1. Tuition and Mandatory Fees
Fiscal Year Budget Development

2. Overview
Pressures
Process
Proposal

3. Pressures

4. The State’s failure to fund

5. Historical Look at State Funding vs. Tuition
Historically, total funding from State Aid and Tuition has increased at a fairly consistent average of 4% per year since 2006
Each corresponding decline in State Aid has been met by corresponding tuition increases
What are the factors driving consideration of such a large tuition rate increase? As we see in this slide, with each reduction in State funding, Tuition has to make up the loss. For FY , we are projecting a decline in state funding, even though the current Governor’s Recommended Budget is essentially a flat budget from the current biennium to the next biennium. The difference is in how the allocation model used by the Higher Education Coordinating Commission or the HECC actually allocated those funds to each university. They use the Student Success and Completion Model, or SSCM. In general, the SSCM favors the larger universities, at the expense of the smaller Technical and Regional Universities.

6. State model favors the larger institutions
This slide is not simple. I apologize for that but it illustrates how the SSCM allocates funds to each of the 7 public universities.
To the far right, the Public University Support Fund or PUSF is the fund that when the legislature funds public universities, money is appropriated into.
The HECC then allocates those funds out to the 7 public universities, through the Student Success and Completion Model or SSCM.
The bars for the PUSF represent the rate of increase in total funds the PUSF will receive, compared to this year, in several scenarios of total funding from the legislature.
Since we won’t know how much the legislature will fund the PUSF until June at best, we have shown several possible scenarios.
The other sets of bars represent the 7 public universities, who also have a corresponding bar for each funding scenario.
The height of their bar represents the expected percent increase that University will receive relative to the current year.
If that school’s bar is higher than the corresponding bar for the PUSF, that school is ADVANTAGED through the SSCM.
If that school’s bar is lower than the corresponding bar for the PUSF, that school is DISADVANTAGED through the SSCM.
Note, for SOU, we are not only disadvantaged in all funding scenarios, we are disadvantaged the most in all scenarios.
That is due to a combination of reasons – our low Resident enrollment population, our even lower resident degrees awarded, though that is the result of very low resident enrollment 4-5 years ago, that also occurred at all Oregon public universities, but earlier in the recovery of the Oregon economy, so their degrees awarded numbers are much better than ours.
Finally, the challenge is also that the sheer scale between the Regional universities, and the other Larger universities is just such that SOU could almost double our degrees and not have a significant impact in the funding model.
$680M
$660M

7. Increasing labor costs
SOU total labor = 109%
of historical inflation trend
The second major factor driving the need for a large tuition rate increase is that our labor is rising significantly next year.
Why is that? There are a couple of factors at play here.
One is that for Education, which is a service, primarily delivered by highly skilled people, not well suited to savings through productivity improvement such as maybe manufacturing or technology sectors of the economy,
Because of that, our labor costs will always rise at rates above the overall inflation rate, which is after all, an average, and to have an average, some sectors of the economy must be above that average, and some will be below that average.
Education, Health Services, Performing Arts will be above, Manufacturing, and Technology will often be below that average.
However, does that really explain a 9% average increase above the rate of inflation?

8. PES is more than 2/3 of labor cost increases
Salary = 103%
of historical
inflation trend
OPE = 122%
of historical
inflation trend
As you can see in this slide, it isn’t salary so much that is driving our total labor to being the 9% above inflation, but the rising costs of OPE.
That accounts for more than 6% of the total 9% increase on the previous slide.
OPE is rising so significantly in the next year because of PERS – retirement. The State is under funded due to loses during the recession, and needs to significantly increase the rate we are charged for current employees to make that up.
For SOU, it is 7-8% increase in total labor, but we are not unique. All State agencies are facing this same increase, which is why all 7 Oregon Public universities are looking at close to or above double digit tuition rate increases.

9. Processes

10. Process: Initial rates formed by Establishing Body
Proposed rates presented around Campus
ASSOU Senate
Faculty Senate
University Planning Board
Budget Committee
President’s Cabinet
Proposed Rates + Feedback presented to SOU President
President forms proposal, presents to Governing Board
After you understand the pressures on the tuition rate, you need to understand the process by which SOU establishes the rates.

11. Establishing Bodies: Tuition  Tuition Advisory Council Fees Housing
Student Incidental Fee  Student Fee Committee
Rec Center Fee  Rec Center Steering Committee
Student Health Fee  Director, SHWC
Building Fee  Legislature
Housing
Housing Fees  Director, Housing
Meal Rates  Director, Housing
For tuition and each mandatory fee – here are the establishing bodies.
The Tuition Advisory Council has 3 administrators, 2 Faculty, and 4 students who make up that council.

12. Proposals

13. Tuition Rates 2016-17 Tuition Rates: Resident Undergraduate
EOU
SOU
PSU
WOU
OIT
OSU UO
$146
$151.46
$156
$155.33
$167.63
$193.68
$198
Proposed Tuition Rates: Resident Undergraduate
EOU
SOU
PSU
WOU
OIT
OSU
OSU CC UO
$154.76
$169.58
$170.04
$170.86
$182.72
$201.42
$204.40
$218.99
The President has not decided on what tuition rate she will propose, but the Tuition Advisory Council recommended up to a 12% tuition rate, which is what the $170 represents for Academic Year

14. Tuition rate is calculated at 15 SCH, for Resident Undergraduate students

15. How SOU compares UO SOU OSU CC OIT WOU PSU OSU EOU
Annual dollar increase based on 45 Student Credit Hours (SCH) per year for an undergraduate student

16. Student Incidental Fee
Incidental Fee - comparison
PSU
EOU UO
SOU
OIT
WOU
OSU
$221
$255
$300.75
$320
$325
$341
$362.81
Incidental Fee - Historical
Year
10-11
11-12
12-13
13-14
14-15
15-16
16-17
17-18
Rate
$304
$307
$263
$301
$320
$343
The students have recommended a 7% rate increase for the Incidental Fee, primarily because they are facing the same pressures in their labor increases as the University is.
PERS rates for Labor
2.5% increase for S&S
Minimum wage for Student Labor

17. Rec Center Fee Referendum allows rate = $95 in year Center opens Year
15-16
16-17
17-18
Rate
$35
$75
$95*
Because the Rec Center will open next year, and per the student approved referendum establishing the Rec Center, the fee can raise as much as $95 in the year it opens. The Rec Center steering committee has not yet met, so it is still not determined if they will raise it this much yet.
Referendum allows rate = $95 in year Center opens
* Rec Center Steering Committee meets Tuesday, Apr 11 to set the Student Rec Center Fee

18. Student Health Fee 2016-17 Health Fee - comparison
PSU
SOU
WOU
OSU
EOU
OIT UO
$129
$130
$131
$142.50
$150
$173.75
Health Fee - Historical
Year
12-13
13-14
14-15
15-16
16-17
17-18
Rate
$116
$119
$123
$130
$137
The Student Health and Wellness Center Director has recommended a 5% rate increase for the Health Fee, primarily because they are facing the same pressures in their labor increases as the University is.
PERS rates for Labor

19. Housing

20. Through significant effort, Housing is recommending very modest rate increases, primarily because Ashland is already a very high cost place to live, so they are doing all they can to keep increases low next year, despite having the same labor increases as the rest of the University is experiencing.

21. Impact Resident Undergraduate SCH/ Year FY17 Rate Annual Fy18 Rate
% Inc.
$ Inc.
Annual $
Annual Inc. $
Tuition 45
151.41
6,813.45
169.58
12.0%
18.17
7,631.10
817.65
Building
45.00
135.00
0.0% -
Health
130.00
390.00
137.00
5.4%
7.00
411.00
21.00
Report to HECC
7,338.45
11.4%
25.17
8,177.10
838.65
Incidental Fee
320.00
960.00
343.00
7.2%
23.00
1,029.00
69.00
Rec Center Fee
75.00
225.00
95.00
26.7%
20.00
285.00
60.00
Housing: Shasta Double
2,655.00
7,965.00
2,708.00
2.0%
53.00
8,124.00
159.00
Dining: Red Plan
1,825.00
5,475.00
1,880.00
3.0%
55.00
5,640.00
165.00
Total Cost to Attend
21,963.45
5.9%
23,255.10
1,291.65
Western Undergraduate Exch.
SCH/
Year
FY17 Rate
Annual
FY18 Rate
% Inc.
$ Inc.
Annual $
Annual Inc. $
Tuition 45
227.12
10,220.40
254.37
12.0%
27.25
11,446.65
1,226.25
Building
45.00
135.00
0.0% -
Health
130.00
390.00
137.00
5.4%
7.00
411.00
21.00
10,745.40
11.6%
34.25
11,992.65
1,247.25
Incidental Fee
320.00
960.00
343.00
5.0%
23.00
1,029.00
69.00
Rec Center Fee
75.00
225.00
95.00
27.0%
20.00
285.00
60.00
Housing: Shasta Double
2,655.00
7,965.00
2,708.00
2.0%
53.00
8,124.00
159.00
Dining: Red Plan
1,825.00
5,475.00
1,880.00
3.0%
55.00
5,640.00
165.00
Total Cost to Attend
25,370.40
6.7%
27,070.65
1,700.25

22. Feedback?
Final note – No, SOU is not projecting large cuts to address this challenge.
Remember, SOU has undergone two retrenchments in the past 10 years, and an additional reduction in Administrative and Classified positions in as well.
There are few places to cut that wouldn’t have even greater negative impact on either enrollment, recruitment, student progression, or faculty/staff retention.
We believe that to take these cuts would create greater damage to SOU and greater lost revenue than would be saved.