To: OSU faculty and staff

From: Edward Feser, Provost and Executive Vice President
           Mike Green, Vice President for Finance and Administration

August 17, 2020

Dear Colleagues,

We are writing to inform you that on Sept. 1 the university will implement a temporary salary reduction program for professional and academic faculty. This action is consistent with our communication of July 28, 2020 and is one among several intended to mitigate projected budget impacts stemming from the COVID-19 pandemic.

At present, the university estimates the FY21 Corvallis Education and General (E&G) Budget will see a shortfall of approximately $55 million. Overall, we estimate the university will incur $217 million in losses this fiscal year for all university funds.

The university has already implemented numerous measures to address these losses, including reduced spending on facility improvements, services and supplies; reduced personnel costs through delayed hiring, salary reductions for 43 university administrators and head coaches (implemented on July 1), and workshare layoffs and leaves-without-pay in lieu of layoff; and the strategic use of reserve funds.

In an Aug. 10 special session, the Oregon Legislature preserved the Public University Support Fund for Oregon's seven public universities for the current fiscal year. This was welcome news. However, we now expect other OSU revenues, particularly those dependent on enrollment, to be lower than the university’s May forecast. Depending on fall term enrollment and state and federal support, OSU auxiliary units that include housing and dining services, transportation services, printing and mailing services, and athletics may fall short of revenues by as much as $100 million. OSU-Cascades is also planning for financial losses that are significant relative to the size of its budget.

As detailed here, the salary reduction program is progressive in design and based on revenue forecasts for Corvallis E&G funding. In total, it is anticipated to save about $14.6 million in salary and OPE expenses through the remainder of the fiscal year. Coupling these savings with those from the other actions noted above, and barring further erosion in revenues, the university will close the $55 million E&G gap. Addressing shortfalls in other funds will require similar strategies and potentially the use of debt financing. The Board of Trustees received an update on university’s current budget plan on Aug. 14.

We will review our budget forecasts in November and again in mid-February. If they have improved, we will reduce or eliminate the salary reductions. If our financial situation worsens, we may need to increase reductions for the balance of the fiscal year.

We greatly regret having to take this action. Indeed, we have avoided implementing faculty salary reductions for as long as possible to ensure we understood fully emerging enrollment and budget trends. However, it is now clear we are headed into a very challenging fiscal year during which we will need a broad-based approach to managing the shortfall if we are to preserve the university’s core strengths and be positioned to thrive after the pandemic. We will continue to provide you regular updates in the months ahead.

Thank you for understanding and for your continued dedication to the university’s mission, the OSU community and those we serve.


Edward Feser
Provost and Executive Vice President

Mike Green
Vice President for Finance and Administration