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Friday, January 21, 2011
The OUS legislative proposal is most importantly about sound business practices to provide public university education services in exchange for state tax dollars and student tuition expenditures. The proposal includes performance measures to document educational outcomes to meet the needs of Oregon. Changing the status of OUS from a state agency to a statewide university system would eliminate each problem described below and many others faced by the universities, problems that raise universities costs needlessly, increase their financial and operating uncertainty, and undercut their ability to provide current and future students with the education they need and deserve for their tuition dollars.
Again, the proposed change of status for OUS is not simply about governance but rather about effective management and accountability of public universities. For context, let me highlight how the current agency status of OUS creates operating problems for each of the universities. The proposed OUS framework would remedy these and other problems. As business leaders yourselves, I ask you to consider the benefits of change from the conditions described below.
Each of these state agency practices would end if the OUS legislative proposal is adopted. We need your support to move toward best business practices in higher education in Oregon.
I hope that the examples just cited help you understand my laser like focus on the need to pass the OUS governance proposal during this legislative session. There are other important issues to be addressed going forward within a newly adopted statewide university system. One issue is whether or not individual universities should have local boards. I expect the Board of Higher Education to take up the issue of local boards, their selection, composition, range of responsibilities, and relationship to the OUS Board after this legislative session.
Another major issue is state funding for the universities. Currently, resident tuition and state funding per resident student are less than the full cost of educating resident students. If, as expected, the state cuts funding by 25% next biennium, the students will still be enrolled. Suppose you had a customer for your product who wanted to buy the same number of items next year as this year but he told you he would give you 25% less. Proposals to stabilize state funding for higher education are about preventing a buyer from unilaterally cutting the bill for the same product or service.
The problem of not being able to lock in state funding per resident undergraduate student arises from the fact that one legislature cannot bind future legislatures with respect to spending. President Lariviere has made one proposal to use bonding to make the state commitment permanent. President Wievel has proposed possible use of property taxes to stabilize funding for universities. A more conventional approach would be to have state funding per student constitutionally mandated. Each approach has merit but details need to be worked out for each and some approaches work well for some of the universities and not for others. Each requires voter approval of a constitutional initiative. Again, the issue of stable state funding should be taken up by the Board after a new statewide university system is approved.
Furthermore, strong research universities like Oregon State University are critical to the long-term economic growth and social progress of communities, to attracting and retaining industry, and to entrepreneurship, innovation, and new business development ventures. State funding to OSU is leveraged 6:1 through external grants and contracts, targeted federal funds, industry partnerships, local county support, and private fundraising. Innovation through university R&D directly contributes to the quality of student educational experiences, and prepares students to be competitive in a global economy. This critical aspect of OSU’s mission is an investment in innovation, business creation and growth, expanding job opportunities for Oregonians, and sustaining communities. The state needs to be a significant partner in this investment effort, and right now, it is not.