Oregon’s Higher Education Coordinating Commission is taking its first steps toward stabilizing the state’s public universities. But some of its most dramatic ideas — auditing academic programs or merging institutions — are controversial with commission members and university leaders.

On Tuesday, commissioners approved a public university spending efficiency report that includes legislative recommendations aimed at alleviating the compounding financial pressures squeezing Oregon’s public universities.

“The legislature taking up these recommendations doesn’t make those financial realities immediately go away, but it does put some different options on the table,” HECC Executive Director Ben Cannon told commissioners at the meeting.

The report analyzed how the state’s public universities manage their budgets with a focus on how efficiently institutions spend public dollars. The Oregon Legislature mandated the HECC compile the report last year to help inform future state budgeting decisions.

The state’s seven public universities have historically been good stewards of public funds, according to the analysis. It notes that the institutions have increased affordability for low-income students and boosted graduation rates over time.

But the report also found that the state’s financial landscape for higher education is increasingly uncertain. Years of decreasing enrollment, rising personnel costs, stagnant state support and federal funding cuts are pushing universities to a breaking point.

And to address these financial challenges, universities can no longer operate business as usual.

“What’s envisioned is a series of conversations with universities to identify and explore opportunities for partnership that could help sustain access and opportunities for students,” Cannon said. “The failure to go down that path means we are likely to [continue to] experience at many of our universities very difficult budget cuts that have negative impacts on students and communities.”

Among the more transformative recommendations is a directive that could shrink the number of public higher education institutions in the state. That recommendation asks lawmakers to direct the HECC, in coordination with universities and colleges, to develop proposals for possible mergers or cooperatives of institutions.

University mergers are becoming more common across the nation as institutions face financial pressures. Willamette University and Pacific University announced a plan to merge last month.

RELATED: Willamette, Pacific universities announce plan to merge

Another recommendation addressing academic program reviews and renewals caused a stir among university representatives and some commissioners at the HECC meeting on Tuesday. The agency currently approves new degree programs but it does not have a mechanism to audit them. The proposal requests the legislature to require HECC to periodically review and renew programs.

“Having HECC, alone, review these degree programs sets a dangerous precedent for politicization,” HECC commissioner Evelyn Kocher said at the meeting. “It also cuts out experts at these universities that could contribute to the review of these programs.”

Other commissioners clarified that the program review recommendation is still subject to discussion and negotiation. Kocher voted against approving the legislative report.

University leaders said the report and its recommendations fail to include university stakeholders from the beginning, threaten institutional independence and don’t address what they believe is the root cause of their institutions’ financial problems: a deprioritization of higher education funding from the Legislature.

In public comment, Southern Oregon University President Rick Bailey said many institutions have made a series of budget cuts, in part due to stagnant state funding.

“In four years, I’ve made decisions that have eliminated 25% of our workforce. Imagine that happening at any other state entity,” Bailey said. “Our colleagues are all doing similar painful work and so we have to ask, how much more efficient should our seven universities be?”

Oregon has consistently trailed other states when it comes to funding its public universities and colleges. Oregon ranks 37th in the nation for public higher education funding, spending just over $8,600 per full-time equivalent student. That’s about $3,000 below the national average, according to the most recent State Higher Education Finance report produced by the State Higher Education Executive Officers Association.

Other recommendations from the HECC report, such as the legislature setting up a separate salary pool for university employees and continuation of one-time, sustainability funds, were met with a more positive response.

The sweeping report and recommendations come a month after Oregon Gov. Tina Kotek unveiled her “prosperity roadmap,” a new state vision to build up the state’s economy and workforce.

In a Jan. 2 letter, Kotek called on the agency to “take a proactive role in setting expectations for institutional fiscal management, planning, and communication.” She specifically called for alignment of higher education priorities with the state’s workforce and economic goals.

Changes to how the state’s public universities operate could come rather swiftly. As currently written, the merger recommendation comes with a deadline for “targeted institutional integration” proposals by January 2027 — just a year from now.

But HECC commissioners pointed out that the report and its recommendations mark the beginning of a collaborative process that leaves room for refinement. HECC commissioner Michael Dembrow said any of the actions taken by the agency will be accompanied by calls on the legislature to boost higher education funding.

“This report shows very clearly that universities have been working hard to contain costs,” Dembrow, a former legislator, said. “It once again reminds us of just how far behind our funding of higher education is.”

News Source : https://www.opb.org/article/2026/01/07/oregon-higher-education-public-universities-spending-efficiency/