State Contributions

Like many public universities across the nation, the UO experienced a steady disinvestment from the state legislature starting in the 1990s and reaching a crescendo in 2007-09 as a result of the recession. As Oregon’s economy recovered from the recession, the legislature has begun to reverse its trend of disinvestment. Nevertheless, funding for higher education in Oregon is still not back to pre-recession levels, and the investments have not kept pace with state-mandated cost drivers.

State Appropriations

Collective Bargaining Agreements

The university cannot unilaterally eliminate salary increases for faculty and staff. These labor costs, largely driven by collective bargaining agreements, account for about 77% of expenditures, yet the staffing levels at the UO still remain behind peer institutions.

There are five labor unions on campus representing faculty and staff, each with a separately negotiated labor contract that stipulates the annual salary increases that the university is legally obligated to honor for each group.

These increases are important, both to help us attract and retain talented faculty and staff and to keep pace with cost of living and market increases.

It is important to note that in recent years the salary increases negotiated in the labor contracts have gotten smaller in recognition of the challenging budget situation. For example, this year the faculty labor agreement included a 2% annual pay increase.

Competitive Faculty and Administrative Salaries

In order to attract talented faculty and administrators to the university, the institution must be competitive in a national marketplace. This includes offering fair benefits and competitive salaries, which require incremental annual increases.

Benchmark studies against the other public Association of American Universities (AAU) institutions show that, on average, the University of Oregon pays between 87% and 95% of the average of our peers for our employee groups.

Surveys of staffing levels at other Association of American Universities (AAU) public institutions indicate that as of FY2021, UO has only 65.3% of the average student-faculty ratio among peer universities and 74.6% of staff per student.

Cutting pay, either for administrators or faculty, would significantly impact our ability to recruit and retain faculty and staff. Additionally, some faculty and staff are part of collective bargaining units that would preclude such an action.

AAU Faculty Comparison   AAU Staff Comparison

Public Employees Retirement System (PERS)

The Public Employees Retirement System (PERS) is a state-mandated benefit for state employees, including UO faculty and staff. The program is managed at the state level and the rates are set by the PERS Board.

The program does not currently have enough assets to pay for all of the retirement obligations promised to existing and former employees. As a result, rates continue to go up and the university is legally bound to pay those rate increases.

Unfortunately, the PERS issue is a long-term problem. Given the current underfunded status of the state plan, we have been told to expect significant PERS rate increases for the next six years. After that, PERS rates are likely to remain at these higher levels for decades to come.

We are working hard to lobby for more state funding to cover these state-mandated programs. This is part of the broader legislative process.

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Public Employees’ Benefits Board (PEBB)

The Public Employees’ Benefits Board (PEBB) sets medical insurance costs.

We are working hard to lobby for more state funding to cover these state-mandated programs. This is part of the broader legislative process.

ANTICIPATED INCREASES FOR FISCAL YEAR 2024

Projections are subject to change. Figures will be updated as data becomes available.

NOT A MAJOR COST DRIVER: New Buildings

The construction of new buildings does not significantly affect tuition.

The majority of the funds that are used to construct new buildings on campus are coming from donor gifts, state-paid bond, or non-tuition revenue. For example, the vast majority of the costs of the construction of Hayward Field is paid for with donor gifts. The new Knight Campus is entirely funded with donor gifts and state-paid bonds.

Other examples of recent construction that are funded primarily through gifts and state-paid bonds include the new science library, Tykeson Hall, and the renovation of Chapman Hall for the Honors College.

NOT A COST DRIVER: Coaches Salaries

The athletics department does not receive funding from tuition. They cover all of their operating costs with revenue generated from areas like ticket revenue, PAC-12 conference distributions, and gifts.

The university charges the athletics department, as well as other auxiliary operations (e.g. housing, the health center, etc.), an administrative overhead fee to account for the fact that they use university resources and services such as the financial system, general counsel’s office, human resources, etc.

In FY23, the athletics department paid $4.05 million in administrative overhead to the university.

The athletics department also pays to the university the full amount of any and all scholarships it awards to student-athletes which equated to over $18.7 million this past year. These funds support student athletes and the institution's institution’s academic operations.

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