Measure 97 Could Impact Higher Ed

Nov 3, 2016

Patrick McLellan
Credit Jacob Lewin

In recent years, the University of Oregon and Oregon State University together have increased enrollment by more than 10-thousand undergraduates. The number of in-state students has been relatively flat. The new dependence on out-of-state students raises a lot of questions.  Meanwhile the corporate tax measure 97, on the ballot next week, may also have an impact on that trend.

To find out how Oregon's state universities get their funding, ask a typical student at U of O:

"My name is Patrick McClellan.  I'm from Mountainview, California. I'm an econ major here and I pay about 33-thousand-dollars a year."

The 33-thousand that McLellan pays is more than three times in-state tuition. Nearly half of UO students are from out-of-state. The freshman class last year was over half. Doing the math, that means about 70% of tuition comes from outside Oregon. Even with a three-point-six grade point average, McLellan could not get into the competitive mid-tier public universities in his home state and so he was prime recruiting material for Oregon:

"The UO did send quite a few recruitment packages. I would say it was a concerted recruiting effort."

"They can't run a university today off in-state students alone," says Ben Cannon,  Executive Director of the Oregon Higher Education Coordinating Commission. "They require the subsidy of out-of-state students who pay significantly more."

Because the state is spending far less tax money on higher education that it used to, we've become addicted to out-of-state students. So roll the recruitment videos:

Singers sing, "Call me a Duck, call me a Duck....."

Oregon is now 45th in per student spending through taxes and spends twice as much on prisons as on universities.  It's not just the University of Oregon. The number of out-of-state students at OSU is up by three quarters since 2010. It's been increasing steadily at Portland State, and Western is sending recruiters to Asia. In a sense, there's nothing wrong with getting non-residents to subsidize Oregonians, unless they are preventing qualified Oregon students from getting in.  Ben Cannon says that's not happening...yet:

"I haven't seen evidence of Oregon students being squeezed out. Looking forward, it would be challenging for the universities to maintain their commitment to access for Oregon resident students."

Officials at the University of Oregon believe they are not squeezing out qualified Oregonians. One says the university exists to provide a world-class education to any qualified Oregonian who wants one.  State Senator Michael Dembrow, former chair of the House Higher Education Committee, disagrees:

"I do think it's happening now. When you have half of the students be from out-of-state, clearly there are in-state students that are being kept out and that is a problem."

That brings us to Measure 97, which would mean a big increase in corporate taxes. While 97 is aimed at K-through-12 education and human services, there is broad agreement that it would free up money for higher ed if it passes.  If it fails, the state is looking at cutting a billion dollar deficit and that would mean cuts:

"I'm afraid that higher ed will be first in line for cuts. My hope is that we don't have to go there."

And that could increase dependence on out-of-state students.  At OSU, they're well aware of the situation. Vice President Steve Clark says there's a new board policy: at least two-thirds of undergraduates will be from Oregon:

"This was really what you might call a gut check for the board to say what will this university be in the future.  And so for them it was a very intentional moment that they defined the mission of Oregon State as Oregon's statewide university."

The rapid growth of at OSU, mostly from out-of-state students, has brought push-back from the community.  The university, which only has five thousand beds, is hemmed in by the city.  Community activist Charlyn Ellis says that's meant a big increase in parties, noise, parking problems, loss of greenspace, and more:

"It's had a huge impact on historic and older neighborhoods.  Over 70 single family houses have been torn down and replaced by student behemoths. Huge impact on our affordable housing, if you are trying to work and live in Corvallis, it is very, very difficult."

OSU has gotten the message.  Steve Clark says future growth will be limited:

"In Corvallis,  which has been our predominant university campus, we have set a goal to not have more than 28-thousand students by 2025 and over time to increase our online distance learning programs to seven to ten thousand students.  Education is changing. It will be different and it will not all be place-bound."

Going forward, if the universities add in-state students they will simultaneously have to add non-residents. Yet our biggest supplier, California, is now refocusing on trying to keep its resident students.  Ben Cannon says the out-of-state market for Oregon's higher education products may dry up:

"They are high priced, or at least not low priced, relative to their competitors."

Bottom line: students expecting to go to one of Oregon's flagship universities may instead go to one of our under-enrolled regional universities or get a degree online.  Passage or defeat of Measure 97 could determine how fast that transition takes place.