The Reality of Oregon’s Budget Crises: Cause and Cure

You can’t make an omellete without breaking eggs

The Oregonian began a self-described “occasional series” regarding Oregon’s state budget deficit. The Oregonian ignored this problem for two decades but now feels compelled to write in support of Gov. Kulongoski who, having contributed significantly to the problem, has now on the eleventh hour of the three hundred sixty-fifth day “discovered” that things just cannot continue this way – what a guy.

However, you don’t need an “occasional series” to discover either the cause of the problem or the solution.

Oregon state government has a spending problem. It has for at least two decades accelerated spending at a rate significantly greater than its citizens’ ability to pay. According to the United States Department of Commerce, Bureau of Economic Activity, Oregon’s total personal income has grown from $66,230.7 Million in 1994 (the year John Kitzhaber became governor, to $136,449.4 Million in 2009 (the most recent figures available).

“Total personal income” is defined by the Bureau of Economic Activity as:

“. . . the income received by all persons from working (participating in production), from government and business transfer payments, and from government interest. Personal Income is the sum of net earnings by place residence, rental incomes of persons, personal dividend payments, personal interest income, and transfer payments. Examples of transfer payments are Social Security payments, Medicare payments, unemployment insurance payments and veterans’ pensions. Personal income is measured before the deduction of personal income taxes and other personal taxes.”

That represents a total growth of one hundred six percent over a period of fifteen years.

During that same period of time, according to the Oregon Legislative Fiscal Office, Oregon’s general fund and lottery budget has grown from $6,411,323,201 to $13,319,414,597 or one hundred eight percent. (While one might suggest that we not get too excited by a two percent differential, that two percent represents $266,388,292 or about one-half of the current general fund deficit.)

But Oregon doesn’t operate on just its general fund and lottery fund budgets. During the same period of time the “all funds budgets” grew from $20,409,884,510 to $59,647,159,162, or a staggering one hundred ninety-two percent. In other words, Oregon state government grew spending at just about double the amount that Oregonians personal income grew.

The Oregonian article noted:

“Consider this sobering fact: State expenses, including payroll, health and retirement benefits, and debt payments are slated to rise by nearly $4 Billion over the next two years – a 26 percent jump. During the same period, however, revenues to pay those expenses are expected to increase by a little less than $2 Billion, or about 14 percent – and that assumes a return to a robust economy.”

The likelihood of a robust recovery is practically nil according to State Economist Tom Potiowsky and other leading state economists.

Potiowsky predicts a decade of red ink for Oregon state government with projected growth in spending exceeding revenue –even under healthy economic conditions – by nearly $10 Billion.

And while Kulongoski’s new found “fiscal reality” comes at a convenient time – the end of his public service, the economic idiocy he so readily embraced for seven and one-half years as governor, is still alive and well amongst other leading Democrats – all of whom are looking for future elections and are, therefore, beholden to Oregon’s public employee unions for financing. Their myopia is evidenced by the comments of Oregon’s Speaker of the House, Dave Hunt D-Portland, who according to the Oregonian stated:

“It’s a one-time deficit. Once we cut that [the budget], it all comes back into balance.”

As important as grasping the reality of a sustained period of economic difficulty is, grasping the reality of what is necessary to reduce the state budget to a level that reflects the ability of Oregonians to pay is what is required. The preferred solution by Kulongoski and Oregon Democrats is to cut services as evidenced by the recent “across the board” cuts implemented by Gov. Kulongoski. The sick and the poor took a hit of about $180 Million. The school children took a hit of about $240 Million. And the original proposal was to close five prisons and turn the criminals loose on an unsuspecting public. That’s it – the Democrat solution – make the citizens suffer, suffer enough so that they can raise taxes yet again.

In the process, Kulongoski and his Democrat colleagues have steadfastly refused to recognize the obvious. The single largest source of expenditures by state government is not welfare or social services – it is salaries, public employee salaries and benefits. And yet, while one might expect that a “nine percent across-the-board cut would result in a nine percent reduction in public employees, what Kulongoski implemented was a reduction of 0.3% reduction – 220 employees – less than the number of state employees who leave through natural attrition.

You simply cannot reduce Oregon’s budget by $2 Billion in the next biennium (more likely that number will be in excess of $3 Billion by the time the legislature meets) without reducing the number of public employees and making significant reductions in their salaries and benefits.

For instance, Gov. Kulongoski has added about 7,000 new state public employees since he took office. It is generally accepted that each state public employee costs about $80,000 per year, including benefits and payroll taxes. That means that Kulongoski has added $560 Million annually, or $1.120 Billion for each biennium through new hires. That does not include the twice-yearly salary increases and increased costs of PERS and healthcare for the other 72,000 state public employees.

So why do Kulongoski and the State Democrats choose to burden the elderly, the sick, the school children and public safety instead of dealing with the principle source of cost? It’s quite simple. The elderly, the sick, the school children and the general public don’t fund the Democrats’ campaigns. The public employee unions do and their demands take precedence in all decisions by the current state government.

If Oregon state government ever wants to get serious about dealing with its fiscal problems, it need only take three simple steps – none of which will impact the delivery of needed service to the poor and the elderly, nor impact school children, nor endanger the public safety.

Those steps are:

1. Reduce the number of public employees by the 7,000 that Kulongoski has added during the last seven and one-half years. Savings: $1.120 Billion per biennium.
2. Stop paying the employees’ share of PERS – six percent of their salaries. Savings $432 Million per biennium. (72,000 public employees X six percent of $50,000 annual salary X 2 years).
3. Require public employees to pay one-half of the costs of healthcare above $1000 per month. Savings: $345.6 Million per biennium. The figure is arrived at using 72,000 state employees and a low estimated cost of healthcare at $1,400 per month for two years.)

There are additional savings to be had by limiting public benefits (welfare, healthcare, and education) to those lawfully in the state. In 2008, the Federation for American Immigration Reform (FAIR), utilizing a Pew Research study of United State Census Bureau statistics, estimated that there are about 125,000 illegal immigrants in Oregon. FAIR estimated that these illegal immigrants imposed a cost of approximately $400 Million annually ($800 million for the biennium). With the crackdown on illegal immigration in Arizona and the virtual “sanctuary state” policies of Kulongoski and the state’s Democrat leadership, those numbers have surely grown.

The bottom line is that John Kitzhaber has already demonstrated in his eight years as governor that he cannot, or will not, deal seriously with these problems. The verdict is still out on Chris Dudley but one would hope that he will be more like Gov. Chris Christy of New Jersey than Sen. Chris Dodd of Connecticut.

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  • Marvin McConoughey

    This is a succinct and insightful summary of Oregon’s state spending problem. Many citizens have called for spending sobriety over the past decade. With few exceptions (none that come to mind) citizen concerns have been dismissed, ignored, or condemned. Throughout the growing debacle, unions have been obstructionist and recalcitrant.

  • Britt Storkson

    Government has degenerated into a “Buyoff/Payoff” scheme where the objective is to pay off campaign contributors by taking money by force (taxation) from those who earned it and giving it to those who didn’t earn it.

    Government should be spending money on those things are are PUBLIC that can be used and benefits EVERYBODY. Instead money is being funneled to private individuals who “feed back” some of this money to buy off politicians to maintain this money flow.

    It has been well documented that the more one gives to a politician the more one gets back from government for their private benefit at the expense of others. This includes unions as well as private corporations. If tax money doesn’t go things that benefit the PUBLIC it shouldn’t be spent at all.

    • a retired professor

      I’m afraid that nothing benefits EVERYBODY. Nothing. NOTHING!

  • Rupert in Springfield

    All sensible solutions, and all that have been proposed many times.

    Basically state employee contracts need to be negotiated into the real world. That means those employees paying for all the cushy benefits they get and getting rid of nonsense like the constant raises.

    If state employees don’t like working with the real world compensation most face, then they can be shown the door to that real world. Plenty of people out of work willing to take their jobs. Most of this stuff isn’t brain surgery.

    When you are building trains at a quarter billion dollars a mile that people dont really ride the skill set isn’t that large, most can waste others money without breaking a sweat.

    As for the burger flipping jobs – working at DMV, mowing the lawn at the capitol etc. You don’t have to be paying much above minimum wage for this sort of thing. Ten to twelve bucks an hour would probably get a line of takers around the block who were fully up to the task.

  • Anonymous

    …..”Throughout the growing debacle, unions have been obstructionist and recalcitrant.”…..

    And you can count on that continuing. All three steps Larry suggests will be fought vigorously by the unions by pulling the strings of the legislative puppets they control. Those puppets will dance or they will be replaced by new puppets that will.

    Sad but that’s the way things are in Oregon.

  • Bob Clark

    So, it seems like state employment increased this past decade, largely because of federal programs (the all funds budget). As the federal government tries to scale back, Oregon is left with the extra employment costs and having to cut the federally supported programs. This is the problem with relying on the federal government. It would be nice to scale back the shell game where Oregon sends money to the Feds in taxes and the Fed shovels money back to Oregon but with lots of strings attached. Instead, states should just pay their share of the costs of the Military and national parks.

    This is where cutting state expenditure on things like the Milwaukee light rail project comes into play. Just because the Federal government wants to entice us into investing our money into a money losing project doesn’t mean we should. Cutting this federal state shell game would be one step towards letting Oregonians lower their federal taxes and raise their state taxes. At the same time, public employee compensation should indeed be brought down in line with private sector compensation. Private sector compensation used to exceed public sector compensation, reflecting the riskiness of jobless the former versus the latter.

  • a retired professor

    The “all funds budget” consists of the general fund, fees + investment income, and federal funds. The first of these has basically grown with the economy, as the article (grudgingly) acknowledges. The third is beyond state control; if it drops, state expenditures will drop, as they should.

    That leaves fees + investment income. Most of the latter is probably PERS money, and can’t be touched. (Sorry, no way you’re going to be allowed to steal my pension from the years I was in PERS). That leaves fees. It would be very interesting to see how much that has grown and where it comes from and where it goes. Does it include out-of-state tuition that is subsidizing (and actually keeping alive) your state universities? Yup, I think it does. Does it include income from the Ducks and Beavers atheletic programs? Yup. Better take a closer look before you decide you want to cut it.

    As for employment by the state of Oregon of public employees: as someone here — was it me? — pointed out a while back, such employment actually has lagged state population growth.

    What you have, then, is a state with a declining economy and declining ability to fund public services. Want to compensate by cutting employee pay? Go ahead and give it a try, I suspect both governor candidates will.

    Another way is for the state to simply “tighten its belt”, as many of you are always saying. Meaning tighten YOUR belts, as in accept less services.

    Probably some combination of these two will take place.

    (A third alternative would be to bring Oregon’s economy back to life; not likely — we’ve been slipping relative to the national average for going on 70years. Interesting why this might have happened, but don’t hold your breath waiting for it to end. Too many interests in Oregon from both left and right are invested in keeping it that way.)

    • Steve Plunk

      The idea of accepting fewer services will soon be the reality. Personally I think citizens will see little difference and can adjust quite well with fewer services, reduced service levels, and less government.

      While we could say it will require belt tightening by the citizens I don’t see it like that. The current level of services provided were never driven by citizen demand but rather from the executive branch departments convincing the legislature those levels were needed. I should say desperately needed since that’s usually how it was pitched to the legislature.

      Not only does the executive branch push spending through it’s ever increasing budget requests but it also pushes spending through new program creation and increased regulations they promulgate or propose to the legislature. Most spending increases at all levels of government is conceived by government itself. If there is private sector or citizen requests you will find it comes from those with special projects or the beneficiaries of crony capitalism. Road construction companies are notorious for this.

      Diminishing returns on public sector investments has soured citizens on tax increases for years. It’s not that we don’t believe in infrastructure investments and maintenance as much as we see waste in project selection, design, and construction. We also see waste in public employee compensation and benefits. Trust has been lost and can only be won back over time.

      • valley p

        “While we could say it will require belt tightening by the citizens I don’t see it like that. ”

        Maybe Steve, that is because you may not be one of the citizens who has to tighten up. For example, you are probably not an elderly person dependent on subsidized help around the home. If you are, you will have to get along without it. You may not be a low income mother of 2 who needs help with day care expenses so she can work. She will have to buck up and call grandma for help. You may not be a student who will see more tuition raises. Tough luck about those mounting student loans. And you may not be a 10 year old crammed into a classroom with 35 other kids. Too bad for her.

        Of course, since these services are not demand driven by the people, and are merely wasteful things the executive and legislative branches made up for no good reason, why worry? We won’t miss them when they are gone.

        • Steve Plunk

          I suppose making up examples of where cuts might come provides something of a defense to my point. It’s not much but if it’s all you got then so be it.

          I suppose grandma could help the single mom and things would be fine. The elderly woman could probably get some volunteer help or have family help out. Subsidizing higher ed through loans needs to end, it’s a racket for the colleges and their overpaid administrative staff. If the teachers hadn’t have demanded wage increases, PERS left untouched, and all their health insurance paid school districts could afford more teachers.

          valley p as usual your snark is ineffectual on facts and common sense. By all means keep playing the violin for fictitious examples while the real world deals with the mess liberalism has caused.

          • valley p

            I don’t need to make things up. These are the programs already being cut, so we should expect more of the same. I could add prison closures, fewer bridge inspections, more potholes, and fewer state cops, but they you would accuse me of scare tactics right?

            You want to end student loans? Interesting. How then would students pay for college?

            If if if….that is your answer? If our teachers were nuns who made vows of poverty, problem solved? How dare they ask for wage increases, pensions, and health care benefits? The nerve of them.

          • a retired professor

            Ah, end student loans. Many of these guys think college costs will magically drop to compensate if that happens. (Yeah, just as old people on medicare and the medicaid people will get free medical care if only we’d end those programs. Just like back in the old days.)

            Another possibility, of course, favored by some, is to go back to when, say, 10% of the population got college degrees, instead of the present (but dropping) 30% or so.

            in my experience, almost all of such people have enough money that THEIR kids go to private colleges.

          • valley p

            “in my experience, almost all of such people have enough money that THEIR kids go to private colleges. ”

            My experience is that there is a lot of intellectual resentment from people who could not quite hack it in college, but maybe did okay in business or a trade, and they have convinced themselves that a college education is overrated so why worry. Their kids probably DON’T go to college.

            Its ironic in that the US university and college system is the envy of the world and students come from all over to access it,even to our 3rd rate universities like PSU (where I teach part time). It is probably the best competitive edge we have, and these yahoos are willing to throw it away to save a few bucks. It is beyond short sighted. It is refusing to buy glasses.

          • a retired professor

            My experience in recent years of people who denigrate publicly subsidized higher education has been mostly with well-educated people of a conservative persuasion. This is not all such people, but you can find them hanging around, say, the National Review website, Cato Institute, working for the Heritage Foundation, and the like. In almost every case, their own, sometimes not too bright kids go to college, often private, sometimes public (and then it’s really weird to listen to them knocking public colleges). But the point is, it’s not THEIR kids that they want to be hairdressers, plumbers, cooks, electricians, etc. (I’m not knocking any of those occupations, I’m just reporting others’ attitudes.

            My experience of more mainstream, mostly apolitical people is that they generally respect higher education and want it for their kids, where that makes sense. Maybe I just don’t meet up much with the yahoos, I don’t know.

            Oregon IS weird compared to most states. As someone here — eagle? — recently documented, the community colleges are rather lushly supported, while the four year colleges, especially the two “major” campuses UO and OSU, are starved, compared to other states. I admit, I was startled when I came here long ago when I learned this. It took me a long time to accept that that’s just the way it is in Oregon. It’s quite a lot different in California, of course, and Washington too. If you want to look at conservative states, Texas too. (They have low public support for their public universities, but huge private endowments including a big slug of oil money.) Or take a look at relatively conservative midwestern and even some states of the “Old South”. I admit, I just don’t get it about Oregon and never will.

            Anyhow, Oregon is likely to cut back the public universities even more. It would probably be better if they just let UO and perhaps OSU free to go off on their own.

          • Anonymous

            Too bad all that higher education can’t include how to balance a budget without punishing the taxpayers by increasing taxes, fees, registrations, licenses and anything that they can think of.

            It is time for Politicians and public employee unions, to learn to live within a budget, during good and bad times. And stop being so selfish and greedy.

          • Anonymous

            It may come as a surprise, but people like me don’t work for nothing. You hacked away at our budgets for decades. Tuition increased accordingly.

            As I said:

            “Anyhow, Oregon is likely to cut back the public universities even more. It would probably be better if they just let UO and perhaps OSU free to go off on their own.”

            If people don’t like the deal that these places offer — they are rock bottom in student expenditures compared both to private universities and most other states — don’t expect their services.

          • Marvin McConoughey

            I wonder what percentage of high school students should go to college? Surely, it is less than 100 percent. The puzzle is, what percentage is optimal for this state at this time? OUS was recently considering going to the semester system. Having studied under that system, it seemed quite acceptable and saved a bit on books.

          • a retired professor

            Oregon will soon be — already is — enjoying the benefits of a population with dwindling education (fewer going to college). Maybe soon we’ll be outsourcing higher ed to India and China.

            The move to semesters will not happen. It would be quite a costly transition. It would cost money, not save. Cost the system, that is, but of course, someone will pay. Also, many people believe that quarters have educational advantages.

          • valley p

            What percentage “should” go? What does this question mean? Should the umber of people who choose to go to college be determined by government policy? Is that what you are suggesting? That is pretty much what they do in Europe. Limit the spaces available and thus the cost. Is that what you really want here?

          • Marvin McConoughey

            You ask “Should the number of people who choose to go to college be determined by government policy?” Government policies certainly influence how many individuals choose college, as famously seen in the GI Bill. However, I don’t favor having government set explicit numerical limits on college entry

          • valley p

            “Sadly, America came to see the upward and onward postwar boom as an entitlement when it was more of a temporary phenomenon not to be taken as “how things are.”

            That is a pretty fatalistic viewpoint. It treats events as simply immutable. We boomed after WW2 not because of anything we did or didn’t do, but simply because we were luck? And now we are floundering not due to our policy choices, but due to fate? My Greek ancestors would be proud of you.

            No Mathew. Its not about fate. We made choices after WW2 that contributed mightily to the boom, most notably the GI Bill that paid for college for many millions of Americans. That act alone turned higher education from an elite priviledge to a middle class expectation. We have made choices that have contributed to our present mess. We had a great run of growth and shared prosperity in the 1990s. That ended in 2000 with the election of GWB and a marked shift in policies away from what was working and to what does not work. If we manage to get ourselves back on track we can prosper once again. But if we short change education we will bury ourselves.

          • Marvin McConoughey

            Not sure here what “shortchanging education” equates to in dollars, in your view, nor what you would find minimally acceptable. We currently spend more than $1,000,000,000,000.00 per year, officially, on education in America. It is a significant chunk of our $14 or so trillion dollar economy. How much should we spend?

          • valley p

            How much? Good question. I don’t know the answer. But I do know that if we don’t spend enough to have a well educated populace we are screwed. A well educated populace today means most adults have had at least some education beyond high school. All signs are that we are presently losing ground, which suggests that we either are not spending enough, or we are spending badly, or both. Liberals tend to say we are not spending enough, conservatives say we are spending badly. I can deal with both arguments. What I can’t deal with is when people suggest that education does not matter much. Way wrong. It matters.

          • Marvin McConoughey

            We may not be able to spend enough to have a well-educated population, both because of our economic limitations and because formal education does not create a well-educated person, though it can supply a person with credentials. Being well educated seems ever-more elusive as the world of knowledge grows and personal learning ability remains limited by our inherited brain.

          • eagle eye

            Somebody just recommended this. From a REAL conservative. Also a retired professor from the University of Illinois — hard to say he’s just a yahoo.

   an excerpt:

            “Bad Students, Not Bad Schools is an Emperor’s new clothes book—it openly speaks the unspeakable: America’s education woes are caused by intellectually mediocre, unmotivated students, not “bad schools,” rotten teachers, faculty curriculum, lack of sufficient funding and similar alleged culprits. Alter the student population and push students harder, even if this means lowering their self-esteem and America’s schools will thrive. If mischief-makers refuse to learn, let them drop out! Politicians and professional educators avoid this awkward reality and prefer instead to squander billions while lurching from one guaranteed-to-fail gimmick after the next.”

          • a retired proessor

            Ouch! Weissberg must make almost everyone furious. Probably good for his own sake that he’s retired. He’s probably too hard on the students and their parents, but basically he’s right. We are a society that generally doesn’t value academic and intellectual things, doesn’t value performance. Then we look for magic formulas when the inevitable poor showings come to light. As a wise TA told me once in math, “Work harder if you want to do better.” I didn’t like it, but he was right. Oh, the guy was a foreign student, Chinese.

            I wonder if Weissberg takes on the racial/ethnic aspect of mediocre American student performance. Most of the lag in international comparisons can be chalked up to that. He better be retired if he goes there. It’s a national time bomb, the national future is jeopardized by it, but everyone is afraid to face up to it.

          • current UO student

            “If the teachers hadn’t have demanded wage increases, PERS left untouched, and all their health insurance paid school districts could afford more teachers.”

            Teachers demanded wage increases because they are overburdened by student loans; to be eligible for an Initial II Teaching License one must hold a master’s degree. If they weren’t required to hold an advanced degree, which has recently been shown to not be tied to teacher effectiveness, then lower salaries would be both justified and appropriate. Requiring an advanced degree is, simply put, bad policy, and one that creates massive inefficiencies. That said, the unions would be wise to concede some of the healthcare benefits (though we all know they won’t).


          • Marvin McConoughey

            Thanks for your excellent post. The problem of over-credentialing comes, in part, because educators have never agreed on an effective way to rate and document teaching effectiveness. Unions usually insist on perfection before they accept performance rating. In real life, performance rating tends to be rather messy, imperfect, and controversial. It only exists in the private sector because it works better than not evaluating people on their performance.

        • an inquiring mind

          This all sounds like a too familiar story. A group of people go out to dinner, and place various orders for food items. Some of these items meet required needs for nutrition, sustenance, and are moderately priced; however, some of the items verge on redundancy, superfluousness, and have no proven merit for promoting health or nutrition, and may be quite expensive. Then, when the bill comes, all the people fight about who is to pay what, and how much each should pay.

          I see a multitude of reasons why the above scenario happens:

          1. Some people try to order for the table, thinking that all will enjoy or need a particular item.

          2. Some people can’t make up their mind for themselves what they need, and let someone order for them. If they are satisfied with the result, they provide accolades for the orderer’s development and knowledge of “taste.” This positive reinforcement then allows the orderer to continue pursuing the behavior either to everyone’s advantage or disadvantage. The other situation is that people are unsatisfied with the orderer’s choice, and then act completely affronted and disgusted, when it is they that should take responsibility for not ordering for themselves.

          3. Some people order more than what they can eat and/or pay for.

          4. Some people refuse to order, but then eat off of their neighbor’s plate and feel completely entitled to not contributing toward the bill.

          5. Then there are some people who make careful calculations about what it is that they need and want. If they end up with leftovers, they take them home and eat them another day when eating out may be beyond the daily budget.

          We all fit into one of these categories at different times, and possibly other categories as well; however, the only ways to get out of the restaurant are to either pony up some money, wash dishes, or dine and dash.

          When it comes to paying the bill, people will only contribute so much. If some are forced to pay more than what they think is acceptable, then they probably won’t dine again with the same people. Others will have to work or make sacrifices in order to cover their share of the bill. Finally, for those that dine and dash or mooch off of others, well may be they should just create a restaurant of their own, and see how long that works out for them.

          I personally try to behave according to option five, and I hope other’s would do the same.

          • valley p

            I may be slow on the uptake, but I don’t get the analogy. Public policy is akin to everyone going to dinner together? I wish it were that simple.

      • a retired professor

        Suppose they decided to have large cutbacks in higher education and furthermore, decided as a matter of prudence, as has been proposed in the past — wise use of resources — to close one or more of the weaker state campuses, e.g. probably SOU and/or EOU?

        You could call this “making up examples”, but it’s not a completely unlikely scenario.

        In any case, those places are going to get cut, probably a lot, and those who use and value their services are going to be paying more.

        • eagle eye

          I doubt that they would ever close one of those smaller campuses, unless the state goes truly bankrupt.

          More likely, they’ll just continue to reduce higher education in the budget, and the campuses will keep cranking up tuition to stay open. Eventually, maybe there will be no subsidy and they’ll essentially be private campuses. Or state-run private institutions. Public universities with no public funding is maybe a better way to put it.

          What do you think of the proposals to decentralize the campuses?

          • a retired professor

            decentralization probably a good idea. Very modest steps they have in mind. There is a proposal from UO to become semi-independent in return for a BIG chunk of new private funding. Will the state ever surrender control? Will they ever stop milking UO to support the struggling campuses? I have my doubts.

            None of the campuses except UO and possibly OSU could ever make a go of it on their own, even a semi-go, I mean even partially on their own.

        • Marvin McConoughey

          Small college attendees may be hurt if budgets revert to prior levels. The alternative of raising taxes in a declining economy would also hurt. Sadly, America came to see the upward and onward postwar boom as an entitlement when it was more of a temporary phenomenon not to be taken as “how things are.” How do poor nations provide higher education in sufficient amount to out-compete us?

          • eagle eye

            This might be of interest, from a post a few days ago:

            there was some recent news about the “Delta Project” on trends in higher education expenditures. Go to


            and then click on “Full Report.”

            Then go to the data, you’re best off with three of the graphs on pages 50, 51, and 33, that’s Figures A3, A4, and 13.

            You’ll find:

            p. 51 Oregon CC expenditures per student (full-time equivalent) at least as of Academic Year 2008 were 4th in the country at roughly $14,300 with most of that coming from public subsidy.

            p. 33 Oregon expenditures per student at public research universities (UO, OSU, and PSU, sort of) are near the bottom, right above Mississippi. The public subsidy is near the bottom, too. It’s FAR less than at the CC’s.

            Most amazing, the expenditure per student at around $11,800 is much less than at the CC’s, by $2500, if I’ve done the arithmetic right. Even though upper division programs generally cost much more than lower division. (I don’t know if the figures include graduate students; if they do, the comparison becomes even worse. The numbers undoubtedly exclude athletics, dorms, research grants, extension etc. which are funded by other sources; the comparison is supposed to be of student-related academic program expenditures.)

            p. 50 Oregon expenditures per student at the “master’s universities” i.e. WOU, SOU etc. are also near the bottom and lower than at the CC’s.

            So there you have it: Oregon CC’s funded near the top, at a level much higher than the 4-year colleges, which are near the bottom, down with states like Mississippi, New Mexico, etc. And in Oregon, the 4-year college students pay a much heftier share of the costs than do the CC students, and students in almost every other state.

            It’s even more extreme than I had ever imagined. I hope all those CC students appreciate what they’re getting.

  • Marvin McConoughey

    Thanks. I am downloading the report. It is hard to know the best mix of CC vs 4 year college expenditures. For some, the CC equates to the first two years of a four year degree. Some go for recreation, others for jobs that only require specialized knowledge, but not a degree. Have Oregon’s 4-year universities reacted to Oregon’s extreme difference of higher education funding (CC VS 4 years?).

    • eagle eye

      I think they’ve reacted with quiet impotent fury, knowing there’s little they can do about it. In the round of higher education hits a couple of years back, I believe CCs took it on the chin a bit, the state knowing how well they’ve done. Probably that’s as far as it will go.

      I think the proposals for very modest restructuring of the Oregon University System are part of this picture. Basically, the state campuses have given up on the state. The ones that could sort of make it on their own UO? OSU? — would like to have more of a chance. It’s really hard to see any of them being really independent except UO, and then only with some pretty big outside private dough — I mean a multiple of all private giving up until now to Oregon public campuses together.

      Somebody told me with some pride that the University of Oklahoma (!) had made it to the US News list of the top 50 public campuses. Along with such worthies as Berkeley, Iowa, Alabama, Georgia Tech … but you won’t find UO or OSU on that list. Pretty sad.

    • a retired professo

      You asked how the 4-year universities/colleges react to the disparity in funding between community colleges and themselves. Probably the reaction of the college presidents as eagle describes. As for the faculty, probably at least 95% of them unaware, most likely 99%. They know of the generally abysmal level of funding of their own campuses, but not the high CC funding. When you add the two together, Oregon higher ed funding is not so bad. When this is pointed out, most faculty find it hard to believe, because they don’t have a clue about the CC’s.

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