Higher education institutions in our region and across the nation are facing a harsh financial reality as student enrollment lags and state support diminishes under the shock waves of the coronavirus pandemic.
SOU President Linda Schott made the announcement over video conference on Friday morning. According to Schott, the campus needs to reduce its budget by over $10 million in the coming fiscal year.
“Today, May 1, we are implementing actions that will enable SOU to reduce its expenses while keeping our employees relatively whole,” Schott said.
Staff now face 20 percent across-the-board salary reductions. The cuts will affect all classified and unclassified staff, however faculty members on campus will not be affected. About 50 staff members, whose work did not translate to remote delivery, will receive a 40 percent reduction in pay.
Employees will be furloughed for a time period equivalent to their reduction in pay, however staff benefits will not be affected.
On Friday SOU applied for two aid programs, Oregon’s Work Share program and the federal CARES Act, which are expected to backfill the 20-40 percent pay reductions, if approved.
UNEQUAL IMPACT
The financial impact of the pandemic is not being felt equally across institutions. Administrators at Oregon Institute of Technology in Klamath Falls are anticipating a $4.5 million reduction in state funding next fiscal year. However, with strong spring enrollment OIT has not made decisions about staff furloughs.
“We’re certainly worried about what the impacts of state funding levels could be on the institution,” said Brian Fox, the vice president of finance and administration with OIT. “That to us is really the focus, how do we manage through reductions in state funding while we maintain capacity to serve the students that are coming in to the institution.”
OIT, which has an enrollment of about 5,300, is expecting to receive $1.8 million in funding from the federal CARES Act, which will be split between students and the school, Fox said.
Administrators at Humboldt State University in Arcata, California are bracing for a $20 million shortfall over two years. HSU, which enrolls about 1,000 more students per year than SOU, is forecasting a 20 percent decline in fall enrollment, and up to 30% fewer freshmen next year.
“All areas of campus and each Division will feel financial impacts,” wrote Douglas Dawes, vice president for administration and finance in an email to the campus community.
HSU leaders released a strategy on Friday for reducing spending and increasing revenue. The university was already facing a $5.4 million gap before the effects of the pandemic set in.
CONFLUENCE OF FACTORS
The cuts at Southern Oregon University allowed the school to avoid up to 101 layoffs, according to President Schott.
“The actions I’m announcing this morning are our first step to addressing the financial challenges that will face us in the coming year,” she said.
SOU was already facing a $3 million deficit before the coronavirus pandemic struck, during which the university was on a campaign to increase revenue and get more money from the state.
As a result of the pandemic, spring term enrollment was down 7 percent from last year. Declines in state lottery sales will result in a loss of $300,000 this fiscal year and up to $1.2 million next year. The state is also expected to cut SOU’s biennial budget by $3.1 million next year. Schott added that fall enrollment is also an unknown, given the state’s current restrictions on gatherings to prevent the spread of COVID-19.
Schott said the university has a workgroup focused on a fall reopening strategy, pending Gov. Kate Brown’s plans for a phased reopening of businesses. And, she said, they are continuing to advocate for state and federal relief funds.
“This pandemic is certainly not the first challenge for SOU and I suspect it won’t be our last,” Schott said. “This campus has proven it’s resiliency since its founding almost 150 years ago. We will get through this.”
