Southern Oregon University approved an $89.7 million budget Wednesday as the institution begins implementing its Vitality Plan, a sweeping effort to cut $20 million and ensure the university’s long-term viability.

The budget, approved unanimously by the Board of Trustees, assumes the university will receive $15 million in emergency state funding and projects positive cash flow through fiscal year 2029. But trustees questioned whether the budget adequately accounts for inflation, declining enrollment and ongoing operating deficits.

SOU must reduce spending by $20 million to remain financially viable, and some board members asked whether inflation had been fully factored into the budget.

“The $20 million, did it anticipate inflation both on the labor side and your service side? Did it take that into account? If it didn’t ... we’re already behind the eight-ball,” Board Chair Sheila Clough said.

The finance team said that inflation had been factored in at 3.51%.

Trustee Liz Shelby also expressed concern that each of the university’s three funds is projected to lose revenue over the year.

“We’ve had a pattern of approving budgets that don’t have the revenue to cover costs and relied on one-time funding,” she said. “I’m a little uncomfortable doing the same thing at this point.”

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With an anticipated $15 million in emergency funding from the state, the budget will end up in the black. SOU has received half of that amount so far and expects the rest this fall.

One of the funds, for auxiliaries, is estimated to end the fiscal year with a negative $3 million balance.

Vice President for Finance and Administration Carson Howell said that projection doesn’t reflect expected savings from housing and dining operations. He said the finance team is working to ensure that the fund doesn’t end the year with a negative balance.

“It’s tough to adopt a budget that has a negative balance of ... $3 million without showing where it [comes from] in a transfer situation and somewhere else. I don’t know how we rectify that,” Trustee Brent Barry said. “In my experience, we have to have that zeroed out.”

In addition, Howell told the board that the $20 million goal the institution needs to hit will not be reflected by a budget shift.

“We’re not going to see that $20 million number as we move forward because there are other things that are escalating at the same time that are eating into those savings,” he said. “As we move forward with that plan, you will see those savings manifest, but you’re not going to necessarily see a drop in $20 million because of those other escalations.”

“We are using some of that [$20 million] to help pay for those increases [in labor and other costs],” he explained in an interview Thursday. “It is cutting $20 million. It’s just that you’re not going to see, ‘Oh, we’re spending $20 million less this next year’ because of these escalation factors.”

This year’s budget is larger than last year’s, which was about $84 million.

Howell said the increase reflects auxiliary expenses that were not fully included in last year’s budget.

“We have some expenses that were in auxiliaries that weren’t necessarily reflected in the prior year budget,” he said. “That’s where a big chunk of that increase on the auxiliary budget comes from, is making sure that those things get into the right fiscal year so that we can account for them the way that they should be.”

The budget was also approved later than usual because SOU was finalizing the Vitality Plan. The board previously passed a one-month budget for July before adopting the budget for the rest of the fiscal year.

Clough said this budget was put together in about a month, as opposed to the usual four to five months.

The budget projects a steeper decline in fall enrollment than previously expected, forecasting a 16% drop instead of 10%.

SOU President Rick Bailey said retaining current students has proven difficult amid uncertainty surrounding the university.

“We have been battling all summer on working with current students to continue on the path,” he said. “That has been very, very challenging because of everything that they see in the environment right now.”

With the budget approved, the university has less than a year to make major cuts, or it’s forecast to run out of cash next June.

SOU has assembled a project management team to make sure implementation stays on track.

One key person will be Brad Earl, who is finishing up as assistant superintendent of operations at the Medford School District.

“It’s a huge project. It’s an important project, and I’m already immersing myself in the financials and the plan,” he said. “I’m ready to get going. We’re on the clock.”

The other team lead will be Jennifer Lind, former executive director of Jackson Care Connect.

Business and accounting professor Dennis Slattery said he felt optimistic about the new budget, despite some reservations.

“Even though they passed a budget that has more expenditures than revenues, they’re keenly aware of it, they asked really, really strong questions, and I’m hopeful because the project management team looks to be top notch,” he said in an interview Thursday. “I’m hopeful we’re going to get at the core of what we need to change and adjust and work towards so that we’re sustainable by the time we get to July 1 of next year.”

Bailey told the board that everything is on track so far.

In a Thursday interview, Director of Budget and Planning Josh Lovern highlighted the importance of ensuring the plan is fully implemented.

“To me, the biggest risk element is the culture change that needs to happen because this plan is serious. There is no other Hail Mary pass here,” he said. “This is where we have got to change ourselves, got to change our behavior.”

JPR is licensed to Southern Oregon University, but its newsroom operates independently. Guided by its journalistic standards and ethics, it covers the university like any other organization in the region. No university official reviewed or edited this story before it was published.

Jane Vaughan is a reporter with JPR. This story comes to you from the Northwest News Network, a collaboration between public media organizations in Oregon and Washington.

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News Source : https://www.opb.org/article/2026/07/31/southern-oregon-university-budget/