On Tuesday, December 1st Governor Kate Brown released her proposed budget for the 2021- 23 biennium.
The Governor recommends balancing the $25.6 Billion general and lottery fund budget through a combination of one time funds, $310 million in new revenue, and makes some modest assumptions about continuation of federal Medicaid assistance programs. The budget recommends using $215 million of the Education Stability Fund, and raises $310 million in new revenue through eliminating some tax expenditures (pass through), disconnecting from portions of the federal tax code included in the CARES act, limiting the home interest mortgage deduction to first homes, increasing tax surcharges on distilled spirits, and increasing rural hospital assessment rates. Additionally, the budget also proposes the closure of three prisons and makes some targeted cuts to the Oregon Health Plan.
The budget largely protects higher education from cuts in state funding, here are the highlights for OSU.
Public University Support Fund: $836.9 million General Fund, unchanged from the 2019-21 Legislatively Allocated Budget (LAB), but a net $6.9 million increase with the movement of two OSU programs out of the PUSF (see Statewides and State Programs sections below).
Capital Construction: Cordley Hall ($86 million) and the OSU-Cascades Student Success Center ($13.8 million) were recommended for funding alongside projects at PSU, UO and EOU. An additional $80 million for capital improvement and renewal (CIR) was recommended for the public universities. OSU typically received about a third of CIR funds. The document lists the OSU-Cascades Phase 2 Land Remediation as being recommended, but it was later clarified by the Governor’s office that they intended to recommend the Student Success Center and will make the fix. XI-F bond projects were not included in the recommendation for any of the universities.
OSU Statewide Public Service Programs: $193.0 total funds. The Statewide Public Services Programs, including Outdoor School, are funded at 2019-21 LAB levels. Additional funding comes from moving funding for building maintenance of statewide public services facilities support ($4.1 million General Fund) from the Public University Support Fund to this program.
Public University State Programs: $44.7 million total General Fund. The regular Public University State Programs (including for OSU: OCCRI, Fermentation Science, Marine Research Vessel, Institute for Natural Resources, TallWood, ATAMI, and Engineering Technology Sustaining Funds) are funded at the 2019-21 Legislatively Approved Budget level. The Governor’s Budget moved $2.8 million General Fund for the Veterinary Diagnostic Lab out of the Public University Support Fund and into this program area.
Financial Aid Programs:
- Funding for Sports Action Lottery scholarships was increased slightly to a total of $15.1M. OSU and UO each receive $1,030,000 of these funds for scholarships for student athletes and graduate students.
- The Governor recommended increasing funding for the Oregon Opportunity Grant by $4.7 million (CSL), bringing the total amount to $114.2 million.
- The Governor recommended increasing funding for the Oregon Promise by $1.26 million (CSL), bringing total funding for the program to $42.2 million.
The Governor’s budget is based on the December 2020 revenue forecast, which continued to predict modest revenue growth and shows that state collections had largely recovered from the COVID-19 associated shutdowns that occurred during the spring of 2020. The forecast however did not capture lost revenue associated with current COVID-19 restrictions.
The Legislature will convene on January 19, 2021 and are constitutionally required to adopt a balanced budget no later than June 28, 2021.The state economists will deliver two revenue forecasts before the legislature must conclude their work this summer.
While uncertainty around the logistics and timing of the 2021 session remain, OSU is actively working with the other public universities, faculty, staff, students, and alumni to make the case that lawmakers must increase funding above the levels included in the Governor’s budget. This will be essential to help the institution maintain financial stability. For now, we are grateful that cuts in our state appropriation that we feared over the summer months are not reflected in the Governor’s budget, and are hopeful that we can increase funding by working with legislative leaders over the next 6 months.
The Governor received a question about higher education funding in her press conference this afternoon. When asked, she stated: “I did not have the resources I wanted when building this budget…. My goal is to work with the legislature to find more resources for our universities and community colleges…..universities literally open up the world for our students and we need to work to increase funding.”
The Governor was also asked a question about OSU-Cascades during the press conference. She commented: “What I have heard from the [OSU-Cascades] community is that the Student Success Center is really important. In my visits to the university I heard from students who said that ‘honestly, I wouldn’t be able to attend higher education without the presence of this campus in Central Oregon’. I know it is a life-changer for many Oregon students and I look forward to working with the Legislature to fund this particular project.”