Dear Colleagues:
As we communicated in January, Oregon State University has undertaken a strategic realignment of our financial resources to bend the curve on projected expenses, build greater financial resiliency to weather uncertainty, and better position OSU for success in achieving the goals of Prosperity Widely Shared.
Over the last several months, each academic and administrative unit developed planning scenarios for ongoing budget reductions of 3%, 5%, and 7% beginning in fiscal year 2026. Even though enrollment continues to be strong, our growth in expenses is outpacing our growth in revenues, and we are rebalancing our costs to meet our expected revenues. We are simultaneously building our financial resilience and looking ahead to opportunities for focused investment.
Across the university, units looked deeply into areas for strategic investment as well as opportunities to reduce, consolidate or discontinue expenses that could lead to long-term savings. We met with over 30 academic and administrative leaders to review these scenarios, to discuss the impact of potential reductions, identify areas for potential investments, and to share their questions and concerns. We are deeply grateful to all who engaged in this process and contributed their insights and opportunities.
Informed by these discussions, university and unit leaders have recommended a university-wide target of a 5.2% reduction in expenses. This budget reduction will begin to go into effect July 1, pending approval 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 in the coming weeks.
The result of this shared effort will strengthen the university’s ability to advance our mission and support employees and students in the face of likely challenges in the years ahead, including uncertainty of federal funding, increased personnel costs, an increasingly competitive enrollment landscape, and other contingencies.
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 fiscal year 2026 merit-based salary increase program for professional faculty and academic faculty who are not represented by UAOSU. Eligible employees who fully met expectations in fiscal year 2025 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. Vice Provost for Human Resources and Chief Human Resources Officer Heather Horn will provide more detailed information about the merit program in the near future. For academic faculty who are represented by UAOSU, the parties have reached tentative agreement and are working through the ratification process. Once the contract is finalized and ratified, the university will implement the terms of that contract.
By acting collaboratively, proactively and in accordance with our principles, we are well positioned for the challenges and opportunities ahead. For more information about budget realignment, including FAQs, please visit our website.
We are grateful for the creativity and dedication that continue to shine through your hard work and service to OSU students, to each other and to the greater community. We are truly stronger together and offer our deepest thanks for all you do for OSU.
Sincerely,
Belinda Batten
Interim Provost and Executive Vice President
Carla Ho’ā
Vice President for Finance and Administration and Chief Financial Officer