AOF Update 9/30/2013

During the 2013 regular legislative session (February – June), there were three key pieces of legislation which attracted most of our attention.  The first was simply the funding measures for the Oregon University System.  Happily, the OUS was funded better in this biennium than it was in the previous one.  The 2013-15 general fund budget was increased by 10% over the 2011-13 biennium budget.  Good as that sounds, it follows a 16% decrease in 2011-13 from the 2009-11 biennium.  Oregon’s massive disinvestment in public higher education over the last two decades is still the biggest story for the OUS, despite the welcome uptick in this biennium.  The capital budget for the OUS also saw very significant increases from the previous biennium.

Probably the hottest issue for AOF was the passage of a bill allowing for individual institutional governing boards.  AOF did not take an official position for or against this concept, though it clearly signals the dissolution of the Oregon University System as we know it, and raises numerous questions about how the individual institutions will operate and even survive in the future.  What we did advocate for was a continuation of Oregon’s rich history of shared governance by the faculty.  At the lowest ebb in the legislative session, there would have been NO faculty representation mandated on individual institutional boards.  AOF and others managed to steer this to a final bill which guaranteed that there would be a faculty member, a student, and a staff member on each individual board.  The voting status of these positions was left to the Governor to decide when making his or her nominations.  Happily, Governor Kitzhaber did recommend that all of these positions would have a vote.

The final big issue confronting AOF were the attacks on PERS.  Our positions is that PERS employees have contractual rights to their benefits, and that is illegal to change those benefits retrospectively because they are contractual.  It was a difficult environment, however, to say the least.  The Governor led with an aggressive plan to cut benefits to create dollars for this biennial budget, and his proposals were mid-way between what the more cautions Democrats were willing to try and the robbery the Republicans insisted on.  What did emerge from the session was a plan to cut COLA’s for retirees (already capped in statute to a maximum of 2% per year!).  The PERS Coalition is challenging this law in court.

All of the previous information was the status at the end of June.  Two new developments are on the political radar right now, in September.  The Legislature has been called into special session by Governor Kitzhaber to pass a “grand bargain”.  The primary goal is to create more general fund money by reducing PERS liability through cutting PERS benefits even more.  When first presented, the Governor combined additional COLA cuts with the by fiat elimination of “money match” for PERS retirees who had broken PERS-eligible employment more than 3 years before retirement.  This would have hit OUS faculty particularly hard, as many had in good faith left PERS to join an Optional Retirement Plan (ORP; e.g. TIAA-CREF).  Fortunately, the outlines of the “grand bargain” now do not include this latter part.

The other new development is that the OUS Finance and Administration Committee announced in August, without OUS Board consideration and approval, a policy change on accounting practices surrounding “uncollectible debt” for OUS institutions.  This has created tremendous hardship for EOU and SOU, in particular, and also has some negative impact to the other OUS institutions.  To date, the answers supplied by OUS Vice-Chancellor Jay Kenton for the need for the speed and severity of these changes have been unsatisfactory.  We intend to pursue this, at least to the OUS Board level, as a decision of this magnitude should at the very least be debated and decided by the full OUS Board.

Moving forward, AOF is already gearing for the February session.  More PERS attacks are expected, and operational details of the individual institutional boards and especially their interaction with the new Higher Education Coordinating Commission will likely be in play.  And of course, the specific governance futures for the regional institutions (EOU, SOU, OT, and WOU) will also be finalizing in the next few months.

We are truly blessed (doomed?) to live in interesting times!

--Kemble Yates

AOF Secretary-Treasurer, and SOU Representative