Board retains campus in Bend.

Byline: GREG BOLT The Register-Guard

Bowing to political and economic realities, the state's higher education board abandoned the idea Tuesday of withdrawing support for a branch university campus in Bend, but officials will hold back part of its budget as a hedge against unexpected state cuts.

Board members elected to continue with the branch campus after learning that delaying or scrapping the initiative would save only $1.8 million from the higher education system's two-year budget of $808 million. The Legislature appropriated $7.2 million for the branch campus project, but most of the money already is committed.

The board, discussing the issue by e-mail, decided on a compromise suggested by board member Tom Imeson. He proposed withholding the $1.8 million in uncommitted funds and using it in one of three ways: offsetting overall budget cuts, reducing the cuts to specific programs or supporting the Bend campus.

Cutting funding to the Central Oregon campus faced a questionable future in the Legislature, where some prominent lawmakers are strong backers of the initiative. One of them is Rep. Ben Westlund, R-Tumalo, co-chairman of the budget-writing Joint Ways and Means Committee.

In an interview before the board vote Tuesday, Westlund said a budget plan that did not include the Bend campus "would reflect very badly on the board." He said the board's decision a year ago to extend higher education programs to Central Oregon was made in good faith after years of work by local residents and shouldn't be reversed.

"I have faith in the higher ed board, and I don't think that faith is misplaced," he said.

Legislators are expected to meet in a special session early next year to deal with a state revenue shortfall brought on by the declining economy.

Like all other state agencies, the Oregon University System is being asked to suggest budget cuts in 2 percent increments up to 10 percent, which adds up to between $16 million and $80 million. Prior to the special session, Gov. John Kitzhaber plans to huddle with legislative leaders to work out a new spending plan in line with a revenue shortfall that could require $600 million in cuts statewide.

The next revenue forecast comes out Nov. 30, and discussions over how much to cut individual agency budgets are expected to begin in December. Higher education officials don't know how much they'll actually have to cut, but estimates are in the neighborhood of 5 percent, or $40 million.

The new OUS plan calls for cuts to the state's effort to double the number of engineering graduates and establish a top-tier engineering school at Oregon State University. It also cuts in other areas, including non-resident tuition support, a fund for colleges that exceed enrollment goals, campus-based community service programs and statewide public service programs, such as the extension service and forestry and agricultural experiment stations run by OSU.

The first budget plan developed by OUS Chancellor Joe Cox called for deeper cuts to the extension service as part of a plan to shield resident undergraduate education from the worst of the cuts. The revised plan softened those cuts by slicing more deeply into the new engineering initiatives.

But after discussing the revised plan Monday, a majority of board members felt they shouldn't add another campus to the system at the same time they're cutting budgets at the rest of the state's universities. They asked for a third plan that included savings from delaying or abandoning the Bend campus, a branch of OSU that opened this fall with 450 full- and part-time students.

OSU officials objected to each of the plans, which all hit Oregon State harder than other schools. But Cox pointed out that OSU received the largest increase in its budget after the 2001 legislative session, so it follows that it will take the largest cuts.

But cutting the Bend branch - known as the OSU-Cascades Campus - sparked the most concern. Central Oregon is the only area in the state without a university within a 100-mile radius.

"Our real strong feeling is we are counting on the state Board of Higher Education to reaffirm its previous decision to extend access to higher education to Central Oregon," said Bend resident Barbara Schenck, who led a committee that developed the branch proposal. "I'm very, very aware it's a difficult time. I'm also aware that just because times are difficult we can't quit looking for solutions to state needs."

Cutting the Bend branch would save relatively little money because the state has committed to a 30-year lease on a new building under construction on the Central Oregon Community College campus.

OUS also has signed contracts with faculty members who have, or who are in the process of, relocating to Bend. That means the university system is committed to spending $5.4 million of the state appropriation.