Tweak funding formula increases estimated state money for some Oregon universities, decreases for others

Oregon’s seven public universities will cause a shift in state funding – with some universities estimated to receive roughly $ 1 million more or less than they planned for.

One University, Oregon Institute of Technology, will increase its proposed tuition because of an estimated $ 1.2 million in additional funding next fiscal year. OIT is the biggest beneficiary of the formula change, but Oregon’s seven public universities will see at least a modest shift in its estimated funding level.

The changes result from a tweak to the public university funding formula managed by the state’s Higher Education Coordinating Commission, or HECC.

“Over the past few weeks in consultation with Oregon Tech and other universities, HECC staff uncovered an issue with the formula that allocates state funding to the public universities,” HECC Executive Director Ben Cannon said during the commission’s meeting Thursday.

The HECC is the state agency in charge of allocating state funding, approved by the governor and state legislature, to the public universities every two years. It uses a formula called Student Success and Completion Model to do that. The formula takes into account factors like graduation results and types of degrees awarded at individual universities to divvy up the money.

The HECC updated the funding allocation formula last year. Those changes include updating “cost weights,” a part of the formula that acknowledges that certain programs cost more to operate than others – such as more hands-on courses offered at universities like OIT.

Oregon Institute of Technology in Wilsonville, as seen April 27, 2021.

Kristyna Wentz-Graff / OPB

According to the HECC, as part of those updates, the cost weights were increased for allied healthcare programs “to be recognized for the additional cost of those programs.” But, Cannon said Thursday that healthcare programs were still underweighted in the formula.

In correcting the formula’s cost weights, as well as fixing a “data misalignment issue” in a spreadsheet, the estimated funding for the upcoming fiscal year has shifted for the universities – for some more than others.

The OIT’s additional $ 1.2 million is the biggest bump in additional estimated state funding, and it led to OIT’s Board of Trustees voting Friday morning to lower the tuition increase it had originally approved last month.

The board approved a revised 5% base tuition and fee increase for the upcoming school year, down from a 7% increase it decided in April. The smaller tuition increase means OIT will not have to seek approval from the HECC, which is a required step for increases over 5%.

“At this point, Oregon Tech feels comfortable saying we can now expect at least $ 1.2 million in funding to be restored to our fiscal year 2023 budget,” Oregon Tech President Nagi Naganathan said in a statement. “This restored funding will directly benefit our students, who are our top priority.”

The HECC stressed that the estimated additional funding is just that, an estimate. The agency’s formula is based on projections, and the actual amount of funding universities will receive depends on factors such as how many students complete degrees per year.

While OIT may see an increase in projected funding from the state, that is not the same deal for other universities. Without additional funding, the HECC had to adjust the distribution of funds across the universities – leaving some universities with less.

Like Oregon Tech, Southern Oregon University is coming out with about $ 100,000 more in the coming fiscal year.

Portland State University could see less than $ 1 million planned for the next fiscal year because of the formula adjustment.

Portland State University sign, file photo.

Portland State University sign, file photo.

Hanin Najjar / OPB

According to PSU’s Director of Strategic Communications, Christina Williams, the university’s budget office was not surprised by the change to the formula.

Williams said even with the correction, last year’s formula update was a factor in PSU’s funding level rising roughly $ 20 million more than it did during the last two-year funding period.

The remaining public universities could see anywhere from $ 35,000 to $ 130,000 less in funding next fiscal year, according to the HECC’s estimates.

The University of Oregon has a situation similar to PSU: It expects to lose money – about $ 100,000 – through this latest formula tweak, but overall, it received a bump in funding after the HECC’s update to the formula last year. Still, UO officials were hoping for more.

The university told OPB a statement it “continues to receive far lower levels of funding per resident student than other institutions in the state.”

UO said it “would have preferred that more significant changes be made to the model” when the HECC made the initial updates.

A HECC official said the agency plans to discuss the funding formula more directly with the public universities, including through a workgroup of employees from each university.

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