Dear Colleagues:
As we communicated in March, Oregon State University is managing a set of structural financial pressures, including moderating enrollment growth and ongoing cost increases that are outpacing revenue growth. The university remains financially stable and comparatively strong. At the same time, these pressures require disciplined and sustained action. And even though we do not currently anticipate a reduction in state funding in FY 2027, the outlook for the next biennium remains uncertain.
Over the past months, each academic and administrative unit developed planning scenarios for ongoing budget reductions of 3%, 5%, and 7% beginning in FY 2027. Informed by the planning scenarios we received, and several conversations with senior leaders, colleges and administrative units, the Faculty Senate, and others, we will move forward with a university-wide average reduction in expenses of 5.1%. This budget reduction will begin on July 1, as approved by the OSU Board of Trustees at the board’s May meeting.
Holding to our commitment to approach these reductions strategically rather than implementing sweeping across-the-board reductions, individual unit-level budget reduction targets will vary based on a variety of unit-specific factors, including enrollment changes, prior budget adjustments, opportunities for cost savings and ability to absorb budget reductions. These unit-level targets will be communicated to individual leaders this week.
We recognize that discussions about budgets can create concern about stability, resources, and the future of our work. Our goal is to approach this work thoughtfully and transparently so that Oregon State remains well positioned to navigate uncertainty while continuing to invest in the mission and impact that define our university.
OSU employees are central to the university’s mission and all that we achieve in research, education, extension and engagement, and other areas of distinction. We are pleased to share that we are able to sustain OSU’s continued strategic investment in people, including a FY 2027 merit-based salary increase program for professional faculty and academic faculty who are not represented by UAOSU. Eligible employees who fully met expectations in FY 2026 can anticipate an increase of at least 2%. Increases above 2%, up to a maximum of 4.25%, will recognize employees who exceeded expectations and helped OSU achieve transformative results. University Human Resources will provide more detailed information about the merit program in the near future. Salary increases for academic faculty who are represented by UAOSU will be implemented according to the collective bargaining agreement.
We are truly grateful for your dedication to advancing Oregon State’s mission.
Sincerely,
Roy Haggerty
Provost and Executive Vice President
Carla Ho’ā
Vice President for Finance and Administration and Chief Financial Officer