Report to UO Senate concerning the IFS meeting April 4/5 2003

The InterInstitutional Faculty Senate meet Friday/Saturday April 4/5 2003 in Salem Oregon. On Friday we had as invited guests Below I present some rough notes to give the flavor of the information we received. Any mistakes in transcription or interpretion are mine alone.

Representative Backlund There is progress in the house. But we have to wait until we get the May revenue projections to know what we have to look at. We truely must prioritize our core functions. We have asked the agency heads what would happen if we cut 30%. In mid April there might be some shocked groups. There is no consideration of more revenue. Pers is #1 issue in the legislature.

Senator Deckert The State of Oregon is essentially dependent on one main source of revenue - the personal income tax. The proposed budget will have a moment of truth with essentially 3 options:

  1. Get 16+31 votes to pass a budget that will include, for example, around 4.6-4.7 billion for K-12 -- and 6 years ago that was 5.1 billion.
  2. cobble together revenue enhancements affecting tax deducations and credits. Perhaps an across the buard cut in credits. Perhaps a beer and wine tax. Other minor adjustments.
  3. Reform the way we tax ourselves. Growing commitment to do the job with no referals.Option (2) involves some tax reform. Could go at the mortage deduction and cap the interest deducation at 25,000. That would get 50-60 million. Beer and wine tax could get 50-60 million. If went to option 3, could get K-12 out of general revenue. Perhaps a 40% chance.
Senator Morse Spent a lifetime in business. The current budgeting process is fundamentally flawed. Show and tell -- hide and seek. How do we reform systems to make them work better. Need to amend the kicker -- it is poor policy. This is not a real recession that we are in now. We have many opportunities to do things better. We need to focus on how to reform the process and procedures to operate more efficiently. The defining moment is the May forecast. Disconnecting the tax law from the federal law would be a mistake. Come May, we will make decisions and not refer. Will be a defibulator budget. Issue of PERS left unresolved will preclude any meaningful resolution of revenue. Highly centralized systems are inherently inefficient. The board of higher ed is incapable of providing meaningful governance to 7 institutions.

Represenative Susan Morgan We have double digit unemployment in rural areas. There are shortcomings in the way we make public policy. We look to May 15 to build budgets differently. Avoid comming back in a special session. Throw away the concept of current service level. Process is for chairs of subcommittees to talk to agency chairs. Bring in cut lists of 10% to 30% in 2% increments. Factor these into the missions. Prioritize services -- add back list if revenues increase. Also have cut lists. That is sound public policy. No revenue enhancements. Not politically possible to keep revenue enhancements in legislature -- will be refered for vote. People don't trust us. Can't just rely on legislature -- lack of dialogue. Private sector people are really hurting - look at public sector as having best jobs.

Grattan Kerans We are 1.9 billion short. Governors budget calls to spend more than we have. Ways and means hearings on Higher Ed next week. Then put it on shelf until 15 May forecast. Cochairs budget balance at Marche revenue. Horrible budgets -- no way out. Can't pass budgets at that cut leve.l. And don't have 3/5 majority to modify tax credits or exemptions. Only tax at present with viability is beer and wine. Long way from concluding session. The OUS system is going down faster than most of our peers. Worried that admitted students won't get classes and the whole process will be jammed. Second year enrollment management will have to bring enrollment down. No talk of financial exigency. Even at 10% cut level. Could be program implications in 2nd year of bineum. Hard to do much for September. The Higher ed efficiency bill is moving forward as is the capital construction budget.

Mylia Christensen Pebb administrator. Last 5 years represented increasing costs. Compare with other public employees or private sector, PEBB has higher level of benefits -- middle of pack in prescription costs. Hard to work without knowing budget or collective bargaining. In May will announce best thinking at that point and hold stakeholder meetings.

Mark Nelson Cochairs budget will be a lower floor. No continuing service level and no more base budget. Salary and step freeze. Hope to get agreement for flexibility. Significant PERS changes - 8% cap saves 100 million a year. Mortality table change saves 352 million over 2 years. PERS expects 8-12000 more retiring this year than normal. All pools show any tax increase won't pass right now -- have to balance budget without that.

Some campus reports:

  1. PSU looks ok for rest of this year with no major cuts.
  2. OIT has a new budget process -- new provost -- no salary increases for past 2 years. OIT president's salary increased by 22% -- she was lowest paid in system.
  3. EOU President has resigned effective 31 July. Some say that he saw the vote in favor of the union as referendum on his presidency. Enrollment is up and funding is down.
  4. WOU 27 pink slips to classified staff. Huge 20% jump in tuition. Contract negotiations this spring.
  5. OSU search for new president is well under way - squeezing out students with students and fees. State wide services totally tanked. OSU 2007 redesign chugging along. OSU foundation to undertake 400 million capital campaign.
  6. OHSU new dean resigned - 3 high profile position losses -- perhaps for budget outlook.
  7. SOU struggling along. Still trying to hire a provost. Lost 20+ employees.
  8. UO -- topics in senate include financial picture, a 650 million fundraising campaign, and some local issues.

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Respectfully submitted by Peter B Gilkey IFS Senator.