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Home arrow News arrow Local News arrow Eastern faces budget crunch

Eastern faces budget crunch

University on course to lose $1.2 million this school year and next unless changes made

by DICK MASON / The Observer 

Eastern Oregon University is facing a serious budget crunch, one for which corrective measures, including furlough days for some employees, are now being planned. 

Eastern is on course to spend $1.2 million more than it will receive in revenue in 2012-13. EOU is projected to lose a similar amount in 2013-14 unless steps are taken to reverse its budget course. 

“The path we are on is not a sustainable one,” EOU President Bob Davies said.

The good news is that Eastern is far from being financially insolvent. However, it will be insolvent in several years if the current budget trend continues.

“We will be out of money in two to three years if we do not do something,” Davies said. “We have to slow the burn (of the reserve fund).” 

Davies and his administrative staff are now examining ways revenue can be boosted and expenses cut to balance Eastern’s budget. Faculty and staff cuts are a possibility but will be done only if all other options have been exhausted.

“The last thing we want to do is lay off people,” Davies said.

Still, the possibility of staff reductions is real because personnel costs make up 88 percent of Eastern’s budget.

“I am not guaranteeing there will be staff cuts, and I am not guaranteeing there will not be staff reductions,” Davies said.

Initial action to address Eastern’s budget situation was taken about three weeks ago when a hiring freeze was instituted for the remainder of 2012-13. Plans are now being made to have all administrators and members of their staffs who are not part of a union take furlough days in 2013-14. The number of furlough days will be no greater than 10 and could be less. 

Cost-saving options Davies and his staff are considering but have not decided on include combining classes with 10 or fewer students into ones with 20 or less. Reducing the number of small classes would save Eastern money since it would require fewer part-time (adjunct) faculty. 

Davies said he would be careful not to take steps that would boost class sizes too much. 

“One of the things we pride ourselves on are smaller classes and a personal connection,” Davies said. “This makes EOU special. We need to be mindful of that.” 

Changes in Eastern’s fee remission program for some students are also being considered. Eastern presently provides discounted tuition to students based on need and merit. Davies said he wants to make sure that fee remissions are being provided to students who are likely to be successful at Eastern rather than students who tend to drop out or transfer. 

“We have to ask hard questions,” he said. “Is this helping us attract and retain students?”

Davies hopes that the sustainability plan that is developed will boost Eastern’s reserve fund to a level that will allow the university to easily weather future financial downturns.

“Our goal is to develop a strategic plan, which will allow us to be successful for years to come,” Davies said. 

The EOU president is accepting input from all sectors of Eastern, while formulating a financial sustainability plan. A draft plan will be released in mid May and a final one will be decided upon the first part of June. Davies said the process of putting it together will be an arduous one because it will involve many difficult decisions.

“I don’t like it at all, but we have to deal with reality,” Davies said. “(Mulling over budget decisions) keeps me up at night, literally.”

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