Welcome to the Oregon Budget Model
As of July 1, 2010, the University of Oregon has adopted the basic principles of Responsibility Centered Management. This is the public information page for the associated Oregon Budget Model. If you don't find what you need here, please contact Brad Shelton, Vice Provost for Budget and Planning. Your questions will help make this page more informative.
OBM Recent News Blog
I have just posted several documents related to the Oregon Budget Model: FY12 Academic Budgets, detailed FY12 Academic Revenue Projections and an updated Academic Expenditure Report including FY08 through FY11. FY11 expenditures form the tax base for FY13. Please see the Budget Reports link to the right.
Several important changes have occured for fiscal year 2012. The Tax Rate for the OBM is now 35%, an increase from the 30.5% tax rate used in fiscal year 2011. There was an additional change to the various academic General Fund Supplements totalling $7,000,000. These two changes were necessitated by a substantial decrease in state appropriation. Even with these substantial changes to the parameters of the OBM, overall academic budgets increased from FY11 to FY12 by 8.46%.
Report on Graduate Funding Issues
The Graduate Funding Taskforce, created to take a first look at graduate funding issues as related to the OBM, has completed its work and filed a final report with the provost. Included in the report of the task force are the following changes to policies and structures within the OBM.
Summer Session: Under the OBM, summer term graduate tuition revenues should be distributed to the Schools and Colleges strictly by student credit hour, as opposed to the current method of distribution, distribution strictly by major. This change will go into affect with summer session 2011. This policy trumps the two subsequent policy changes.
Joint Degree programs and formal graduate double-majors: Beginning fall term 2011, the tuition for graduate students who are formally enrolled in concurrent graduate degree programs or joint degree programs will be the average of the tuition in the two separate programs. Graduate tuition revenue associated with such students will be allocated to the two programs at 50% of their normal tuition rate. These policies go into affect fall term 2011. At this time the joint MBA/JD program is the only excpetion to these policies.
Graduate Certificate Programs: Under the OBM, any graduate revenue associated with a student who is formally enrolled in a certificate program will be split, with 70% of the tuition going to the school or college of the student's major and 30% going to the school or college of the certificate program. This policy goes into affect fall term 2011. This policy is slated for review in four years.
I would like to thank the members of the taskforce for their time, considerable effort and collegiality. Any questions about these policy changes should be addressed to the Vice Provost.
The Governor's Recommended Budget
Governor Kitzhaber released his recommended state budget last week. Attached to this post is a nice summary of the portions of the budget relative to higher education, provided by OUS. This budget, not surprisingly, is a mixed bag of good news and bad news. We can expect a system-wide cut in operational budgets of 11.6%. We don't know what that will translate into for UO specifically, but we can estimate the cut at between 7 and 10 million dollars. A 10 million dollar cut equates to approximately 3% of our operating budget. On the other hand, the Governor's budget includes important increases in debt service and commitment of lottery dollars. Perhaps the best news is that the bad news is not nearly as bad as it could have been (I'm trying to be upbeat today).
Final Budget Model startup values set.
We have posted four substantive changes to the startup values of the Oregon Budget Model. The budgetary consequences of the changes can be seen in revised documents on the Public Reports page. All of this is essentially just housekeeping. In brief, the four changes are:
1. Taxation of Designated Ops: In order to avoid double-taxation of designated operations, we will henceforth be rebating the overhead on designated operations paid by academic units, at the time that OBM taxes are calculated.
2. GTF medical benefits: This was explained in a blog post of 9/15/10.
3. Other GTF expenses: In addition to academic year GTF medical expenditures, there are substantial GTF employment expenses associated with summer session that were previously covered centrally. Under the OBM these expenses must be covered by the hiring unit and must be captured in the hold-harmless calculation that seeds the OBM.
4. Honors College Differential Tuition: We fixed a small mistake in the methodology of calculating differential tuition revenues in the Honors College.
Graduate Funding Issues
Lots of people have concerns about the interaction of the new Oregon Budget Model with graduate education. While it is true that there are many serious financial issues associated to graduate education (beyond the simple fact that graduate education is extraordinarily expensive), all of those problem pre-date the OBM. The OBM simply shines a strong light on the issues. With the advent of the OBM we have an opportunity to solve, or make improvements to, those graduate funding issues. Towards that end I have formed a task force of academic and financial leaders to look into the issues. The goal of this group is not to solve every issue, but rather to understand the scope of the issues we face and to create a framework of policies and processes through which the individual issues can be addressed.
As of late Friday afternoon, enrollment numbers look very good. The number of students enrolled on Friday was up about 7.6% over the same date last year, and total Student Credit Hour enrollment was similarly up about 7.1% over the same time last year. Based on the past few years, we expect both the head count and the SCH count to increase substantially over the next couple of weeks.
At today's Department Heads Retreat, Provost James Bean drew attention to a new study from the Goldwater Institute: "Administrative Bloat at American University: The Real Reason for High Costs in Higher Education." I haven't taken a look yet, but I suspect it promises to be interesting reading.
Changes to GTF Medical Benefit Charges – New Rates
Beginning fall term, policies on collections for GTF medical benefits will change substantially. In order to equitably budget for a medical benefit program with multiple benefit levels and in order to assure that increases in medical costs are borne by the appropriate responsibility unit, we have created a blended rate for what we must charge for GTF medical benefits. This rate will affect all units that hire GTF’s. The new blended rate will be $1210 per GTF per quarter during the academic year. A substantial budget adjustment will be made in the schools and colleges to offset the majority of this change as it relates to academic GTFs. A memo to that effect will be going out soon and we will post the associated budget changes on this web site as soon as they are finalized.
Web Site Launch
This is the official launch of the Oregon Budget Model web site. In addition to providing basic background information on RCM and the Budget Model, we intend to use the blog feature to provide news relative to the UO budget. Please help us make this site as useful as possible by posting comments or questions or by emailing me: Brad Shelton.
September Budget Cut
We've known for some time that the State revenue forecast was down by several hundred million dollars. The best information we have to date on the UO share of the September budget cut is $3,531,000, bringing our fiscal year 2011 state appropriation to $58,075,000 (including federal stimulus dollars). This cut is substantially less than we thought it might be, but it comes on top of a substantial cut last May. We would like to assume that this is the final rescission for the fiscal year, but there are no guarantees. Fortunately, we have strong enrollments this year that will help mitigate the impact of the state cut.
The Strategic Initiative process for FY11 is ongoing. Budget cuts in May and September made it difficult to bring the process to closure but we expect to make final announcements in the next few weeks, after the Deans Working Group has a chance to meet.