A look at restructuring the Oregon university system

By Scott Scholes

Oregon Higher Education officials are pushing the state legislature to allow the Oregon University System  to be less bound to government controls.

Because of ongoing record-level enrollment throughout Oregon’s public universities, tuition surpluses are at risk of being spent in other areas of the state budget, said George Pernsteiner, chancellor of the Oregon University System.

Pernsteiner explained that the current state control doesn’t make sense for universities in the state.

“The university system is subject to the controls of thousands, thousands, of budget line items imposed by state government even though only a minority of the funds received by the universities come from the state,” Pernsteiner told the Oregonian last week.

Pernsteiner and Oregon State University President Ed Ray are supporting a plan to let Oregon’s public universities have more flexibility in raising and spending their own tuition.

Currently, tuition is deposited into state accounts, and interest accrued goes toward the state general fund. With the proposed changes, the universities would keep that interest instead.

In the past, higher education officials have been unsuccesful in reducing state control of the Oregon University System. But this time things are different, as both the state board of higher education and the University of Oregon have proposed plans to the legislature.

U of O President Richard Lariviere’s plan would take away the state board and legislature’s power to set tuition levels, instead granting the responsibility to a U of O governing board.

The U of O would also establish a $1.6 billion endowment, to be funded half by state-backed bonds, and half by donations. This would replace their current $62 million allocation from the state’s general fund.

Despite their differences, both the U of O and the state board’s plans resemble the creation of a charter system, in which public universities would have more power to manage their own budgets while still maintaining a certain degree of governance in the state’s system. Both plans arose from a consensus that raising tuition and cutting programs would only further deteriorate the universities’ already shakey circumstances.

Since 1990, the state’s share of spending for the Oregon University System has dropped from covering 70 percent of the cost to a mere 20 percent. Accordingly, tuition then covered 30 percent of each student’s expenses; it now covers  70 percent.

The plans supported by the state board and the U of O are represented in Senate Bills 242 and 559, respectively. They will be reviewed by the legislature when they reconvene Tuesday.


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