Higher education advocates entered the 2023 legislative session with momentum, but halfway through the session any hopes of massive new investment through Salem’s lean budget models and other spending priorities were dashed.
Although final allocations have not yet been determined, colleges and universities plan funding levels for the next two academic years so that they can fall below current operating costs. Any increase in financial aid is likely to be less than higher education leaders initially requested.
“It’s pretty grim,” said Nick Keogh, legislative director of the Oregon Student Association. “We know that when the state does not invest in higher education, the cost of running our institutions falls on the students.”
Champions of Community Colleges and Public Universities called for increased public funding for higher education last year after intense discussions about how to boost Oregon’s college enrollment and completion rates.
A joint legislative task force on higher education in December proposed several reforms to improve student access to and success at Oregon’s colleges and universities. The task force focused specifically on helping low-income students, students of color, and others who completed college at historically low rates.
The Oregon Higher Education Coordinating Commission has requested a massive new investment in financial aid that could take Oregon from below average to among the best states for aid per student. University leaders commissioned a study that called for increased government investment in Oregon’s post-secondary system.
State and college leaders said they knew they likely wouldn’t get what they asked for all at once, but hoped their proposals would lay the groundwork for meaningful progress.
Neither the governor nor the legislature’s top budgeters have come close to matching this year’s funding vision. Both government Tina Kotek’s budget proposal and the funding framework for budget committee chairs for 2023-25 recommend funding community colleges and universities below the level they might need to maintain operations as they are now – a funding standard called “current service level”.
Kotek’s budget proposes new investments in financial aid, including a $100 million increase in the Oregon Opportunity Grant for low-income students, and continued funding for a $40 million grant that pays indigenous Oregon students to attend college, one of the committee’s top priorities.
But the co-chairs of the Common Ways and Means Committee’s Budget Framework do not recommend any significant increases in the Oregon Opportunity Scholarship and do not mention Tribal Student Scholarship funding at all.
“Overall the document is disappointing, if not particularly surprising,” Kyle Thomas, director of legislative and policy affairs for the Higher Education Coordinating Committee, said during a committee meeting Thursday.
The committee’s director, Ben Cannon, said the anemic state revenue outlook coupled with the end of federal funding for the pandemic means there is limited room for significant spending increases in the 2023-25 legislative budget. The governor and legislature generally agree on key funding priorities for this session, including housing, behavioral health, and early literacy. Higher education did not make that list.
“It’s not that anyone turns their back on higher education,” Cannon said. The priorities were clear and probably leave little room for additional significant new investment. But we’ll see.”
Colleges are tightening their belts
For most sessions, said John Wyckoff, deputy director of the Oregon Community College Association, the budget picture ends up somewhere between the governor’s budget and the co-chairs’ legislative budget framework.
Colleges and universities say this does not bode well for them. While both budgets recommend spending more money on higher education than in the 2021-23 biennium, the proposed funding falls short of what legislative financial experts say colleges will need to continue operating as they are now.
State spending on higher education per student has lagged behind the national average by at least two decades. The costs of tuition and attendance at Oregon Community Colleges and Universities have skyrocketed, and families bear the majority of that burden. Families covered about 39% of tuition costs in 2002, according to a Higher Education Coordinating Committee presentation to lawmakers, and in 2022 that figure was as high as 53%.
The Legislature has appropriated about $718 million for community colleges and $920 million for public universities for the 2021-2023 academic year. To continue to provide the same services they do now in the next two years, taking inflation costs and the increase in staff costs into account, community colleges will need to increase funding by 8.6% and public universities an additional 5.6%.
Kotek suggested giving community colleges about 2% less than their current level of service and public universities about 4% less. Other state agencies and spending districts are also advised to make small cuts under their plan.
The legislative budget framework also recommends that current service levels be reduced by 2.5%, both in higher education and in some other areas of the state budget.
“If we don’t get at least the current level of service, we won’t be able to maintain our current programs and services. There will definitely be tuition increases,” said Keough of the Oregon State Student Union. “If we don’t get at least (the current level of service), We’re in some trouble.”
Tim Cook, president of Clackamas Community College, said the proposed 2.5% reduction of co-chairs in the budget would require cutting an additional $500,000 from his college’s budget.
Cook said the Clackamas board was already considering increasing tuition per credit of $4 to make up for the current $800,000 shortfall due to lower enrollment. If the co-chairs’ plan is implemented, he said, the college may need to increase tuition by $6 per credit, plus an additional fee increase.
The board also plans to eliminate student transportation and cut class offerings in areas such as health and physical education, and is considering charging students a small 2% fee on credit card purchases that the college has absorbed. Cook said the credit card fee alone could save the school $100,000, but it imposes another tax on students.
“Little things pile up both ways,” said Maddalena Larkins, president of student government at Clackamas. “Any time you increase costs for all students, many of them will be able to afford it — and many of them are not.”
Cook was optimistic about financing higher education after the joint working group and university study discussions on higher education last year.
The Higher Education Coordination Committee also proposed to increase the universities’ budget by 10%. It recommended a 20% increase in continued funding for community colleges facing inflation, the loss of federal aid to combat pandemics and budget shortfalls caused by sharp declines in enrollment during the pandemic.
“It was like, ‘Okay, they’re really getting it, we need to invest, and that’s going to happen,'” Cook said.
Reality hit in Salem. He said lawmakers have been vocal that the budget picture has been narrow. Kotek then proposed a negligible increase of 6.4% for community colleges and the top budget makers in the legislature called for a smaller increase.
Cook said he’s somewhat frustrated that colleges find themselves in such a familiar place.
“It seems like every two years we try to figure out where we’re going to get more funding and we tend to fall short,” he said.
Opu issued a statement in March saying that the legislative budget framework would result in “significant missed opportunities” for students.
Oregon State Council of Presidents said in a press release that Oregon ranks 45th in the nation in terms of state funding per student for public universities.
Now university leaders should look at lowering the cost of personnel and supplies and try to find new funding sources through grants while trying to keep tuition affordable, said Nagi Naganathan, president of the Oregon Institute of Technology.
A committee do not expect Any public university would increase in-state tuition by more than 5% this year.
“We cannot and should not shift the burden onto the students,” Naganathan said. “So we will be caught between a rock and a hard place.”
Final decisions not yet made
The legislature won’t set final budgets until later in the year, and much of that hinges on final revenue projections due in May. Higher education leaders still have some hope that they can increase profits.
Over the past several weeks, Cannon has been presenting the governor’s recommended budget to the Joint Legislative Committee’s Education Subcommittee on Ways and Means, and he said lawmakers have paid close attention to the recommendations, particularly with regard to financial aid. At least one lawmaker on that committee, Portland Democrat Michael Dembrow, said he would work to find the funds to increase funding for Kotek’s recommended financial aid.
Thomas said the Commission on Higher Learning has initially awarded academic scholarships for 2023 to students eligible for the Oregon Tribal Students Scholarship based on conversations with legislative budget staff. One question still on the table, Cannon said, is whether lawmakers might make new investments in workforce development to meet the needs of specific industries.
Many higher education leaders and advocates argue that Oregon needs to find a more stable funding source for colleges and universities.
Wyckoff said that while colleges can raise tuition to combat costs, they’re getting to a point where that runs counter to the public schools’ mission.
“We are the main access point for many systemically marginalized students, and we wouldn’t be, we can’t be, if we just raise tuition fees beyond what people can afford,” he said.
Keough said it’s time for universities, community colleges, unions and post-secondary advocates to get behind something like a business tax that the legislature adopted in 2019 that raises about $1 billion annually for K-12 education.
However, Keough remains optimistic about the outlook in 2025. One of the recommendations from the Joint Working Group on Higher Education Success, House Bell 2265, will Assemble another task force, this one to study how higher education is financed in the state.
Talks are ongoing. “Things are slowly coming together,” Keough said. “In the meantime, it’s very disappointing that we’re not getting the investments we need in the meantime.”
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Sami Edge covers higher education for The Oregonian. You can access it at [email protected] or (503) 260-3430.