

A number of bills have been approved by relevant policy committees and are awaiting consideration in the Joint Ways & Means Committee because they involve funding issues. These include:

  • SB 201 Retroactive Fix for Out-of-State University Employees
  • SB 214 Establishes Alternative Retirement Plans for Postdoctoral Scholars
  • SB 805 Provides a $9.4 million increase for the OSU Statewide Public Service Programs – Extension, Agricultural Experiment Station, and Forest Research Laboratory – to meet their continuing service level.
  • SB 285 Provides $4.6 million as a state match for a USDOE wave energy grant awarded to OSU.
  • HB 2582 Establishes a University Research “Fighting Fund”
  • HB 2729A Textbook Affordability (Open Educational Resources)
  • HB 2782 Provides $69.5 million in capital funding for the expansion of the OSU-Cascades Campus.

 

Advocacy Efforts

OSU-Cascades: Last Wednesday, May 24, the Senate Committee on Business & Transportation heard from a contingency of economic development advocates from Central Oregon in support of the full expansion of the OSU-Cascades campus. To view the hearing, click here.

Beaver Caucus: On Tuesday, May 23, a team of volunteer advocates including students, a former state legislator, alumni, and industry representatives participated in lobbying meetings with legislators. They advocated for increased financial support for all seven public universities, expansion of the OSU-Cascades campus, and restoration of funding for the OSU Statewide Public Service Programs – the Extension Service, Agricultural Experiment Station, and Forest Research Laboratory. Find more information about the Beaver Caucus here.

If you have questions or concerns, contact Jock Mills.

See this and other updates at blogs.oregonstate.edu/government

This report provides a summary of recent actions and proposals on a wide range of issues, including revenue reform, a comprehensive transportation package, and the sale of the Elliott Forest. It also provides a rundown of some key bills under consideration as the legislature nears another deadline for committee consideration of bills.

 

The Mega Issues

Legislators are making slow but continuing progress as they cobble together the various “mega issues” that need to be resolved before the legislature hits its July 10 sine die deadline. The patchwork of issues includes a transportation package; PERS reform; health care reform, including a health provider tax; housing affordability; and, hardest of all, a balanced budget that includes both tax reform and budget reductions that address the structural costs that continue to place upward pressure on state budgets from biennium to biennium. All of these issues must come together in a coordinated manner that will attract the necessary votes to gain passage.

The last two weeks have shown progress in two areas – creation of a statewide transportation package and the unveiling of two competing tax reform proposals. Both issues have attracted a fair amount of media attention, which can be found below.

Transportation Package: Lawmakers presented a comprehensive proposal for addressing a range of challenges to Oregon’s transportation infrastructure. The proposals include efforts to reduce congestion in the Portland metro area, improve the backlog of deferred maintenance, and increase sagging revenues from the gas tax as cars become more fuel-efficient and non-reliant on fuels subject to the gasoline tax.

See a PowerPoint regarding the challenges and solutions presented to the Joint Transportation Committee here. Most notable for those in the Corvallis area is the listing of the single lane Van Buren Bridge as a “Possible Secondary Future Project,” which would require local approval for inclusion on the list.

For press reports on the proposal:

Issues that have attracted considerable attention include a proposed sales tax on bicycles to help pay for bikeways, possible toll roads in the Portland metro area, a payroll tax, increased registration fees and a tax on new vehicle sales.

Revenue Reform: In late April, Senate President Peter Courtney and House Speaker Tina Kotek announced the formation of a Joint Committee on Tax Reform responsible for developing proposals to raise revenues to fill an estimated $1.6 billion gap in the state’s budget. The legislature undertakes this effort in unison with other legislative efforts to reign in the factors that are contributing to upward pressures on the state budget, including the state Public Employee Retirement System (PERS) and state public employee health benefits (PEBB).

For helpful materials and articles on revenue reform:

Ultimately, if legislators adopt a Commercial Activity or Gross Receipts Tax, they will need to weigh the issue of how many businesses–and what kinds–it will affect, whether to eliminate or reduce other business taxes, steps that can ameliorate the effects on low-income Oregonians, and a host of other issues. There are many complex issues to resolve over the final two months of the legislative session.

It is too early to predict what, if any, proposal will be able to attract the necessary bi-partisan super-majority vote in each chamber needed to pass a comprehensive tax plan. In both the House and Senate, at least one Republican member would have to break with party ranks to join all of the Democrats (assuming that party’s ranks are unified) to vote for a tax package. Tax packages in the Senate require 18 votes, while the membership is made up of 17 Democrats and 13 Republicans. In the House, with a membership of 35 Democrats and 25 Republicans, 36 votes are required to pass a tax bill. A simple majority of legislators can refer a measure to the voters for consideration.

Cost Containment: The Legislative Cost Containment Work Group recommended a number of strategies for agency budget reductions, PERS reform, health care cost containment, and overall budget principles. The work group broke the recommendations down by short-term solutions (solving this biennium’s shortfall) and long-term solutions (permanent). The Legislative Fiscal Office has not yet analyzed how each of the recommendations will actually result in savings. Notable among the recommendations are proposals to enact a statewide hiring freeze for nonessential positions (this would not necessarily apply to universities although most are looking at possible hiring “chills” or other actions), increase current and future employees’ contributions to PERS, and combine the PEBB and the OEBB.

 

The Elliott Forest

The Elliott State Forest is 82,000-acres of publicly owned forest in Oregon’s Coast Range north of Coos Bay. Over the last several weeks, the Governor and State Treasurer sought to engage OSU in discussions regarding ways in which the College of Forestry could provide research relevant to the management of the Elliott State Forest. These discussions have included consideration of an option five years from now that would enable OSU to purchase the forest to serve as a research and demonstration site.

Over the last year, due to legal efforts to ensure that the assets of the forest contribute to the State Common School Fund, as required by the Oregon Constitution, the State Land Board has conducted a process to sell the forest for a minimum of about $220 million based on its appraised value. The Land Board consists of the Governor, State Treasurer, and Secretary of State, and is responsible for the oversight and management of the Common School Fund.

Last year, the Lone Rock Timber Company and the Cow Creek Band of Umpqua Tribe made a joint bid of $220.8 million to purchase the Elliott Forest, a move that the College of Forestry supported. In February, by a vote of 2-1, over the Governor’s objections, the Land Board accepted that bid. Subsequently, the Governor and Treasurer indicated they opposed the sale, and they each embarked on efforts that would retain the public ownership of the forest and seek a financial instrument to provide a stream of payments to the Common School Fund to avert a suit by the Oregon School Boards Association.

On May 9, in response to efforts to retain the forest in public ownership, the Land Board unanimously rejected the sale proposal and embarked on a process by which the state would finance a $100 million bond to provide approximately $4 million in annual payments to the Common School Fund. The Board also considered a plan put forward by State Treasurer Tobias Read that would involve the College of Forestry in research within the Elliott State Forest. The plan includes a possible option that would enable–not obligate–OSU to purchase the forest after a period of five years, as guided by the research and federal efforts to establish a Habitat Conservation Plan (HCP) under the Endangered Species Act.

In discussions involving the Elliott, OSU has been clear on three points:

  • First, the university has no interest in contributing to the disruption of a sale that received a majority of votes by the Land Board. The university became actively involved in discussions regarding alternative plans only when it became clear, as a result of actions taken by the Governor and State Treasurer, that the sale would not take place.
  • Second, because actions involving the Elliott Forest may involve the use of state bonding capacity, OSU’s potential involvement in any actions taken regarding the Elliott Forest should not detract from our long-standing priority to secure bonding to finance the full expansion of the OSU-Cascades campus in Bend.
  • Third, the state needs to fund the research contemplated over the next five years. If separate funding is not secured, this research cannot be conducted.

The College of Forestry does present the State with an opportunity to engage in comprehensive, sustained research and data collection to better inform the relationship between active forest management and conservation of listed species. OSU research could provide a scientific basis to help guide the development of an HCP and future management of the forest. The university would not engage in management of the forest now, but would retain an option to purchase the forest at a future date if or when an HCP is in place.  The HCP would provide greater certainty regarding the forest’s management and support a well-defined and financially sustainable business plan. Executing an option to purchase would clearly be subject to review and approval by the OSU Board of Trustees.

 

Tuition Increases at Other Universities

Last week, the Higher Education Coordinating Commission (HECC) approved requests for resident, undergraduate tuition increases above 5% for Western Oregon University, Oregon Tech, and Southern Oregon University. HECC did not approve requests from Portland State University and the University of Oregon. Those universities are in conversation with HECC staff and the Commission about reconsidering the votes by which HECC denied those requests. If at least five of the voting Commissioners agree to provide approval, the HECC will convene a meeting within the next two weeks to reconsider the votes. The Oregon Student Association (OSA) had a strong presence at the HECC meeting and disrupted the meeting briefly during Commission deliberations. OSA has signaled that it would continue to oppose requests for tuition increases but that their focus will generally shift to the Legislature and the need for increased revenue. To that end, OSA is planning on phone banking on May 17 and holding lobby days on May 24 and June 6 with SEIU and other partners.

 

Legislative Bills, Hearings, and Issues

Revenue Forecast: This Tuesday, May 16, the state economist will issue the economic and revenue forecast that will guide legislators in constructing the state budget. Previous forecasts have shown continued growth in revenues, but recent changes in economic indicators may signal slackened growth. The forecast may also indicate that revenues will exceed the May 2015 economic forecast by more than two percent, which would involve Oregon’s unique kicker. When the State Office of Economic Analysis releases its forecast, you can find it here.

Credit Transfer and Articulation: SB 207 would require universities and community colleges to automatically accept college credit for students who achieve a score of 3 on advanced placement tests. Although the bill sailed through the Senate on a 29-0 vote, educational institutions are opposing the bill as it is considered by the House Higher Education Committee. We have raised concerns that it disrupts existing and functional faculty led efforts to review and establish course equivalency requirements that fit each institution’s curriculum. The provosts from all seven public universities submitted testimony in opposition to the bill.

Regardless of the bill’s fate, credit transfer and articulation will continue to attract attention from legislators and the Higher Education Coordinating Commission (HECC) who cite statistics that indicate that students who transfer from community colleges to universities must take significantly more credits than the 180 required in order to attain an undergraduate degree.

Financial Aid Information: Community colleges and universities have also sought changes to SB 253, which would require them to notify students individually of their debt load on a yearly basis. The institutions indicate that they already provide this information to students, that they cannot meet the requirements of the bill because they don’t have access to information about what private debt students may be using to finance their education, and because the cost of generating customized profiles would need to be included in state funding for the institutions. The institutions are seeking amendments that would make the bill less expensive to implement.

OSU-Cascades Expansion: On Wednesday, May 24, the Senate Business & Transportation Committee will receive a presentation from advocates for the expansion of the OSU-Cascades campus in Central Oregon. The presentation will focus on the linkage between the campus and the region’s economic growth and potential.

Remaining Ways & Means Reviews: Over the next two to three weeks, the Joint Ways & Means Education Subcommittee will conduct information hearings on a number of remaining issues, including:

  • Outdoor School: Legislators are weighing options for how much to fund the roughly $40 million biennial investment in Outdoor School approved by voters with the passage of Ballot Measure 99 last November. Under the measure, the OSU Extension Service is responsible for administering the grant program and developing the curriculum for this program.
  • Oregon Promise: Legislators are also weighing the extent to which funding for the Oregon Promise—“Free Community College”—flows to students from families that demonstrate little to no financial need.
  • State Programs: Legislators are interested in the outputs of specific state-funded programs at the universities and have asked for time to review a number of these programs. (This does not involve the OSU Statewide Public Service Programs.)

 

Capital Funding

On Friday, May 12, OSU supporters and faculty testified in support of a number of capital projects under consideration by the Joint Ways & Means Subcommittee on Capital Construction. Advocates from Bend drove the 120 plus miles to deliver the allowed three minutes of testimony in support of the expansion of OSU-Cascades. Others supported the investment in the OSU Quality Food & Beverage initiative on the Corvallis Campus. Faculty member Virginia Weiss testified in support of the capital renewal of Cordley Hall on the OSU Campus.

 

The Beaver Caucus

On Tuesday May 23, the Beaver Caucus will be holding a “two minute drill” with legislators in support of OSU’s legislative agenda. For further information:  http://thebeavercaucus.org/beaver-caucus-two-minute-drill-may-23/

As the Oregon legislature nears the halfway point in the 2017 session, the next two weeks will be among its busiest. Friday, April 7th marked the last day for posting committee work sessions for bills in their chambers of origin, meaning that if a House bill hadn’t been listed on a House committee agenda for consideration, that bill can be considered “dead.” Same for Senate bills in Senate committees. Now the committees have until April 18th to actually pass the bills they have posted. So, for the next two weeks committee agendas are packed with bills vying for survival, while advocates of all stripes are working hard to keep them alive or kill them.

Bills that do not pass out of committee by April 18th can also be considered dead. Of course, no bill is “totally dead” until the last gavel falls. Provisions from dead bills can always be stuffed into other bills that are alive and well. (In the Oregon legislature amendments can only be accomplished in committees, not on the chamber floors.)

A good number of the bills up for consideration over the next two weeks may make it out of their committees, only to find themselves in another committee not subject to legislative deadlines. For example, bills that are a prioritybut which contain controversial provisions that need more work may end up in the Senate or House Rules Committee. Once there, those bills may sit and wait for consideration as part of the overall legislative log-rolling process. Other bills that have a fiscal impact because they require state funding to be implemented will find themselves in the Joint Ways & Means Committee. That committee will generally not consider individual bills until after it has completed work on agency budgets. In many cases bills can be folded in to agency spending bills. That process will continue for the next several months.

The legislature has until July 10th to complete its work. And, it will likely not be able to adjourn until it has coordinated and completed work on a patchwork of “mega issues,” including revenue reform; a transportation package; PERS reform; health care reform, including a health provider tax; housing affordability; and a balanced budget that will include a number of cost reductions needed to achieve that budget. Over the last six weeks legislative committees and task forces, some of them in open forums, others in closed-door work groups, have been developing proposals for many of these issues. In the coming months, all of these issues must come together in a manner that will attract the necessary votes to gain passage. For votes involving tax increases, a three-fifths bipartisan supermajority will be needed in each of the chambers.

Concessions made in one package may require adjustments in another. The process is one large, simultaneous equation with multiple unsolved variables. In the end, all of the pieces need to fit together. Compounding the mega issues are a number of other discrete policy issues that may increase friction between the two parties as well as between the two chambers. Differences of opinion between chambers can sometimes be as fractious and disruptive as differences between parties.

The good news so far is that “The Oregon Way” has not yet involved “nuclear options” or filibusters. But we have miles yet to travel and significant obstacles to overcome before the session is complete.

 

Higher Education

Budget Hearings: This week the Joint Ways & Means Education Subcommittee begins to hear directly from universities regarding their operating budgets. For the past several weeks the subcommittee has heard from the Higher Education Coordinating Commission and community colleges. OSU President Ed Ray will lead off the presentations this Wednesday, April 12th, joined by panelists from the other four-year universities. On Thursday, April 13th leaders from the three OSU Statewide Public Service Programs – Extension, Agricultural Experiment Station, and Forest Research Laboratory will discuss their budgets. Cindy Sagers, OSU vice president for research and OSU Engineering student, Bret Lorimore, will also address the subcommittee on the importance of university research.

Public Testimony: The subcommittee will take public testimony on university budgets at 8:30 AM on Monday, April 17th. Individuals interested in participating in the public hearing should contact us as soon as possible:  jock.mills@oregonstate.edu. Those interested in monitoring any of the hearings can do so via the legislative website: https://www.oregonlegislature.gov/citizen_engagement/Pages/Legislative-Video.aspx

OSU’s focus for testimony before the Ways & Means Education Subcommittee continues to focus on the following priorities:

  • Support at least a $100 million increase for Oregon’s public universities to achieve a comparable level of funding to the current biennium and to avoid unaffordable tuition increases and program reductions.
  • Recover $9.4 million in budget reductions to the OSU Statewide Public Service Programs–the Extension Service, Agricultural Experiment Station, and Forest Research Laboratory. See comprehensive information regarding the advocacy effort aimed at Senate Bill 805 for the OSU Statewides here.
  • Fully fund the Oregon Opportunity Grant–the state’s need-based student financial aid program for community college and university students.

Capital Projects: The Ways & Means Capital Construction Committee has yet to meet to consider the many anticipated bonding projects for the 2017 session. Higher education projects under consideration in that committee include a consolidated list of projects recommended by the seven university presidents totaling $284 million across all seven public universities. Included in that list is $65 million for capital renewal to be shared among the seven campuses; $9 million in bonds matched by $9 million in philanthropic donations for a quality food and beverage initiative at OSU focusing on cheese, wine and beer; $20 million for site preparation and infrastructure improvements at the OSU-Cascades campus in Bend; and a number of deferred maintenance projects.

Once the $284 million multi-university package is attained, OSU is also seeking an additional $49 million for OSU-Cascades to complete two additional buildings–an academic building and a student services building. In March, the House Higher Education Committee approved HB2782 which would provide the $69.5 million needed to fully fund the OSU-Cascades campus expansion. That bill is now awaiting consideration in the Joint Ways & Means Committee.

 

Bills of Note

Since our last report, the following bills have made progress:

  • Vaccines for Outbreaks (HB 3276). OSU is working with the seven public universities and Rep. Nancy Nathanson (D-Eugene) on a bill that would ensure that vaccines are made available to students and others during major outbreaks of contagious diseases such as meningitis. The bill is undergoing a number of amendments and will be considered by the House Health Care Committee on Wednesday, April 12th.
  • State match for the Pacific Marine Energy Center (SB 285). On Monday, April 10th, the Senate Environment and Natural Resources Committee will consider SB 285 which would provide $4 million in state funds to help match a $40 million US Department of Energy grant for which OSU successfully competed in 2014. OSU is also working to raise private industry and philanthropic funds for this project. For more information on the grant, click here.
  • University Research “Fighting Fund” (HB 2582). This bill would establish a $20 million fund to support universities as they compete for federal grants. The bill is scheduled for a work session on Thursday, April 13th, when the House Higher Education Committee will consider an amendment that will establish the fund but provide the legislature with greater flexibility in determining when and how to transfer revenues into the fund. If adopted, the amended bill would establish a process by which, during the February short sessions, the legislature will consider adding $5 million to the fund over the next four biennia. The goal would be to maintain the fund at the $20 million level as universities succeed in achieving federal grants.
  • Resolution commending the OSU Women’s Basketball team (SCR 17). On Wednesday, April 12th the Senate Rules Committee will consider SCR 17 which commends the achievements during the 2015-16 season when the OSU women went to the final four in the NCAA tournament. The Committee will consider amendments to the resolution that add the team’s accomplishments during the 2016-17 season.
  • Animal Trafficking (HB 2576). This bill contains technical changes to Ballot Measure 100, passed by voters last November. The ballot measure restricts the sale and trade of endangered species and parts and products from identified endangered species. As amended by the House Agriculture and Natural Resources Committee, the bill clarifies exemptions in the ballot measure to ensure that universities and community colleges in Oregon can continue to routinely improve their collections for educational and research purposes through sales, trades, exchanges, and purchases of specimens. The bill was amended and approved by the House Committee on March 23rd, and on April 3rd the House approved the bill by a vote of 58-0. The bill is now in the Senate where it will be considered by the Senate Environment and Natural Resources Committee.
  • Open Education Resources (HB 2729). On March 28th, the House Higher Education Committee amended and approved HB 2729, which would continue funding for open education resources, also known as OERs or “free textbooks.” The bill is now under the consideration of the Joint Ways & Means Committee.
  • Health benefits for employees who work at multiple institutions (SB 196). This bill seeks to continue efforts to extend health benefits to faculty when their combined hours at multiple institutions add up to more than half-time.  This issue has been considered in prior sessions and was the subject of an interim study, but complications in defining hours and benefits between community colleges and universities have prevented benefits from being extended to faculty employed at both.  Benefits are already available for faculty who work over half-time at multiple universities.  The bill will be considered by the Senate Education Committee on Tuesday, April 11th
  • PERS benefits for Post-Docs (SB 214). Because post-doctoral research positions typically do not last five years, few, if any, post-doctoral scholars fully vest in PERS or ORP. This bill would enable an alternative retirement program for post-docs at public universities to ensure that they can transfer their benefits when they move on to another employer. The bill will be considered by the Senate Workforce Committee on Monday, April 10th. For a fact sheet that explains the bill click here. OSU will be providing additional information regarding the overall issue of PERS reform bills later this week.

 

Join us for OSU Day at the Capitol – Thursday, April 20th

Please consider joining advocates in support of Oregon State University on Thursday, April 20th for OSU Day at the Capitol. For information about the activities planned for the day: click here.

Register here!

 

Questions, comments, concerns?  Please contact us:

Jock Mills, Director: Jock.Mills@oregonstate.edu

Karli Olsen, Coordinator: Karli.Olsen@oregonstate.edu

The legislature is now six weeks into the long session, which, under the state’s constitution, is scheduled to end in early July. This update provides a progress report on some of the key bills and activities that we are pursuing on behalf of OSU and higher education.

 

Ways & Means

By Friday, March 17, 2017, the Joint Ways & Means Committee will have completed a series of hearings around the state. Most of the testimony it received addressed concerns about funding cuts to specific programs, or the need for additional revenues to fill the state’s projected $1.8 billion shortfall in its forecasted budget. Since our last update, the state economist has issued a quarterly forecast that indicates Oregon’s economy is performing well, but not in a fashion that will make a significant change in the state’s overall need for either additional tax revenues or structural cost reductions (or both).

In early April, the Joint Ways & Means Education Subcommittee will consider the budget for Oregon’s seven public universities as it reviews funding for the Higher Education Coordination Commission (HECC). Universities will have the opportunity to provide information directly to the subcommittee, and we are in the process of preparing a number of presentations involving the Public University Support Fund, Statewide Public Service Programs, and other targeted programs aimed at student success.

OSU’s focus for testimony before Ways & Means:

  • Support at least a $100 million increase for Oregon’s public universities to achieve a comparable level of funding to the current biennium and to avoid unaffordable tuition increases and program reductions.
  • Recover $9.4 million in budget reductions to the OSU Statewide Public Service Programs – the Extension Service, Agricultural Experiment Station, and Forest Research Laboratory. See comprehensive information regarding the advocacy effort aimed at Senate Bill 805 for the OSU Statewides here.
  • Invest $69.5 million in state bonds to expand the OSU-Cascades campus once the projects recommended by the Oregon Council of Presidents have been funded.
  • Fully fund the Oregon Opportunity Grant – the state’s need-based student financial aid program for community college and university students.

 

Bills of Note

  1. Expansion of the OSU-Cascades Campus (HB 2782)

On Tuesday, March 14, the House Higher Education Committee unanimously approved House Bill 2782, which will fully fund the $69.5 million expansion of the OSU-Cascades campus as sought by the OSU Board of Trustees. The bill now goes to the Joint Ways & Means Committee. Consideration of capital funding will likely not occur for another month or two.

  1. OSU Statewide Public Service Programs (SB 805)

On Thursday, March 2, the Senate Environment and Natural Resources Committee considered SB 805, which would recover $9.4 million in programmatic reductions recommended by the Governor in her budget for the OSU Statewide Public Service Programs. A multiparty letter in support of the Statewides was submitted to the committee. The following Tuesday, March 7, the Senate Committee approved the bill for consideration by the Joint Ways & Means Committee. Advocates will now work with legislators to continue to support the bill.

  1. Open Education Resources (HB 2729)

In the coming weeks, the House Higher Education Committee is expected to approve HB 2729, which would continue funding for open education resources, also known as OERs or “free textbooks.” Despite the significant savings to students that accrue from developing and dispersing OERs, the HECC chose not to seek continued funding for this program.

  1. Veterans Benefits (HB 2565)

Since our last report, the House Higher Education Committee considered HB 2565 and sent it to the House floor for consideration where it was approved by a 57-0 vote. The bill will now head to the Senate for consideration. HB 2565 improves legislation passed during the 2015 session that established a priority registration process for veterans attending public universities and community colleges. Universities and veterans worked together over the last year to ensure that veterans will receive a priority when registering for classes throughout their matriculation, rather than just for the first term of attendance.

  1. Vaccines for Outbreaks (HB 3276)

OSU is working with Rep. Nancy Nathanson (D-Eugene) on a bill that would ensure that vaccines are made available to students and others during major outbreaks of contagious diseases such as meningitis.

  1. University Research Fighting Fund (HB 2582)

On Tuesday, March 14, the House Higher Education Committee considered HB 2582, which would establish a $20 million fund to support universities as they compete for federal grants. A fact sheet regarding the bill can be found here and a multi-party letter of support can be found here.

 

Highlights

On Wednesday, March 1, the Beaver Caucus lobbied legislators in support for increased appropriations for higher education.

On Tuesday, March 2, advocates from across the state came to Salem to support the OSU Statewide Public Service Programs.

 

Emerging Issues: Credit transfers

Legislators are taking a continued and greater interest in seeking to increase the transferability of credits, particularly as students progress from community colleges to the public four-year institutions. This issue has been the subject of concern in previous legislative sessions, but this session legislators are showing an interest in moving beyond simply studying the issue to enacting mandates. The HECC provides a compelling case that transfer students end up needing more credits to graduate with a four-year degree compared to cohorts who matriculate from start to finish at a four-year university.

 

Odds and Ends

  • OSU’s 2017 Legislative Priorities
  • Save the Date: OSU Day at the Capitol (Thursday, April 20)
  • Other legislative issues: The last wave of bills for consideration crossed the transom over the last week. We will have a better sense of all the bills under consideration in the next week. If you would like information regarding a particular bill that may be of interest or if you have questions or comments, please do not hesitate to contact us.

 

Questions? Contact

Jock Mills, Director: jock.mills@oregonstate.edu

Karli Olsen, Coordinator: karli.olsen@oregonstate.edu

The legislature has completed two and half weeks at a quick pace.  This update provides a progress report on some of the key bills and activities important to OSU and higher education.

Ways & Means Field Hearings

Over the last two weekends, members of the Joint Ways & Means Committee have conducted hearings in Salem, Portland, Hermiston and Madras to enable citizens to address concerns about possible funding reductions associated with the state’s projected $1.8 billion shortfall, as well as ways in which the state could increase revenues to close the budget gap.  We deeply appreciate students and advocates who have testified in support of funding for higher education and OSU programs and encourage you to participate in the remaining hearings this month in Ashland, Eugene, and Tillamook. (See details below.)  Topics relevant to OSU addressed during these hearings have so far included:

  • Support for at least a $100 million increase sought by Oregon’s public universities to achieve a comparable level of funding to the current biennium and needed to avoid unaffordable tuition increases. [See a letter from university leadership across the state in support of the $100 million investment here];
  • Recovery of $9.4 million in budget reductions to the OSU Statewide Public Service Programs – the Extension Service, Agricultural Experiment Station, and Forest Research Laboratory [Click here for comprehensive information regarding the advocacy effort aimed at SB 805 for the OSU Statewides];
  • Investment of $69.5 million in state bonds to expand the OSU-Cascades campus [Click here for comprehensive information about the expansion of OSU-Cascades]; and
  • Fully funding the Opportunity Grant – the state’s need-based student financial aid program for community college and university students.

 

Students at the Madras hearing on Saturday, Feb. 18th.

 

Bills of Note

Expansion of the OSU-Cascades Campus (HB 2782)

On Thursday, 2/23, the House Higher Education Committee will consider HB 2782 which will fully fund the $69.5 million expansion of the OSU-Cascades campus as sought by the OSU Board of Trustees.  Advocates from the Central Oregon community will be testifying in support of the bill and meeting with legislators throughout the day.  See information regarding the campus expansion here(OSU support for the full expansion is contingent upon full funding for the capital projects sought by all seven of Oregon’s public universities.)

Statewide Public Service Programs (SB 805)

Despite increasing revenues, the Governor recommended no funding increases for the Oregon State University Statewide Public Service Programs – OSU Extension, Agricultural Experiment Station, and Forest Research Laboratory.  The proposal would erode approximately 70% of the $14 million funding increase achieved by a broad coalition of natural resource, conservation, and human service advocates during the 2015 session.

In response, a bicameral, bipartisan group of legislators has introduced SB 805 which would appropriate a $9.4 million increase for these programs in the 2017-19 biennium to enable them to operate at their continued service level.

See comprehensive information regarding the advocacy effort for the OSU Statewides here.

Open Education Resources (HB 2729)

In 2015 legislators allocated $700K to the Higher Education Coordinating Commission (HECC) to work with universities and colleges to develop open education resources, also known as OERs or “free textbooks.”  Despite the significant savings to students that accrue from developing and dispersing OERs, the HECC chose not to seek continued funding for this program.  Legislators have introduced HB 2729 to continue funding into the 2017-19 biennium, which the House Higher Education Committee will consider on Thursday, 2/23.  At play in considering future funding is the degree to which funding should go to the development of new OERs vs. encouraging faculty at community colleges and universities to use OERs that are already available.  OSU faculty member Lindsay Biga is scheduled to testify on the issue on Thursday.

Veterans Benefits

SB 143:  Using lottery funds made available by Measure 96, which was approved by voters in the November 2016 election, this bill will provide grant funding to universities and community colleges to improve services to veteran-students.  The House and Senate Veterans Committees have both held hearings on the bill and may develop a funding recommendation to be sent to the Joint Ways & Means Committee, which will ultimately consider the bill.

HB 2565:  This bill makes improvements in legislation passed during the 2015 session that established a priority registration process for veterans attending public universities and community colleges.  Universities and veterans worked together over the last year to develop the bill in order to ensure that veterans will receive priority when registering for classes throughout their matriculation, rather than just for the first term of attendance.

Establishment of an Independent Science Board

SB 198:  This bill seeks to enact the recommendations of a task force established by legislation passed during the 2015 session.  On Wednesday 2/22 OSU Associate Dean Dan Edge is slated to testify on the bill before the Senate Environment and Natural Resources Committee.  The bill involves a biennial expense of approximately $1 million, which may prove problematic for its legislative future.

PERS Reform

Last week OSU provided information to employees regarding PERS reform legislation.  The Senate Workforce Committee has conducted a number of sessions considering the PERS system.  For a memo outlining its proposed process and a power point overview click here.  The memo outlines the criteria the committee will use to evaluate proposed reforms, including:

  • Constitutionality
  • Order of Magnitude in Savings
  • Actuarial Soundness
  • Impact on Employer Contribution Rates
  • Impact on State and Local Budgets
  • Impact on Public Employee Benefits
  • Impact on Public Employee Workforce
  • Equitability of Costs and Benefits to Public Employees
  • Administrative Feasibility

 

Upcoming Events:

  • Monday, February 20th – Kathie Dello, Associate Director of the Oregon Climate Change Research Institute, will present the Third Oregon Climate Assessment Report (2017) to the Senate Environment & Natural Resources Committee.
  • Wednesday, February 22nd – the House Committee on Economic Development and Trade will hold a “Food Industry Overview” informational hearing, which will feature OSU’s Dave Stone discussing OSU’s Food Innovation Center in Portland, and College of Agricultural Sciences Dean Dan Arp discussing OSU’s proposed $18 million Quality Food and Beverage capital investment – $9 million in state bonds matched by $9 million in industry and philanthropic investments. Click Here for a recent release regarding a $1.5 million contribution by the Tillamook Creamery Association toward this project.
  • Wednesday, February 22nd – The Office of Economic Analysis will present the next quarterly state revenue forecast to the Senate Revenue Committee. The forecast will indicate whether revenues are on track to support state funding for the current biennium, while also providing legislators with a more current estimate of state revenues for the 2017-19 biennium.  Although the analysis may show marginal changes up or down in state revenues, the structural issues – PERS and Medicaid costs among them – that significant in the forecasted $1.8 billion shortfall for the next biennium are not expected to change significantly.  For access to the forecast when it is released on Wednesday, click here.
  • House Higher Education committee hearings on OSU-Cascades Expansion and OERs (see above).

 

Remaining Ways & Means Field Hearings

Friday, February 24 — Ashland

5 to 7 p.m.

Rogue River Room

Southern Oregon University

1250 Siskiyou Blvd, Ashland

Saturday, February 25 — Eugene

1 to 3 p.m.

Rooms 308-309 Building 17 (The Forum)

Lane Community College

4000 E 30th Ave, Eugene

Friday, March 3 — Tillamook

6 to 8 p.m.

Officer’s Mess

Port of Tillamook Bay

6825 Officers Row, Tillamook

 

Beaver Caucus Day (Wednesday, March 1)

Head over to the Beaver Caucus website for more about OSU advocates meetings and a reception with legislators in Salem.

OSU Statewides Day (Thursday, March 2)

Advocates from across Oregon will be meeting with legislators throughout the day in support of SB 805, which would recover funding cuts proposed in the Governor’s Recommended Budget for the Extension Service, Agricultural Experiment Station, and the Forest Research Laboratory.

Save the Date:  OSU Day at the Capitol  (Thursday, April 20)

 

For information about OSU’s Legislative Priorities for 2017: 

http://leadership.oregonstate.edu/sites/leadership.oregonstate.edu/files/trustees/agendas-minutes/tab_w_legislative_update.pdf

 

Other legislative issues:  We have identified over 600 bills that may be of interest to the OSU community due to impacts on our education, research and outreach mission.  If you would like information regarding a particular bill that may be of interest or if you have questions or comments, please do not hesitate to contact us.

Jock Mills, Director:  jock.mills@oregonstate.edu

Karli Olsen, Coordinator:  karli.olsen@oregonstate.edu

Save

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Students, Faculty, Staff, and Presidents Call for Increased Funding for Public Universities

In a letter to legislative leaders, students, faculty, staff, and presidents of the public universities called for at least another $100 million in state investments from the level proposed last month by Governor Kate Brown.

Our unified funding request highlights and supports the following reality: To keep tuition increases below five percent at most universities, and also preserve most financial aid and student support services, state investment in the Public University Support Fund (PUSF) will need to increase by at least $100 million above the Governor’s Budget—in the 2017-19 biennium.

You can find a copy of the letter on the OSU Government Relations website and coverage of the accompanying press release in The Oregonian.

 

Legislators Organize for the 2017 Legislative Session

Legislators met last week to organize for the 2017 legislative session, which will begin in earnest on Wednesday, February 1st.  As expected, they elected leadership – Sen. Peter Courtney (D-Salem) will serve in an unprecedented eighth term as Senate President and Rep. Tina Kotek (D-Portland) will serve in her third term as Speaker of the House.  The leaders have announced committee rosters, and the approximately 1,700 bills that had been filed in December are now posted on the legislative website.

The Speaker and Senate President have referred the first wave of bills to the relevant committees for consideration.  We expect two or three more waves of new bills in the coming weeks as legislators complete the drafting process.  We will be notifying various colleges and principals in the next week with information regarding bills that affect OSU’s education, research, and outreach activities.  If there is a particular bill that is of interest or concern to you, don’t hesitate to let us know.

Most higher education-related bills will likely fall under the jurisdiction of the following legislative committees and subcommittees:

Joint Ways & Means Committee

Co-chaired by Sen. Richard Devlin (D-Tualatin) and Rep. Nancy Nathanson (D-Eugene), this committee is responsible for appropriating funds. Its Subcommittee on Capital Construction will determine how the state’s debt capacity will be used to finance long-term construction projects.  The Subcommittee on Education will allocate operating funds across the education continuum from early childhood to post-graduate and career education.  With significant turnover in the House since the 2015 session, House membership and leadership in the Ways & Means process has also changed.

Ways & Means Capital Construction Subcommittee

  • Sen. Fred Girod (R-Stayton), Co-Chair
  • Senate President Peter Courtney (D-Salem)
  • Sen. Richard Devlin (D-Tualatin)
  • Rep. Paul Holvey (D-Eugene), Co-Chair*
  • Rep. John Huffman (R-The Dalles)
  • Speaker Tina Kotek (D-Portland)
  • Rep. Greg Smith (R-Heppner)
  • Rep. Jennifer Williamson (D-Portland)*

*Indicates change from previous legislative session.

Ways & Means Education Subcommittee

  • Sen. Rod Monroe (D-Portland), Co-Chair
  • Sen. Chuck Thomsen (R-Hood River)
  • Sen. Arnie Roblan (D-Coos Bay)
  • Rep. Barbara Smith Warner (D-Portland), Co-Chair*
  • Rep. Diego Hernandez (D-Portland)*
  • Rep. John Lively (D-Eugene)*
  • Rep. Julie Parrish (R-Tualatin/West Linn)*
  • Rep. Gene Whisnant (R-Sunriver)*

*Indicates change from previous legislative session.

The Senate Education and House Higher Education and Workforce Development Committees will consider education policy issues.  While the Senate committee membership has remained fairly static, turnover in the House has resulted in significant changes, including the chair.

Senate Education Committee

  • Sen. Arnie Roblan (D-Coos Bay), Chair
  • Sen. Sara Gelser (D-Corvallis/Albany)
  • Sen. Mark Hass (D-Beaverton)
  • Sen. Dennis Linthicum (R-Klamath Falls), Vice Chair*
  • Sen. Jeff Kruse (R-Roseburg)

*Indicates change from previous legislative session.

House Education and Workforce Development Committee

  • Rep. Jeff Reardon (D-Happy Valley), Chair
  • Rep. Gene Whisnant (R-Sunriver), Vice-Chair
  • Rep.Teresa Alonso Leon (D-Woodburn)*
  • Rep. Dallas Heard (R-Roseburg)*
  • Rep. Janelle Bynum (D-Clackamas)*
  • Rep. Mark Johnson (R-Hood River)
  • Rep. Brian Clem (D-Salem)*
  • Rep. Werner Reschke (R-Klamath Falls)*
  • Rep. Janeen Sollman (D-Hillsboro)*

*Indicates change from previous legislative session.

Rep. Reardon is new to chair a committee, though he served on the committee last session along with Reps. Whisnant and Johnson.  Reps. Alonso Leon, Bynum, Reschke, and Sollman are serving in their first terms.

 

Next Steps in the Budget Process

On Thursday, January 18th, the Ways & Means co-chairs will issue a budget that will reflect a number of changes from the budget Governor Brown proposed in early December.  For one, the co-chairs’ budget will not include new revenues from tax increases since the 3/5 majority required to pass new taxes is not a given.  As a result, state budgets will need to internalize the expected $1.7 billion state revenue short fall.

In addition, the co-chairs’ proposal may hold state agencies at their “continuing service levels” (CSL) – the amount of funding needed to provide the same level of service during the 2017-19 biennium as was provided during the current biennium.  Under this approach, any increases over CSL that the Governor may have created in her budget could be eliminated in addition while also reflecting the statewide shortfall.  Based on comments from Ways & Means Co-Chair Sen. Richard Devlin in a recent report in The Oregonian, it’s possible higher education could see some increases, but certainly not the $100 million sought by the students, faculty and presidents of the seven public universities.

 

OSU’s Legislative Priorities

OSU’s Board of Trustees will consider the university’s legislative priorities for the 2017 session at its meeting on January 20th. You can find a summary here.

 

For more information

To subscribe to our updates, contact Karli Olsen at karli.olsen@oregonstate.edu

If you have questions or thoughts regarding any of the information presented here, contact Jock Mills at jock.mills@oregonstate.edu

Yesterday’s update regarding the Governor’s recommended capital budget had a couple of glitches and should have included a broader discussion regarding the OSU-Cascades project.

OSU-Cascades Campus Expansion

OSU is seeking, and the HECC has recommended, a $69.5 million campus expansion for OSU-Cascades which includes:

  • $20 million in site reclamation and campus infrastructure improvements necessary for construction;
  • $39 million in bonds for a new academic building (matched by $10 million in donor funds);
  • $10 million in bonds (matched by $5 million in student fees); and
  • $500,000 for a renovation of the Graduate Center.

The Governor’s recommended budget included the first $20 million for site preparation and infrastructure improvements.  (This element was endorsed by all seven university presidents.)

Governor Brown’s commitment of $20 million in her recommended capital budget to prepare the construction site for the expansion of the OSU-Cascades campus is a significant step in the right direction.  The university is grateful for her recognition of the need to increase higher education capacity in this underserved region.  Earnest money of this magnitude clearly demonstrates a commitment to expand the campus, but it will not result in improved services to students in the region in the near future.

As the Governor recognized in her comments, the budget involves many difficult decisions.  There is still much to be done to address the needs of students and employers in the Central Oregon region.  Central Oregon is geographically isolated from other universities and OSU-Cascades is well positioned to support HECC’s charge to serve underrepresented, first generation, and rural students.

Another academic building is desperately needed in Central Oregon to accommodate the enrollment growth the region anticipates in the next few years at OSU-Cascades.  At its current capacity the 10-acre campus can serve no more than 1,890 students; enrollment is currently 1,122.

OSU and the Central Oregon region look forward to continuing this conversation with the Governor and Oregon legislators, and working together to find opportunities that could fully fund the project.

 

University Capital Funding

The HECC Agency Request Budget prioritized the original “Tier One” projects recommended by the seven university presidents earlier this year. At the request of the Governor, the HECC also prioritized additional OSU-Cascades projects that had not been included in the Tier One.  In November, UO sought additional state capital as a partial match for its Knight Campus project.  At that time, the HECC raised the rankings of two Cascades projects – the Site Reclamation for $9 million and Infrastructure for $11 million and inserted the Knight Campus project for $100 million at #13.  This resulted in the projects originally ranked at #11 or below all moving down three steps, including the OSU Fairbanks project moving from #13 to #17 (out of a total of 20 projects).

The GRB recommends $269.6 million in capital support.

Funded Projects:

  • ALL – Capital Improvement and Renewal:  $45.7 million
  • PSU – Grad Education Building:  $40.5 million
  • OSU – Quality Food & Beverage Building:  $9 million
  • OSU – Gilkey Hall Renovation:  $3 million
  • EOU – Information Technology Equipment Facility:  $1.2 million
  • OSU – Cordley Hall Renovation Phase I:  $15 million
  • OIT – Cornett Hall Renovation:  $38 million
  • UO – Classroom Building:  $44 million
  • SOU – Central Hall Deferred Maintenance:  $6 million
  • WOU – Oregon Military Building Renovation:  $7.7 million
  • OSU-Cascades – Site Reclamation:  $9 million
  • OSU-Cascades – Infrastructure:  $11 million
  • UO – Knight Campus:  $34 million
  • EOU – Loso Hall Renovation, Phase I:  $5.5 million

New project not previously considered by HECC:

All campuses, including community colleges, campus security measures allocated via competitive bid (based on recommendations by the Governor’s campus security task force):  $15 million

Eliminations:

  • OSU – Fairbanks $11 million
  • OSU-Cascades – Academic Building $39 million
  • OSU-Cascades – Student Success Center $10 million
  • OSU-Cascades – Graduate and Research Center $490,000
  • EOU – Fieldhouse $6 million
  • WOU – IT Building $5.5 million

Reductions:

  • PSU – Graduate School of Education project reduction of $4.5 million
  • OIT – Cornett Hall project reduction of $2 million
  • All – $20 million reduction to $45 million for seven campuses for capital renewal and maintenance (2015-17 funding was at the $65 million level)
  • UO – $66 million deferral of the Knight challenge grant

Governor Brown issued her recommended budget (GRB) for the 2017-19 biennium yesterday.  Facing a projected state budget shortfall of at least $1.4 billion compounded by rising personnel and health care costs, the GRB includes many difficult decisions.  This update provides a summary of the major elements affecting higher education in Oregon.  To review the entire budget document:  http://www.oregon.gov/das/Financial/Documents/2017-19_gb.pdf

In short, despite increasing costs driven by state-mandated employee health and retirement benefit programs, the GRB provides no programmatic increases for the state’s seven universities.  The university presidents, who had sought at least a $100 million increase in order to meet current service levels while keeping tuition increases at a manageable level, issued the following statement:

“Oregon’s public universities commend Governor Brown for prioritizing students and higher education in her recommended budget. Ensuring a college degree is accessible to every Oregonian without taking on a lifetime of debt is how our state will remain vibrant and competitive. With limited resources, Governor Brown took great strides to protect students. The investments outlined in her budget will mean Oregon does not balance its books at the expense of those who are most vulnerable.

“As the Legislature weighs difficult budget choices, we urge lawmakers to increase operating funds beyond the Governor’s budget. By doing so, every campus can keep tuition at a manageable level for the next two years and maintain vital support services that keep students on track to graduate. If we want to enable more Oregonians to earn college degrees at an affordable level of tuition, additional resources will be needed.

“Public universities are educating the workforce and leaders of tomorrow, and we act as incubators of ideas and solutions that can change the world. Oregon must protect students by recognizing that higher education is a fundamental necessity for a robust economy and a living wage. We stand as partners with the state, ready to work with the Legislature and the Governor to address the challenges that lie ahead.”

In comparison, K-12 State School Fund received a 9% increase in funding, for a total of $8 billion.  This figure is approximately $500 million below what the Oregon School Boards Association says local schools need to maintain current service levels.

 

The Public University Support Fund (PUSF)

The PUSF is funded at the 2015 Legislatively Approved Budget (LAB) level of $667.3 million.  Flat funding when costs are increasing means that universities will need to turn to tuition increases, personnel reductions, service cuts, and other actions to balance their budgets. The GRB was a significant improvement over Department of Administrative Services (DAS) internally driven proposals that would have restricted university access to general funds to support retirement and health insurance cost increases.  The Governor sought to shield public universities and students from taking a disproportionate cut, but since nearly 70% of the academic personal costs are born by tuition revenues, 70% of those cost increases will be covered by tuition increases.

The university presidents had sought to insulate students from these cost increases with their request for at least a $100 million general fund increase, which would have driven the PUSF to $765 million.  Now it falls to the legislature to determine whether or how this gap can be filled.  Legislators initially convene in January for organizational purposes, and then go into full business mode the first week of February.

 

OSU Statewide Public Service Programs – Agricultural Experiment Station, Extension Service, and Forest Research Laboratory

The GRB proposes no increases for the OSU Statewide Public Service Programs – the Extension Service, Agricultural Experiment Station, and Forest Research Laboratory, known as the “OSU Statewides.”  This spring, the OSU Board of Trustees sought a $9.4 million continued service level increase for these programs – simply the amount of funding that would be needed to provide the same level of service next biennium as what was provided during the current biennium.

Last session, after a year of activism by a broad coalition of advocates, the legislature approved a $14 million increase for these programs.  The resulting $118 million funding level enabled OSU to hire some 40 new research and extension positions across the state to address significant challenges facing Oregon family farmers, low income families, and Oregon’s natural resources enterprises.  This was a monumental step reversing a 15-year decline when these vital programs were forced to eliminate positions that served a diversity of Oregonians in all 36 counties.

The GRB will have the effect of eliminating nearly 70 percent of the programmatic increases the legislature approved last session.  Because the vast majority of these funds are used to cover personnel costs, the primary tool the Statewides have to manage their costs during budget reductions is through the elimination of positions.

While academic programs at OSU rely on state general funds, they also are able to turn to tuition when the legislature cuts their funding.  The Statewides do not have access to tuition revenues and so feel the full impact of state funding reductions.  However, because many of the Statewides’ positions are “shared appointments” which have both teaching and research responsibilities, there will also be impacts on the university’s education enterprise.  The elimination of research positions also inhibits OSU’s ability to compete for federal funding.  OSU estimates that every state dollar invested in the OSU Statewides leverages nearly $10 in economic benefits to the state.  The Governor’s budget puts these economic returns at significant risk.

It is too early to identify the precise number and location of the positions that could be eliminated as a result of flat-funding the Statewides.  The first step available to program managers is to leave position vacancies un-filled when they occur.  Managing through attrition is not a strategic approach to addressing Oregon’s challenges in the coming biennium, but it is the only practicable alternative currently open to the Statewides.

In order to maintain the same level of service for the Statewides the legislature will need to find $9.4 million in general fund resources.  OSU is committed to work with legislators and the broad coalition of stakeholders who have supported these programs in the past to find practicable solutions for addressing the funding challenges facing the Statewides in the 2017-19 biennium.

Outdoor School:  Due to the passage of Measure 99, which established and funded “Outdoor School” with $44 million in Lottery Funds, the GRB also includes a $44 million increase to the OSU Extension Service which, under the measure, is responsible for administering the funds and developing the curriculum for the program.  OSU has estimated that about $1.6 million of these funds will be needed to meet Extension’s responsibilities under this program.  Despite the ballot measure provisions, the legislature will ultimately make the final funding decisions, both for the amount of lottery funding that will be provided to local school districts and to Extension to administer the program.

 

Other Highlights in the GRB

Sports Lottery (Title IX Scholarships):  The Governor eliminated all funding for this program which under state statutes is supposed to provide 1% (approximately $12.5 million in 2017-19) of the economic development fund from the state lottery fund for scholarships for athletes and graduate students. Most of the scholarships are used to meet Title IX requirements for women athletes.  In previous legislative sessions (including 2015) legislators have capped the funding for this program at $8.2 million.  Previous Governors have also recommended eliminating funding for this program, but have faced legislative opposition.  The seven public universities will mount another campaign in 2017 to recover these funds.  During the current biennium, OSU received $1 million.

Public University State Programs/ETIC:  The GRB essentially provides flat funding for multiple state programs administered by the universities.  Funding for programs that are administered or located at OSU include:

  • OSU Marine Research Vessel Program:  $638,929
  • OSU Fermentation Program:  $1.3 million
  • OSU/UO Center for Advanced Wood Products:  $3.5 million
  • OSU Natural Resources Institute:  $411,420
  • OSU Climate Change Research Institute:  $322,492
  • ETIC Sustainable Funding:  $25.2 million (distributed by a formula to all seven universities; about $14 million to OSU in 2015-17)
  • Signature Research: $1.1 million (distributed among OSU, PSU, and UO; about $500,000 to OSU in 2015-17)

Oregon Talent Council/Oregon Inc./Signature Research Centers:  The GRB indicates the Oregon Talent Council is “winding down” and the work on the Talent Development Plan will be continued by one of the former OTC partners.  It is funded at $200K for one limited duration position in 2017-19.  There is not sufficient detail in the GRB to provide information regarding the other programs.

Student Financial Aid: The Governor increased funding for the Oregon Opportunity Grant by approximately 8% from last biennium, bringing the total funding amount to $151 million.

Community Colleges/Oregon Promise:  The Community College Support Fund was also held at 2015-17 LAB levels at $550 million.  The GRB includes $39.7 million for the Oregon Promise “Free Community College” program, an increase of over $29 million to expand the program to cover two new cohorts of students over the next biennium.

OHSU:  Funding for OHSU is at the 2015-17 LAB levels, consistent with universities and community colleges.

 

Higher Education Coordinating Commission (HECC) Agency Budget

The GRB reduced HECC’s General Fund Budget by 3% from the 2015-17 LAB.  The total funds budget for the agency was reduced by 11%.  The GRB included the following HECC Policy Option Packages (“POPs):

  • Replacement of the Financial Aid Management Information Systems
  • Addition of internal audit and human resources positions
  • Funding for issuance of community college and university bonds

The GRB also included targeted reductions in the HECC budget, including:

  • An 11% reduction in positions through the elimination of limited duration position authority
  • Reductions in personnel services and supplies
  • Reductions in GED, ASPIRE, and match against federal Perkins Loans
  • Reclassification of 3 positions

 

Business Oregon

The Governor’s Budget removes the Small Energy Loan Program (SELP) from the Department of Energy and places it in Business Oregon and includes $2.7M for administration and to initiate a recapitalization of the program.  Specific information regarding the Signature Research Centers is not enumerated in the budget and will be provided at a later date.

 

University Capital Funding

The HECC Agency Request Budget prioritized the original “Tier One” projects recommended by the seven university presidents earlier this year. At the request of the Governor, the HECC also prioritized additional OSU-Cascades projects that had not been included in the Tier One.  In November, UO sought additional state capital as a partial match for its Knight Campus project.  At that time, the HECC raised the rankings of two Cascades projects – the Site Reclamation for $9 million and Infrastructure for $11 million and inserted the Knight Campus project for $100 million at #13.  This resulted in the projects originally ranked at #11 or below all moving down three steps, including the OSU Fairbanks project moving from #13 to #17 (out of a total of 20 projects).

The GRB recommends $269.6 million in capital support.

New Funded Projects:

  • ALL – Capital Improvement and Renewal $45.7 million
  • PSU – Grad Education Building $40.5 million
  • OSU – Quality Food & Beverage Building $9 million
  • OSU – Gilkey Hall Renovation $3 million
  • EOU – Information Technology Equipment Facility $1.2 million
  • OSU – Cordley Hall Renovation Phase I $15 million
  • OIT – Cornett Hall Renovation $38 million
  • UO – Classroom Building $44 million
  • SOU – Central Hall Deferred Maintenance $6 million
  • WOU – Oregon Military Building Renovation $7.7 million
  • OSU-Cascades – Site Reclamation $9 million
  • OSU-Cascades – Infrastructure $11 million
  • UO – Knight Campus $34 million
  • EOU – Loso Hall Renovation, Phase I $5.5 million

Eliminations:

  • OSU – Fairbanks $11 million
  • OSU-Cascades – Academic Building $39 million
  • OSU-Cascades – Student Success Center $10,000
  • OSU-Cascades – Graduate and Research Center $490,000
  • EOU – Fieldhouse $6 million
  • WOU – IT Building $5.5 million

Reductions:

  • PSU – Graduate School of Education project reduction of $4.5 million
  • OIT – Cornett Hall project reduction of $2 million
  • All – $20 million reduction to $45 million for seven campuses for capital renewal and maintenance. (2015-17 funding was at the $65 million level).

No ranking changes except what resulted from project eliminations:  The GRB included capital funding of $75.2 million for eleven projects as well as $15 million in lottery bonds for competitive grants for public safety improvements at Oregon’s public universities and community colleges.