Tweak to funding formula increases estimated state money for some Oregon universities
A fix to technical issues in the formula used to allocate money to 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 lower its proposed tuition increase because of an estimated $1.2 million in additional funding next fiscal year. OIT is the biggest beneficiary of the formula change, but each of 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 last 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 the Student Success and Completion Model to do that. The formula takes into account factors like graduation outcomes and types of degrees awarded at the individual universities to divvy up the money.
The HECC updated the funding allocation formula last year. Those changes included 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.
According to the HECC, as part of those updates, the cost weights were increased for allied healthcare programs “to recognize the additional cost of those programs.” But, Cannon said Thursday that healthcare programs were still being 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 shifted for the universities — for some more than others.
OIT’s additional $1.2 million is the biggest bump in additional estimated state funding, and it led OIT’s Board of Trustees to vote Friday morning on lowering 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 on in April. The smaller tuition increase means OIT won’t 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 receive will depend on factors like how many students complete degrees per year.
While OIT may see an increase in projected funding from the state, that’s 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 ahead with potentially about $100,000 more in the upcoming fiscal year.
Portland State University could see about $1 million less than it planned for next fiscal year because of the formula adjustment.
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 one factor in increasing PSU’s funding level to roughly $20 million more than it got during the last two-year funding period.
The remaining public universities could see anywhere from about $35,000 to $130,000 less in funding next fiscal year, according to the HECC’s estimates.
The University of Oregon is in a situation similar to PSU: it’s expected 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 in a statement it “continues to receive a far lower level of funding per resident student than the other institutions in the state.”
UO said it “would have preferred that more significant changes were 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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