Budget plan gets high marks.

Byline: Greg Bolt The Register-Guard

PORTLAND - A proposed university system budget with the first big cash infusion in almost a decade won general applause from higher education officials Friday even as they acknowledged that it won't fill all the gaps caused by past cuts.

And they said the budget plan faces almost certain changes when it heads to the Legislature, which convenes next week and is expected to consider the university spending plan in March.

Reviewing the package for the first time since it was announced in December, members of the State Board of Higher Education called the budget plan from Gov. Ted Kulongoski a big step in a new direction. It calls for a 2007-09 general fund appropriation of $827 million, a 12.5 percent increase over the current two-year budget.

That's not as much as the $988 million the Oregon University System said was needed to put the seven-campus system back on solid financial footing and meet future needs, but board members were happy and grateful that Kulongoski acknowledged the need to make a major reinvestment.

"That's a vote of confidence in the work this board has done," said Jay Kenton, the OUS vice chancellor for finance and administration.

The proposed spending plan not only maintains services at their current levels, it also provides funding for a slate of specific needs.

Among them: $14.6 million for enrollment growth, $9 million to help the system's smaller campuses, $8 million for faculty salaries, $6.9 million to reduce class sizes and $56.7 million for building repairs.

Other initiatives include an additional $17 million above current spending for the Engineering and Technology Industry Council to boost the number of engineering and computer science graduates, $7.4 million for the Healthcare Workforce Initiative to train more nurses and other health care workers and $5.5 million above the current spending level for Oregon State University's Extension Service and other statewide forestry and agriculture programs.

On top of that, the governor has proposed $595 million in bonds to finance a campus construction program, including $30 million for an integrated sciences building at the University of Oregon.

Even with the additional funding, however, Kenton said universities still face some difficult choices given the depth of past cuts.

In the past 15 years, per-student funding for universities and community colleges has fallen 41 percent, tuition has increased 113 percent and the OUS has dropped to 46th in the country in spending per university student.

Oregon universities also have one of the country's highest student-faculty ratios at 27-to-1, and students run up more than double the debt they did in 1993.

Last year, the campuses spent $13 million more than they took in, spending down reserves to what system officials consider risky levels.

Even with the governor's budget, Kenton said three schools - Southern Oregon University, Portland State University and OSU - still will need to make cuts or reorganize budgets to get spending in line with income. And he said all of the campuses will have tough choices to make.

Kenton said the 2007-09 budget will need to be followed by similar increases in the future to get universities back on their feet.

"We will be back for more, and we'll need the money to achieve the goals the board has set out for the system," he said. The governor's budget "is not a solution to all of our problems."

As far as getting the budget through the Legislature, the board got a relatively optimistic report from government affairs consultant Neil Bryant. Bryant, a former state senator, said most legislators understand the need to make up for some of the past cuts to higher education.

"My guess is we'll have pretty good success because people understand what's happened to higher ed," he said. "I think we'll be treated fairly by the Legislature."

State Sen. Ben Westlund, D-Tumalo, agreed that many of his colleagues understand that universities took a disproportionate hit during the past recession. With tax revenues on the rise, he said OUS will do better.

"We slammed higher ed bad during the economic hard time," he said. "In this economic climate, we will be able to restore some of the cuts."