Thank you to the students and advocates from all seven public universities who came to the Capitol on Thursday, February 11 to thank legislators for increased funding in 2015 and to urge for continued investments in Higher Education.

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A Brief Overview of the Short Session…so far

Legislators have now completed two weeks of the 2016 short session. Under Oregon’s constitution they are expected to adjourn in early March. Since Oregon’s birth on Valentine’s Day 157 years ago, the Beaver State managed with a legislature that met every other year. As Oregon entered the 21st century, legislators found themselves meeting frequently in special sessions aimed at balancing the state’s budget as state revenues whipsawed with economic booms and busts.

The legislature hasn’t been able to do anything about Oregon’s heavy reliance on state income taxes – which contributes to the instability, but in 2010, it did refer a constitutional measure to the voters that provided for annual sessions to enable mid-course corrections over the two-year budget cycle. After voters overwhelmingly approved the measure, the legislature now meets for 160 days in odd-numbered years to establish a biennial budget and consider policy matters. And, in even years, it has 35 days to make whatever adjustments might be needed to balance the budget. We are in the midst of the state’s third short session.

Lawmakers have yet to establish sideboards on what measures are appropriate for consideration during short sessions. For this session, leadership sought to reduce the load by allowing each legislator to introduce only two bills. (Sen. Arnie Roblan [D-Coos Bay] recently suggested that legislators be limited to half a bill for the short session, thus not only limiting the number of bills but also requiring legislators to join together in drafting them.) When the legislators convened two weeks ago they faced a wide range of well over 200 bills and a highly charged, divisive atmosphere.  Few would disagree with New York lawyer, newspaper editor, and politician Gideon J. Tucker who said in 1866, “No man’s life, liberty, or property are safe while the legislature is in session.” Part of the divisiveness is because when the legislature is in session, there isn’t a successful advocate who will bypass the opportunity to engage lawmakers in a cause.

Another reason for the current divisiveness is the state’s initiative and referendum process, which gained national attention in the early 1900’s and has been modeled by many other states. This year, activists are circulating petitions for the November election that would create a state gross receipts tax and increase the minimum wage. Legislators have about three weeks to pass more thoughtful legislative alternatives designed to divert these initiatives.


The Minimum Wage (SB 1532)

A substitute for the new corporate tax has eluded legislative consideration so far this session, but Governor Brown and Democratic leaders have sought to devise a phased-in minimum wage proposal that would pre-empt the November ballot initiatives seeking to increase the state’s minimum wage from the current $9.25/hour rate.

After hours of debate and procedural wrangling on Thursday, by a vote of 16-12, the Senate approved SB 1532A, which would phase-in minimum wage increases across three different regions based on their level of economic activity – the Portland metro area, a middle tier which includes Benton County and OSU, and rural/economically stressed counties. Sen. Betsy Johnson (D-Scappoose) was the lone Democrat joining the chamber’s 11 Republicans in voting against the bill. (Two Senators – Sen. Floyd Prozanski [D-Lane/Douglas Counties] and Sen. Jackie Winters [R-Salem] were unable to vote due to family and health issues.)

On Friday, as the bill headed to the House for consideration, Speaker Tina Kotek (D-North Portland) announced a change in the make-up of the committee that is likely to consider the bill, replacing Democrat Brent Barton (D-Clackamas County) with Rep. Peter Buckley (D-Ashland). Buckley also co-chairs the Joint Ways & Means Committee which oversees the state’s spending. For coverage of the issue see The Oregonian.

Impact of the Minimum Wage Increase on Public Universities. The minimum wage hike will vary in how it affects universities, based on their locality, the number of workers at minimum wage, and the source of funds – tuition, student fees, or other funds such as housing and dining with employ a large number of minimum wage workers. Both EOU and OIT may be largely unaffected because they are headquartered in non-urban or “economically distressed” counties. (The bill does not directly address what to do about universities with employees across the multiple wage rate zones.)

In response to a legislative request, OSU calculated the potential impact under the assumption that university minimum wage employees would earn the “middle tier”, since the vast majority of minimum wage earners are in Corvallis. The fiscal impacts created by raising the minimum wage increase over time, not only because the wage rate increases over the next six years, but also because as the wage increases, more employees qualify for the increase. (The universities’ analysis did not address the impacts of “compression” – the pressure for increased wages from workers at the lower range of the pay scale but who earn more than the minimum rate.)

For the first year of the bill’s implementation, OSU identified 4,523 employees who would be affected by the bill if it were enacted. Of these, 4,417 (98%) are students. The proportion of students declines slightly over the years as the minimum wage is phased in, but the overall number of students seeing a wage increase would grow to 7,214 by the year 2023.  A total of 7,745 employees would be expected to be paid the minimum wage by that year. Because many minimum wage employees are part-time, the number of “full time equivalent” (FTE) employees is significantly lower – approximately 620 FTE in 2017, growing to 1,087 in 2023. (All of these figures assume that the university would not respond to the wage increase by decreasing the number of positions earning the minimum wage.)

Funding Impacts. Implementing the bill in 2017 would involve a $1.3 million increase in costs across all seven universities for the remainder of the current biennium. Almost half – $602,000 – would apply to OSU across all of the university’s activities whether paid for by general funds, federal funds, fees, or room and board. Assuming that OSU would not decrease the number of employees as a result of the increase in minimum wage, the OSU figure would grow significantly each year over the next three biennia: $771,000 per year in 2017-19 biennium, to well over $1.5 million per year in future biennia.

Where the money needed to fund the increases will come from has yet to be determined. The preliminary analyses indicate that a quarter of the 2017 costs will accrue to state education and general (E&G) activities paid for either by tuition or general fund appropriations. A third of the costs will accrue to university housing and dining; and a quarter will accrue to activities supported by student fees. The latter two involve funding streams that are entirely paid for by students.

Since the bill may undergo a number of changes over the remainder of the session, it is far too early to project exactly how the minimum wage increase may affect OSU and OSU students. It is likely, however, that while OSU student workers will be the primary beneficiaries of a minimum wage increase under SB 1532, they may also bear the burden of the increased tuition, fees, and housing and dining costs needed to pay these wages. It is also possible that those who receive work-study funding may see their wages increase, but their hours reduced.  State appropriations may help address the impacts to activities supported by “E&G”, but housing and dining and student fee supported activities cannot be supported by state appropriations.


University Priorities

Legislators are also facing pressures to resolve issues left unfinished during the 2015 session as well as emerging opportunities or concerns that hadn’t surfaced a year ago. Legislative rules require that all but the budget writing, revenue, and rules committees had to complete their work on “chamber of origin” bills by last Thursday. So, as of last week, House bills not reported out by House committees and Senate bills not reported out by Senate committees are for most practical purposes “dead.” Because provisions in “dead” bills can always be stuffed into a bill that is still alive, no bill is truly dead until the last gavel falls. So far, all of the university priorities remain alive and active.

University Venture Development Tax Credit:  HB 4072 would extend the UVDF tax credit for six years enabling donors to receive tax benefits for contributions to a fund that supports the transition of university inventions from the laboratory to the marketplace. After two hearings, the bill is still alive and under active consideration by the House Revenue Committee, which is not constrained by the legislative calendar for approving bills. We anticipate action on this bill sometime in the coming week.

Increased Funding for Universities: Universities entered the session seeking at least a portion of the additional $55 million needed to bring them to the $755 million target sought during the 2015 legislative session.  Given concerns over costs in future biennia, we continue to work for incremental increases to be included in the end-of-session omnibus budget bill.  Additional funding would be targeted at reducing student debt and increasing persistence and graduation rates.

University Investments in Equities:  HJR 203 is a constitutional amendment referred by the legislature for consideration on the November 2016 ballot. It would enable universities to invest funds in common stocks. A similar provision was included in the bill that established university governing boards during the 2013 session, but subsequent legal opinions indicate that a constitutional amendment will be needed. Last Thursday, the bill passed the House by a vote of 55-1 and it has now been referred to the Senate Rules Committee for consideration.

Marine Energy:  Members of the bi-partisan Coastal Caucus have sent a letter to the Ways & Means Co-Chairs in support of $1.5 million for the research and development of marine energy on the Oregon coast. $1.25 million of this funding would enable OSU to compete for a $5 million federal grant.  Over the next two biennia this grant could grow to $40 million. Action on this matter is expected to occur when the Joint Ways & Means Committee considers the end-of-session omnibus budget bill.

Lodging Tax:  HB 4146 would double the statewide “transient lodging tax” from one to two percent. In the initial years the increase would support activities associated with 2021 international track and field championships to be held in Eugene. Because of OSU’s close proximity, our track & field facilities are likely to be involved as a potential venue, and may ultimately qualify for investments that will likely be under consideration during the 2017 legislative session. The bill is currently under consideration by the House Revenue Committee and is likely to move this week.


Other Bills of Note, etc.

SB 1540: Calls on the HECC and universities to determine the best method of increasing number of mathematics majors at Oregon universities. This bill was approved by the Senate Education Committee and is currently awaiting a vote on the floor of the Senate.

SB 1558: Limits disclosure of records of college or university student health center, mental health center or counseling center, or records of health professional retained by college or university.  The seven public universities worked with the bill’s sponsor to clarify the requirements of this bill through an amendment.  The bill passed the Senate Education Committee and is currently awaiting a vote on the Senate floor.

SB 1586: Requires universities to undertake a number of activities to encourage students to register to vote.  The seven public universities submitted a statement in favor of the bill, with amendments.  The bill is scheduled for a vote in the Rules Committee this week.  (The Rules Committee is not subject to the legislative calendar for bills.)

HB 4019: Requires universities to provide instate tuition to dependents of Oregon residents who leave the state to serve in public service organizations.  This bill passed the House Higher Education Committee and is awaiting floor consideration, pending a determination of its fiscal impact.

HB 4021: Directs the State Treasurer to study possible refinancing mechanisms for student loans.  The seven public universities submitted a statement in favor of this bill, which was passed by the House Higher Education Committee and passed the floor on a 54-6 votes.  It is awaiting consideration in the Senate Education Committee.

OSU-Cascades Informational Hearing: On Friday, the House Higher Education Committee devoted an entire hearing to the OSU-Cascades Campus, with a comprehensive report from local legislators, CEO Becky Johnson, two students, and local supporters. To view the hearing:

Industrial Hemp: In the coming week we anticipate the House Agricultural and Natural Resources Committee will hear from Jay Noller, Head of OSU’s Crop and Soil Sciences Department, regarding a possible research program for industrial hemp.

If you have questions about this report or any state legislative issues, contact

On Wednesday, Governor Kate Brown issued an outline of her key objectives for 2016, including the short legislative session, which convenes on Monday, February 1. Under Oregon’s Constitution, legislators must adjourn by Saturday, March 5.

  • View the Governor’s Agenda for 2016 here.


One of the most significant items on the Governor’s list is her proposal to increase the minimum wage. The proposal includes a six-year phased-in $13.50/hour statewide wage, with a $15.52 wage for the Portland Urban Growth Boundary to address that area’s higher cost of living. (Oregon’s current minimum wage of $9.25/hour is the nation’s second highest.) Democratic legislative leaders are interested in enacting state minimum wage legislation in February to stave off a November ballot measure that would involve a two-year phase-in of a $15/hour wage.


Legislative budget writers have asked universities to identify the potential fiscal impact of the Governor’s proposal. Impacts will likely involve activities that are funded by tuition and state appropriations as well as activities that are funded by auxiliary funds (such as athletics and housing and dining). Student fees are also used to support some on campus minimum wage jobs.

  • See The Oregonian’s coverage of the minimum wage proposal here.


A number of the Governor’s other priorities may be of interest to various units at OSU, including:

  • An Executive Order establishing the Governor’s Council on Educator Advancement, charged with coordinating comprehensive support to deliver excellence in teaching through leadership development, mentorship and best practices (yet to be posted);
  • Establishment of a Governor-appointed Campus Safety Working Group (last month OSU provided suggestions for participants in this group);
  • Appointment of a State Resilience Officer to deal with earthquake preparedness;
  • A drought package funding proposal to help local communities plan for and address persistent drought; and
  • A wildfire funding proposal to cover costs incurred during the 2015 wildfire season.


House Republican Leader Mike McLane issued a response to the Governor’s priorities, which you can find here.


University Priorities for the 2016 session

Not included on the Governor’s list of priorities are a number of legislative initiatives supported by OSU and the other public universities in Oregon, including OHSU. Chief among them is the renewal of the University Venture Development Fund (UVDF) tax credit. Reps. Andy Olson (R-Albany) and Dan Rayfield (D-Corvallis) have joined to introduce HB 4072, which would renew the credit for a six-year term. For information on the bill, see our UVDF Fact Sheet.


Universities are also seeking $15 million in increased funding to continue progress made last session to increase student completion rates. While the legislature’s Ways & Means leadership appear to believe that additional funding will be scarce, universities and students contend additional funding is needed to maintain improvements attained during the 2015 session.


Other university priorities include support for a legislatively referred constitutional amendment to enable universities to invest in equities. The original bill that established university governing boards in 2013 included a provision that enabled universities to invest their funds in equities (stocks). The intention was to provide universities with more investment options that could result in both higher yields and greater stability. Subsequent legal opinions indicate that this change cannot be accomplished through statutory changes; the state constitution has to be amended. As a result, the universities are seeking a legislatively approved ballot referral to put the matter on the November 2016 ballot.


Universities are also seeking an equitable approach for developing the 2017-19 budget. Legislation that established universities as independent public entities resulted in state budget writers recommending future budgets that do not include an accurate calculation of Public Employees Retirement System (PERS) and public employee health insurance – Public Employees Benefit Board (PEBB) – costs. During the 2015 legislative session, budget writers determined that a 3.3% increase would be needed to provide the same level of services in the 2015-17 biennium – the “Continuing Service Level” (CSL). Universities claim an accurate calculation of the state-mandated PERS and PEBB costs for the current biennium would have involved at least an 8% CSL increase. Because uncompensated PERS and PEBB costs will be borne by students and will erode current state investments in student success, universities are seeking a legislatively endorsed process by which a more accurate and equitable methodology is used to calculate the CSL for 2017-19.


OSU-Specific Bills

State matching funds for a $5 million Federal Marine Energy Grant. In December, Congress appropriated $5 million to the US Department of Energy to fund a competitive grant to further develop a wave energy test facility. This initial funding could grow over the next three to five years to a federal investment totaling $40 million, with the expectation that successful competitors for the grant will provide at least a 25% match, or $10 million. The total project — including federal and non-federal funding — is expected to be $50 million. Oregon will be competing with other states that are developing their own matching proposals for this long-term funding opportunity. Coastal legislators are pursuing state legislation for 2016 that would appropriate the first installment of $1.25 million in state matching funds to enable OSU to compete for the initial $5 million grant. Last week, the House Energy & Environment Committee agreed to carry the proposal as a committee bill.


The Session Ahead

University Lobby Day: Mark your calendars! All seven universities will be holding a unified lobbying day on Thursday, February 11. Activities for the day will include individual meetings with legislators seeking support for the higher education agenda, as well as a reception. Register to participate here. More detailed information will be forthcoming in the next week. If you have questions, please contact Karli Olsen.


Bill Tracking: The OSU Government Relations Office will be tracking legislation throughout the month-long session. While the volume of bills will not be nearly as great as during the six-month session, timelines will be extremely fast. For example, legislative committees have about ten days to approve bills before the bills become ineligible for consideration. If you are aware of issues that you’d like us to track, please contact Karli Olsen.


Legislative town halls with local legislators:

  • Thursday, January 27, 3:30-5:30, Memorial Union, Journey Room, sponsored by ASOSU. State Sen. Sara Gelser (D-Corvallis/Albany) and State Rep. Dan Rayfield (D-Corvallis) will participate.
  • Saturday, January 30, 10:00-noon, Corvallis/Benton County Library, sponsored by the League of Women Voters. This forum will also include local state legislators.


If you have questions or would like additional information about any of the items above, don’t hesitate to contact us.

Jock Mills, Director,

Karli Olsen, Coordinator,

For Federal matters: Gabrielle Serra, Federal Relations Director,