Oregon University System

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Higher ed capital and operating budgets pass, reductions reflect state’s revenue woes

Capital budget will create 2,400 jobs in both rural and urban Oregon

Contact: Di Saunders, Office: 503-725-5714; Cell: 971-219-6869


PORTLAND, June 30, 2011 – Today the 2011-2013 capital budget for the Oregon University System completed its passage through the Senate and House, with a total of $259.8 million in authority for new construction, capital repair, deferred maintenance and seismic upgrades. There was no General Fund in the capital budget. Although a decrease of 66% from the $758.4 million provided in the 2009-2011 biennium, the capital projects within the budget will help provide much needed space and improvements to handle significant enrollment increases seen over the past several years. The bonding will also enable the campuses to make progress on necessary renewal of aging facilities, complete energy saving projects that lower costs, and make seismic upgrades that improve safety, while also putting a dent in deferred maintenance, which now exceeds $600 million across OUS. 

The capital budget, made up primarily of lottery bonds and gift and grant funds, provides good news for campus communities and the construction and related trades. These projects will provide an estimated 2,400 jobs directly related to new construction and repair across Oregon at all seven OUS campuses, located in both rural and urban areas in the state. While a number of projects up for consideration by the Legislature were deferred for consideration until next February during the Legislative Session, several others were reauthorized for continued funding that were previously approved in 2009-2011. 

Jay Kenton, OUS vice chancellor for finance and administration, said, “We knew going into this Session that General Fund dollars and bonding were tight so we’re disappointed but not surprised by the operating and capital budgets. There are significant implications for campuses, though, especially with enrollment continuing to climb. All of the universities will be making some combination of staffing, faculty, and a variety of operating cuts to make up for the significant losses in state funding not only for 2011-2013, but also for losses incurred in previous biennia that multiply the impact of this budget.” 

The 2011-2013 OUS operating budget of $692.1 million, passed earlier this month, represents a 16% decrease from 2009-2011 ($823.6 million); and the General Fund portion of the budget, $669.2 million, is lower than what the OUS received 10 years ago ($746.1 million), not adjusted for inflation. The operating budget is less than the Governor’s recommendations in his budget for OUS, but does not include the potential of another $25.4 million that was held back from the OUS budget. All state agencies had 3.5% of their budgets held back to create a reserve fund, and may see some or all of this returned to budgets in the February 2012 Legislative Session. “In order to keep tuition rates in the single digits, and to ensure that students have the classes they need to graduate on time, it’s very important that OUS get the hold-back funds next year so that we don’t lose the momentum we’ve gained in access, affordability, student support, and degrees produced,” said Kenton. 

Paul Kelly, president of the State Board of Higher Education, said, “Our thanks go out to Governor Kitzhaber for providing a budget target for operations and capital construction that was reachable given the conditions of Oregon’s revenues and continuing predictions for a slow economy. We appreciate the Legislature’s efforts to support higher education and hope that next year provides an opportunity for advancing additional funds to OUS from the hold-back amounts.” Kelly noted that campuses will certainly struggle through the next few years to meet these fiscal constraints and said that, “These are painful choices and not without consequences for the state’s support of students trying to earn a degree.” 

Tuition increases approved by the Board earlier this month remain in the single-digits, unlike Oregon’s neighbors to the north and south, with the larger campuses seeing average increases of 8% and the smaller average increases of 6%. These levels of tuition are not enough to make up for losses in state appropriations, and thus the need for campuses to make significant cuts.


Capital construction bonding authority approved includes projects for new construction, capital repair, deferred maintenance, and seismic upgrades. Bob Simonton, OUS assistant vice chancellor for capital programs, construction and planning, said, “Besides improving access and safety for students with new and renovated facilities, each of the communities in which our campuses reside will benefit from the jobs created through this capital budget. This funding will help us meet record enrollment demand by addressing space and repair needs on all seven OUS campuses.” 

A summary of the new projects funded through lottery bonds, XI-Q/COP bonds and XI-F bonds, plus gift/grant funding in the capital budget include:


  • EOU: Quinn Hall Deferred Maint. ($13.18M)
  • OIT: Wilsonville Campus Consolidation ($30M); Geothermal Demonstration Project ($3.5M)
  • OSU: New Business Education Building ($56M); Cross Country Track ($4M); Education Hall Deferred Maintenance ($6M); Animal Sciences Teaching Pavilion Equipment ($2M); Bookstore Relocation ($12M); Housing Infrastructure Upgrades ($8M)
  • OSU-Cascades Campus: Mill Point Building ($5M)
  • PSU: Blumel Residence Hall Water Replacement ($7M); City Tower Purchase Placeholder
  • SOU: Science Building/Deferred Maint/Seismic Upgrades ($21M)
  • UO: Additional Limitation for Allen Hall ($5.3M) and ISC/Lewis Science Building ($10M); Steam Line Replacement ($2.5M); Residence Hall Improvements ($3.95M)
  • WOU: Natural Science Building/Lab Annex renovation ($9.7M); Todd Hall Seismic ($1.2M)
  •  OUS System-wide: Capital Renewal/Code compliance/Safety ($35M); Misc. Student Building Fee Projects ($20M); Project Reserves ($4.5M)

The Oregon University System comprises seven distinguished public universities and one branch campus, reaching more than one million people each year through on-campus classes, statewide public services and lifelong learning. The Oregon State Board of Higher Education, the statutory governing board of OUS, is composed of twelve members appointed by the Governor and confirmed by the Oregon State Senate. For additional information, go to www.ous.edu