Eugene, Ore. — The University of Oregon’s early budget projections show a $3.4 million deficit to make up this year as part of the fallout from COVID-19 and declined enrollment. It’s a loss much smaller than expected, which was helped by some one-time cost savings this fiscal year — but long-term, the university will still see impact on the budget for years to come.
Jamie Moffitt, UO’s chief finance officer and vice president for finance and administration, shared a breakdown of the UO’s current financial situation with the Board of Trustees during the first of two virtual meeting days last Thursday.
The university’s budget concerns are driven by lower enrollment this fall, especially of first-year students. Enrollment is down 3.6% this fall, which is the largest drop UO has seen over the last decade. The next-largest drop was in 2017 with a 2.76% drop. First-year undergraduate student enrollment fell by 12.1% this year, after the UO had a record-breaking year of high first-year enrollment last fall.
Tuition and fees make up about 42% of the UO’s total revenue each year, according to annual budget expenditure reports.
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Spring cuts lessen blow
These enrollment drops will lead to an expected loss of $17.5 million in undergraduate tuition from what they were expecting before COVID-19 happened, Moffitt said, and that first-year student decline will continue to impact the UO’s finances for the next four or five years.
However, graduate enrollment tuition is expected to make up some of that gap, increasing by $5.8 million from last year. UO also took some cost-cutting measures in the spring, such as pay cuts for administrators and some other employees, which offset this.
“(The deficit) is not as large as it would otherwise be and that’s because of these one-time savings,” Moffitt said. “But once COVID disappears, I’m fully expecting a lot of those savings will also disappear and so we’re going to have some ongoing budget challenges that we’ll need to address.”
In contrast to previous years, this year’s personnel services line item is actually decreasing. Usually it increases due to changes such as contracts and compensation for employees, PERS and health benefits. UO will save money this year due to a hiring freeze, its work share program, on top-of-the-pay-scale cuts made in the spring.
Travel and study abroad programs were suspended, which saved the UO some money as well. Normally, the UO spends about $7.5 million a year on travel, Moffitt said, and the UO has to pay millions in revenue to its study abroad partners.
“The place we are expecting very large savings is in services and supplies, and again that’s a short-term issue,” Moffitt said. “As soon as COVID disappears, I expect that the impact of that will disappear as well.”
New tuition model
UO administrators shared how the tuition and fee advisory board, which includes students, faculty and staff representatives, will be moving forward this year under the new guaranteed tuition model.
The advisory board gets together each year to discuss the UO’s financial situation and recommend a course of action around tuition and fee increases. This year will be different than years past, as the advisory board will only make a recommendation for the incoming cohort of students’ tuition. All existing students have their tuition set already.
The cohort of students who started at UO this year saw increased tuition and fees over the previous year, but have the current costs locked in for them for the next five years. Returning students will see incremental increases of 3% each year, compared to the larger initial jump this latest cohort saw, since they would not have reaped the same benefits of the five-year lock as new students.
“… Really what (the advisory board) is going to be focused on is: What is the rate that we set for the next year’s cohort of students that will then be locked for them for five years?” Moffitt said. “It is a more narrowed scope given our guaranteed tuition program.”
The advisory board will hold several public meetings over winter term before giving its recommendation to President Michael Schill in March.
Status of handling COVID-19
Board members also heard updates on how the UO has been handling COVID-19 operations from UO’s Chief Resilience Officer and Associate Vice President Andre Le Duc.
UO did more than 16,000 COVID-19 tests of asymptomatic residence hall students, Le Duc said, with positivity at .25% Each week the UO has looked at the residence hall testing data, it never went above 1%, which is better than some other universities, which rose above 3% at times.
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“Our isolation space was never stressed,” Le Duc said, referring to the space in Barnhart where students who tested positive were relocated to. “We did peak in the beginning of the term where we had about 26% in our isolation and quarantine space. Right now we’re hovering at 4% for isolation, 7% for quarantine.”
The UO still is having challenges with off-campus students, he said, with 85% of the UO’s overall cases having come from off-campus students. However, the number of UO-related cases has decreased significantly since the initial spike this fall. UO has increased its testing capacity in recent months, now extending tests to employees and members of the community.
Looking to winter term, Le Duc said the UO will adjust its plan based upon “lessons learned” this fall, and in continued contact with state and local public health officials.
“We’re also using our networks nationally with other universities to look at what’s working for them, where can we adapt and approve our plans,” he said.
In the second day of the board meeting, the trustees unanimously voted to create a Bachelor of Fine Arts in Dance program, and went through a comprehensive report on diversity, equity and inclusivity on campus. This report looked at items such as demographic breakdowns of tenure faculty, the inclusiveness of different areas on campus, and a roadmap with high-level recommendations for how the UO should improve toward becoming more inclusive and equitable.
The full report, along with all board materials, can be found online at trustees.uoregon.edu/past-meetings .
