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Oregon universities split from state system

Public institutions moving toward autonomy
University Business, January 2014
Oregon State is one of three universities to be governed by an independent board.
Oregon State is one of three universities to be governed by an independent board.

In a climate of declining state funding, Oregon higher ed policy leaders needed to bring in more resources while taking some of the burden off students. That’s why three of the state’s universities are breaking off from the Oregon University System. Effective July 1, Oregon State University, Portland State University and the University of Oregon will have their own boards.

The boards will have the same powers and authorities as the State Board of Higher Education, which will still govern the four smaller campuses in the system (Eastern Oregon University, Oregon Institute of Technology, Southern Oregon University and Western Oregon University), says Diane Saunders, director of communications for the Oregon U System.

“There is an expectation that these boards will be able to drive more philanthropy to the campuses [and] provide board members who are closer to the campus and able to move more quickly on decision making and in providing support.” They’ll also be able to issue revenue bonds for operations or construction.

Oregon State President Edward J. Ray says, “As the economy continues to recover, we will need to be able to make capital decisions quickly and provide students with early notice of the cost of attendance in a more timely way.”

The schools that split, he adds, will be able to manage property, sell revenue bonds for capital projects, advance their own budget proposal to the Higher Education Coordinating Commission (a newly created state agency), and manage tuition and fees without having to wait for approval of a state authority.

Higher ed autonomy is also under consideration in other states. For example, in 2011 Wisconsin Gov. Scott Walker proposed the flagship campus split from the University of Wisconsin System. It would have given UW-Madison flexibility to deal with budget cuts. But it left the rest of the system with fewer resources and was ultimately turned down.

Daniel J. Hurley, director of state relations and policy analysis for the American Association of State Colleges and Universities, says many state schools dabbled in the idea of autonomy during the Great Recession. But he doesn’t see it being a top issue in 2014.

“There was a lot of consternation on how to improve productivity and make sure that the fiscal management of institutions was at optimum performance given all the stress economically. Now that things have settled down, there are other pressing matters that will drive state higher education issues,” he says.

But Oregon hopes to be an example of how autonomy can reduce costs and improve services. “I expect prudent stewards of higher education around the country to keep an eye on us in the coming years and then determine if they could benefit from the changes we are implementing,” says Ray. “I hope we get this right and other states can benefit. ... I am very excited about, and proud of, the effort we are making to change the education continuum in Oregon.”