The key question at Friday’s tuition board meeting: Which costs will be increasing next year?
The University of Oregon’s major cost-drivers for the next fiscal year include salaries, a state-mandated health care program, retirement costs and institutional bills, adding up to a $19 million increase in university expenses. On top of that, the university’s budget — more specifically, its E&G, or education and general expenses, fund — is imbalanced, unlike in previous years.
In other words, UO does not have enough revenue to cover its E&G costs.
“When I say there aren't any major surprises, I mean [that] a lot of these numbers are going to seem like they're in a similar range to what we have seen in the past. There are some swings,” Chief Financial Officer Jamie Moffitt said of the cost-drivers for the 2021 fiscal year.
Each year, the 20 or so members of the Tuition and Fees Advisory Board discuss options for tuition and fees for the coming year, considering factors such as enrollment projections, state funding and future costs. At the end of the process, the board proposes a plan for tuition and fees to University of Oregon President Michael Schill, who then makes a final recommendation to the UO board of trustees. The board of trustees then makes a decision on tuition in the spring.
Here are the budget numbers on the table, as Moffitt said, “just to keep things running.”
Most of that figure comes from the increase to salaries, at about $11.6 million. But this number is so large because most of the university’s budget (about 79%) is invested in people, Moffitt said, something that includes the salaries and wages of faculty, staff and graduate employees.
The university will also see an additional $2.5 million in medical costs from PEBB, or the Public Employees' Benefit Board. PEBB is the state group that gives benefits to eligible state employees, according to its webpage on the Oregon Health Authority website. Out of the other cost-drivers, medical costs will increase by the largest percentage, at 4.7%. (Salaries are increasing by 2.6%, for example, when compared to last fiscal year’s costs.)
Retirement costs will also be increasing by about $500,000. A new law regarding PERS, or the Public Employees Retirement System, the Oregon retirement fund for state employees, means that the state will charge retirement rates for UO’s retired employees who are still working here, Moffitt said.
Senate Bill 1049 adds a new extra cost since UO hadn’t been getting charged PERS rates for those retired employees.
“PERS is a huge cost-driver for us,” Moffitt said.
Now, UO’s retirement payments will see an additional $1 million hit next year. But the good news, Moffitt says, is that the costs on UO’s “side account” to help pay PERS costs will decrease as the rates of UO’s pension bonds has decreased.
There are also some savings from the tradeoff from employees retiring and new hires, who are getting lower retirement rates than those who had retired, so there will be some savings from this.
Among the other numbers floating around: The board estimates that university's institutional expenses, such as utilities, will increase around $1.5 million. Next year’s increase falls within the range of increases seen in the university’s institutional expenses for the last several years.
Another $2 million will go into what Moffitt described as “strategic investments” for the university, one example of which is cybersecurity.
And many student workers will see a bump in their paychecks as Oregon’s new minimum wage laws kick in for the region. Most of those affected by this new law at UO are student workers who will soon earn a minimum of $12.75 per hour, adding up to a cost of $1.9 million for the university.
Starting in January, Moffitt explained, departments and programs begin making proposals for fees to the board. But UO won’t have a sense of its enrollment numbers until May, so the board will need to make recommendations based on older data.
Though the exact TFAB meeting dates for winter term have not been finalized, the board tentatively discussed the following agendas, with their meeting dates, times and locations to be decided:
Week 1 (Jan. 6 - 10): Members will discuss undergraduate and graduate tuition proposals, course fees and the student forum where TFAB members will present on tuition.
Week 2 (Jan. 13 - 17): Members will discuss the student forum on tuition, fee proposals for the EMU and Rec Center and continue to discuss undergraduate tuition.
Week 3 (Jan. 20 - 24): Members will discuss fee proposals for housing and counseling, along with continuing to discuss undergraduate and graduate tuition.
Week 4 (Jan 27 - 31): Members will talk about any other proposals the board received and will discuss undergraduate tuition.
Week 5 (Feb. 3 - 7): The board will finalize its recommendations for President Schill.
The Daily Emerald will continue to report on the tuition-setting process throughout the year. Questions about tuition? Contact Senior Reporter Ryan Nguyen at [email protected] or Associate News Editor Zack Demars at [email protected].