OSU officials cautious because of economy, other factors

Gov. Ted Kulongoski’s proposed budget for the 2009-11 biennium was released Monday, and despite the state’s bleak economic outlook, the budget contains surprisingly good news for Oregon State University.

Although it indicated cuts to other agencies, the budget included

$917 million for the Oregon University System, an increase of 5 percent over the current biennium. Overall, the governor’s budget seeks to dedicate 54 percent of the state’s general fund for education, from pre-kindergarten through post-secondary.

“It is a big number — and it has a big purpose: To keep Oregon on track toward a powerful, diverse, high-wage economy when the recession breaks and a national recovery begins,” said Kulongoski, in a statement.

The modest increase for the Oregon University System will enable it to at least hold steady on its advances in enrollment and student retention, said Chancellor George Pernsteiner.

“There clearly are some wonderful elements in the budget,” said Jock Mills, OSU director of government relations. He mentioned investments in capital construction needs, deferred maintenance and innovative programs at OSU, including the Climate Change Institute, wave energy and nanotechnology.

But Mills said that it was hard to comment overall on the budget, because he was combing through shifts from the general fund to other sources.

“There still is a great deal of uncertainty as far as legislative acceptance and the turmoil in the economy,” Mills added. Increased taxes to support the proposed budget, such as an increase in the cigarette tax, haven’t been approved, and existing revenue streams may continue to fall sharply.

State Sen. Frank Morse, a Republican who represents most of Benton County in the Legislature, said he wasn’t sure how the governor’s budget would fare in these economic times.

“I understand that the governor is going to balance the budget with fee and taxes, and in this economy — as it relates to general funds — it may be a difficult thing to accomplish,” Morse said Monday night. He was more encouraging regarding the governor’s job-creation plan.

“Finding ways to improve our transportation infrastructure -. I think that has pretty good legs,” Morse said. “But if he is weighting the budget so heavily to education -. and significantly reducing human services funding -. Well, we went though that previously, and those are hard decisions.”

Last month, the state issued an economic forecast with a projected $142 million deficit for 2007-09, which meant state agencies, including the Oregon University System, were looking at trimming budgets by 1.2 percent.

For OSU, that means an estimated $4.2 million in cuts by July 1, said university President Ed Ray, in a previous interview.

“We need to get through the March and May economic forecasts before we’ll have any sense of whether we’ll be able to weather through the current biennium, much less the budget for the one released today,” Mills said.

The Oregon Opportunity Grant program, which helps residents attend college, also would see an increase of 54 percent, to $163 million, under the governor’s proposed budget.

Kyle Odegard covers Oregon State University. He can be contacted at kyle.odegard@lee.net or 758-9523.