Academic Budget Expectations

February 28, 2017

The University of Oregon faces significant financial challenges, including large operational cost increases, flat state appropriations, financial imbalances in several schools and colleges, market limitations on nonresident tuition, and an unwavering need to enhance our faculty and our excellence. This is the context in which I write to ask for your assistance.

The university has approximately $25 million of operational budget (E&G) cost increases in fiscal year 2018 that come primarily in the form of salary and wage increases, medical cost increases, a very large increase in retirement costs, and investments in tenure line faculty hiring. We are actively asking for the state to provide additional support to address those costs, and President Schill has committed to trying to protect academic units from the impact of these operational cost increases, but that will certainly be challenging.

In addition, later this week, the UO Board of Trustees will consider an undergraduate tuition increase of $945 per student and a new technology fee of $150 per student per year. For resident undergraduates, the tuition increase is 10.6 percent. Through these tuition and fee increases, we are asking our students to shoulder more than half of our funding gap. Given current projections, we still need to find administrative cuts of nearly $9 million. This will come on top of the 2 percent administrative cuts from last year that saved approximately $3 million.

While the university’s administrative units are reducing expenses and students are shouldering a significant tuition increase, it’s incumbent on all of us within the academic divisions to get our house in order and use resources as wisely as possible. Several of the schools and colleges currently have recurring expenses that are higher than their recurring resources. This imbalance can only be handled through reserves for a limited amount of time. I am asking each of you to review your programs for mission alignment, academic excellence and fiscal responsibility and to bring to me no later than fiscal year 2020 a budget plan for your unit that will ensure that recurring revenues and expenses are balanced in your unit. In many cases this rebalancing should occur much more quickly. I recognize that for some of the schools and colleges this will mean reducing labor costs, reexamining workloads, reducing some course offerings, and even cancelling programs or putting programs on hiatus. It is imperative, however, that every part of the university help the effort to achieve financial stability. I also want to acknowledge the hard work that many of you have already taken on as part of this rebalancing.

At the same time, the university will continue the process of gaining operational efficiency though centralization of communications and information services units. As you make plans for a balanced budget, decisions affecting these functions within your units should be coordinated with the vice president for university communications and the incoming chief information officer, respectively. The primary goal of both efforts is to provide consistent, efficient, and coordinated communications and IT services to all units in support of strategic academic and research priorities.

I realize that this memorandum will require some of you to consider difficult decisions within your units, but they are steps that we must take now to position each of our schools and colleges for long-term success and financial stability. I am convinced that once these decisions are implemented, the university will be stronger for it. We will continue to work closely with you on these important initiatives.