Student Forum Speech
October 8 and 15, 2002

How we got here...

I need to go back to 1990.  At that time community colleges were funded by a combination of local property tax (almost 50%, state grant in aid (about 28%) and tuition (20-25%)  This allowed the college to be controlled locally and to respond to the needs of the community.  We went to the community often to ask for support for the college and Lane County always voted to support the college.  In fact in November 1990 the college passed a property tax levy to continue to fund the college.  Unfortunately, in that same election Ballot Measure 5 passed.  This was a property tax limitation that capped property taxes and told the state that it had to pick up the funding for schools and community colleges.

Changed the funding mechanism from local property tax, local control to state funding.  Lane County did not vote for ballot measure 5 but they are impacted by the results.  Less local control over what we want our local education systems to be.  Now about 50% of our funding comes from the state, only about 15% from local property tax, about 25% from tuition. 

As the state took on additional funding of education due to replacing property taxes, did not increase the grant in aid funding.  Now we are competing with human services, prisons, for our share of state dollars. 

This was also a time of huge prison expansion - again due to ballot measures like three strikes and you are out.

As the state's responsibility for funding education grew to full implementation of BM5 in 1996, required that every Oregonian be served by a community college. 
Annexed several areas into community college districts, Klamath, Curry, NE Oregon.  Did not expand the revenue pie to pay for these additional services.  Instead, they funded them from existing allocations. 

In addition, ballot measure 5  redistributed the burden of taxes from large corporations to individuals.  That is a fact. 

Lane continued to grow through the 90's.  Made a policy choice to grow so that we could continue to serve the community.  But did not have the funding to support growth - state funding did not keep up with growth, neither did tuition.  Not knocking that choice because it did serve more students, but it contributed to the situation we were in last year.  The college used reserves to fund this growth.  But you can only do that for so long.  When you use up your savings account and you have done nothing to reduce expenses or increase revenue you have a problem.

Now the problems all of this was going to cause may have come to light much sooner but we just happened to be in a major economic boom in the 90's so the state could deal with the impact of ballot measure 5 without making significant changes. They had clear structural problems with the state budget but they did not have to deal with them because the money kept flowing in.  It was only when the economy went south, in the summer of 2001 that they had to start addressing the problem.

All of this impacted colleges like Lane. 

When I accepted the job as president I knew there were funding problems estimated to be about $3 million.  I thought that would be difficult but manageable.  In the first two weeks on the job, a year ago August, the revenue loss increased to over $7.25 million.  A totally different proposition.

Those of you who were here last year know that we immediately implemented cost saving measures and started a process to balance the budget.
Developed criteria, looked at every single thing we do and a group that included faculty, classified staff and managers made recommendations to the Executive Team.  The Executive Team adopted most of the recommendations and added additional cuts to balance the budget and presented those to the board.  Then we began a series of public hearings to hear from students and the community. 

A clear theme was that neither students, nor the community wanted to see such drastic cuts and they were willing to pay more tuition to decrease the amount of the reductions.  In fact, the ASLCC recommended that we increase tuition $12 per credit. 

Ultimately, we cut about $5 million.  This resulted in lay-offs of classified staff, managers and faculty.  And increased tuition by $11 per credit a dollar of which was to cover removing all fees for consumables under $15.  Cost neutral.

That brings us up to this year. 

As you know, the state continues to announce revenue shortfalls.  Because over 50% of our budget comes from the state any time there is a state shortfall we are likely to be impacted, just as the K-12 schools are impacted.  The legislature has had 5 special sessions to try to balance the budget.  They have done a variety of things: made cuts, borrowed money against our future, used one time money, delayed state payments to schools and community colleges into the next year, and most recently, referred a ballot measure to increase corporate and income tax.  This will be decided on January 28.  If it passes, Lane will have to cut about $1 million from this year's budget.  If it fails we must cut $3.1 million.  Unfortunately, we need to make decisions within the next couple of weeks so that you can know what we will have available Winter term.

I want to stop here for a moment and say a word about your role in determining where the state should go from here.  How many of you are registered to vote?  How may of you know the candidates running for office that truly support education? Funding for public education in this state is at a crossroads.  Do we want to disassemble what used to be one of the best educational systems in the country? Because that is where this is going if there is not a grass roots effort to tell legislators that education is the backbone of the economy and without stable funding education is not going to turn out an educated citizenry.  Education funding must be priority one and it is students like you who can make the difference by informing yourselves on the issues and voting. 

All of this presents us with a number of options, none of which are very attractive.

Belt tightening, cost controls. 

Components of budget balancing strategy

Options - reducing courses - limits choices for students, makes it more difficult to complete programs within two years, can be more expensive for students in the long run because students take classes to make up loads and do not get into core classes to complete programs.

Tuition - access is very important and we know that if tuition goes up too much it will limit access.  It is not fair that some people do not or will not have access to higher education, especially when we know that higher education results in higher salaries.   Yet that appears to be where we are.  Students pay for about 25% of the cost of their education through tuition.  Up until now, taxpayers have been willing to pay the other 75%.  I don't know if that is true anymore.  I guess we will see on January 28. I need to tell you that last week I gave a speech to about 120 small business owners in Eugene.  These were not big corporations but small businesses.  The kinds of businesses that many of you may do your Coop Ed. Experience or go to work for after graduation.  The majority of those business people told me that we should not cut programs but increase tuition - another indication that tax payers may no longer be willing to foot 75% of the bill. 

I understand that the thought of raising tuition is hard for you to take.  It's hard for me to think about too.  But I think where we are now is that we must rebalance the budget for this year.  The state is facing another $1,5 billion shortfall next year so this is not going to turn around any time soon.  I estimate that we have at least a three -year problem.

I think the fundamental question you must ask yourselves and help me answer as I craft recommendations for the board is this:  What makes most sense, reducing courses and services and limiting choices or increasing tuition or a combination of both.  We will continue to become more efficient, cut overhead and administrative costs but that alone will not solve this problem. The size of the problem is too great.

So I am here to listen.  I want to hear your comments and I will answer your questions if I can.  I think it is very important that you have a voice in this.  It will take everyone's best thinking to get us out of this mess.  It will take political action at the state level to tell our story and make our case that we cannot take further cuts.  We will need to get out the vote in January.  We will work on all of that but we will still be faced with very difficult choices at Lane and I need to hear from you so that I can make the very best recommendations to the board.

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