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Instruction
GUITAR LESSORS FOR CREDIT1 Rock,
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ART CLASSES CLOSED? ’ mat yourser lo an
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Regetration begns Tuesday. Jan 12 at noon
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University
Update No. 1
To provide members of the University community -with
official information from the administration, the Office
of Public Services still publish m this format statements,
anssters to current questions, responses to rumors, and
facts about the budget crisis as detail: become available.
Students, faculty, and staff may address questions to
"University Update, "c!o Office of Public Services,
111 Susan Campbell Hall. This is the first report.
The President’s Views on the Governor’s
Proposed Ten Percent Reduction of Genera]
Fund Support of Higher Education (a condensa
tion of remarks made January 4, 5, and 6, 1982):
The Governor’s proposal calk for a ten percent
reduction ($28 million) for the eighteen-month
period, January 1, 1982 through June 30, 1983, to
be implemented in two separate five percent steps.
For the University of Oregon each five percent
step would equal $2.9 million or a total of $5.8
million in eighteen months.
The University had already reduced its 1982-83
base budget by approximately $4 million through
selective budget cuts across the institution before
the new cuts were proposed.
Further Tuition Increases Opposed
To implement the first of the Governor’s five
percent reductions, a combination of program cuts,
tuition increases and a 1.5 percent salary reduction
would take effect within the State System. Pre
sident Olum opposes additional tuition increases
because of the resulting denial of a college educa
tion to students of modest means and on the
grounds that legislative action in 1981 has already
required tuition increases totaling forty-two per
cent. Any further increases would very likely be
self-defeating since they surely would cause a
significant enrollment drop. Resulting losses in
tuition income could very well undo a large part of
the present effort to raise additional revenue from
this source. Raising tuition further is simpiv not
sound policy from a ethical, educational or financial
point of view.
Salary Cuts Opposed
Part of the first five percent cut and the entire
second five percent cut in the Governor’s proposal
rely on reducing the salaries of University employes
who have already suffered a serious loss of salary
base in recent years. It is terribly unfair to ask only
higher education employes to take salary cuts to
relieve the State’s revenue shortfall, rather than
sharing this burden more broadly across the state.
Such salary reductions would most likely drive away
large numbers of faculty, many of whom have
excellent offers now from other institutions, but
who remain with the University because they care
about it, believe in it, and are committed to its
students. For even the most loyal, there is a limit to
the sacrifice which can be imposed on them. A most
serious consequence of the salary reduction plan is
that it will require a formal declaration of financial
exigency by the University . This is the academic
equivalent of institutional bankruptcy. It savs we
cannot honor the employment commitments and
contracts we have made in goodfaith. Such a
declaration will have a devastating impact on the
reputation of the institution and on its ability—for
many years—to hire first-rate faculty.
Should Programs Be Cut?
The implications of the only other possibility-ad
ditional program cuts beyond those already im
plemented—must also be considered. If an addi
tional five percent (S2.9 million) were to be taken
entirely from new reductions in the University ’s
programs, the only option left this University would
be to eliminate completely certain major academic
units. The Provost’s Office has calculated amounts
that could be realized by closing some of the
professional schools to effect necessary savings It
should be noted that while the University saves the
costs involved m operating a school, the tuition
generated by its majors and the overhead generated
by federal grants and contracts administered in
those schools would be lost.
Hypothetical Example
Before proceeding, President Olum made it clear
that the calculation was performed only to show the
extraordinary consequences of the alternative, and
he stated that the University would regard any such
action as utterly unthinkable.
In fact, the termination of three professional
schools would not save the required S2.9 million. In
the Provost Office example, closing four profes
sional schools, Le., Law, Music, Architecture and
Allied Arts, and Education, would generate a net
saving of S3.3 million, slightly more than is
required. By exchanging the Labor Education
Center and the Bureau of Governmental Research
for the College of Education, the $2.9 million
figure would be more closely approximated.
Closing the four schools would deny some 3,800
(about rwenty-five percent; University students the
opportunity to complete their professional
academic programs. Some 17 million in contract
and grant funds would be lost by these closings, and
about 275 employes would be dismissed—for just
one five percent budget adjustment
The closure of schools is disruptive, unethical and
possibly even illegal in its consequences to students
launched in their professional program training.
The effect on the integrity and excellence of the
University would obviously be disasterous.
Economic Loss Forecast
There would be a significant impact of such actions
also on the economy of the Eugene/Springfield/
Lane County area. If these four professional
schools were to be closed, the University would
remove some $9.5 million in salaries paid to faculty
and staff as well as funds for supplies and services,
etc. from the cash flow of the area. Note: only $3.3
million of this $9.5 million is actual budget “sav
ings”; $5 million would be loat when the affected
3,800 students no longer enrolled stopped paying
their tuition and fees. The remaining Si million
represents the loss m overhead funds from aban
doned grants and contracts.
The University estimates its students, on the
average, each spend approximately 12,500 per year
in the community for goods and services provided
by local firms and merchants. So the total funds
which would no longer find their way into the local
economy would be some $19 million. Using the
modest multiplier effect (the number of times
money changes hands within a community before
moving out of the community) the loss to the local
economy becomes a real loss of about $47.5 million.
That sum is equivalent to around 2,400 mill
workers’ jobs at $20,000 each. This estimate does
not include the impact on the local community of
the loss of about $7 million in grants and contracts
wluch would also have been spent largely on salaries
and services in this area.
University Aids State Economy
While the loss of nearly 150 million to the local area
would also be felt throughout the entire State, a
severe deterioration of the quality of higher educa
tion would also have extremely negative implica
tions for the future economy of the State of
Oregon. These consequences go well beyond the
direct impact of lost income.
The State of Oregon urgently needs economic
diversification. To achieve this, it needs to and can
attract high technology industry. One of the single
most important requirements for attracting such
industry is a strong and flourishing system of higher
education, particularly of the research university
quality. Such industry wants the advantages of easy
contact with university researchers, the special
qualities of living made available in a university
community , and the trained technical work force
which can be provided by such institutions. Surveys
by Economic Consultants Oregon for the Eugene
Development Commission and by the Stanford
Research Institute of Palo Alto at the request of
House Speaker Hardy Mvers indicate that this
requirement is more important even than the
nature of the corporate tax structure in determining
where such industry will locate.
One of the most important steps which ought to be
taken to attact new business and industry to Oregon
is to assure the strength and quality of higher
education m the State.
In concluding his remarks, the President urged his
listeners to write to their legislators to express their
views on the proposed budget cuts.
★ ★ ★
The Education Subcommittee of the Joint Ways
and Means Committee last week strongly opposed
the second five percent budget cut package (which
funds would be saved entirely from cuts in salaries).
Considerable sentiment opposing the 1.5 percent
salary cut in the first five percent package also was
expressed. Additionally, offsetting some portion of
the proposed tuition increase in this first package
has been suggested. Since the program cuts made
in the first five percent package are based on
reductions already made at the Chancellor’s in
structions in anticipation of the revenue shortfall, it
would be possible under these conditions to pre
serve the central elements of the University.
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2441 Myard • 345-1324