State university leaders have been complaining for years, though more angrily given the severity of the Great Recession, about the paucity in state funding. Some have even argued that public colleges actually need a new funding model.
At the heart of Lariviere’s plan is a request that the state commit to its 2010 level of funding – about $65 million per year – for 30 years, using the funds to pay debt service on bonds worth approximately $800 million. The university would match the bonds with $800 million in private gifts to create a $1.6 billion “public/private” endowment, which would – along with the university’s current $435 million endowment and tuition revenues – sustain university operations within the first year, according to university officials’ estimates.
In making the case to Oregonians, who would have to approve the bonding arrangement through a constitutional amendment, Lariviere has suggested that the predictability of the endowment returns – estimated at an average of 9 percent a year – will allow the university to accurately project stable tuition increases in the neighborhood of 4 to 5 percent a year.
That 9 percent return is perhaps rather optimistic but, according to the article, at least this would allow the university to avoid “frustrating years of legislative sessions that are typically defined by handwringing and disappointment.”
It’s a compelling argument, though it basically gives up on ever getting substantial funding increases from the state or keeping the university truly affordable for low-income Oregonians.