Higher education leaders in Oregon want university system to be free from state legislature
June 1, 2010
State university leaders have reached consensus on the need to end the Oregon University System's status as a state agency subject to what they see as stifling micromanagement from the Legislature.
Their challenge will be to persuade the Legislature next year to cut them loose.
"I don't know of anyone saying business as usual is great," said Ed Ray, president of Oregon State University. "Everyone is saying it has got to change."
Members of the State Board of Higher Education and presidents of the state's seven universities want to see the system gain the independence that community colleges enjoy with control over tuition, personnel, health benefits, purchasing, bonding and other operations.
Such a change, they say, would enable universities to save millions of dollars and give them more options to raise money, possibly even with taxing authority.
Facing declining state support, public universities across the nation are, to various degrees, exploring similar ideas, said Robert Berdahl, president of the Association of American Universities in Washington, D.C.
"Everyone is grappling with this," said Berdahl, a University of Oregon dean during the early 1980s. "These universities are facing either developing a new business model or inevitable decline. There is no other choice. You cannot sustain the quality of the university with a steadily eroding resource base."
In Oregon, the erosion is driving state and university leaders to look for a change. Adjusting for inflation, state funding for the university system dropped 16 percent over the two decades ending in 2009 while enrollment increased by 27 percent. Twenty years ago, Oregon college students shouldered about 30 percent of the cost of their education; now their tuition covers about 70 percent of the cost.
The university system could save money in a variety of ways just by terminating its state agency status, Chancellor George Pernsteiner wrote last week in a paper on possible changes.
The Legislature would no longer be able to keep interest on tuition and raid tuition reserves for other state purposes as it does now. Last year, lawmakers spent $33 million of university tuition on other state services, Pernsteiner said.
The university system also would save money -- $12 million for health insurance alone -- by not having to participate in state benefit and property and liability insurance plans, all of which it can purchase for less on its own, the chancellor said.
Even legislative leaders have acknowledged that change may be in order by creating last week an interim work group to come up with reform proposals for higher education.