Lawmakers mull $15M in emergency funding for Southern Oregon University

Dive Brief:

State lawmakers in Oregon are weighing a $15 million emergency infusion for Southern Oregon University, which faces a looming cash crunch. 
A joint committee in the state’s Legislature adopted an amendment Wednesday to a budget bill that would appropriate the funds to the Higher Education Coordinating Commission to provide “short-term financial stability” for SOU. 
University leaders sounded alarms last month about “significant liquidity risks” and an “urgent operational reality” due to its expenses outweighing incoming cash. 

Dive Insight:

As of Wednesday afternoon, the Oregon bill was in committee before going to the full House, with the state’s legislative session set to end March 8. The measure, if approved, would provide critical funding for the university and potentially avert a dangerous cash shortfall. 

The $15 million includes up to $1 million for financial, legal, real estate and other expertise SOU may seek out to help it right its fiscal ship. 

Per the measure, the state’s higher education commission and SOU would need to submit a report in April to the Legislature detailing how the university plans to keep operating through June 2027, according to a summary of the bill. In May, SOU would have to start providing monthly financial statements and updated cash flow forecasts to the commission and the Legislature. 

Moreover, SOU and the commission would need to develop a plan by April for “future delivery of higher education in southern Oregon, without reliance on ongoing increases in state support.” The plan would need to include a blueprint for balancing SOU’s budget by the 2027-2029 fiscal biennium. 

“This is really good news for the moment for SOU,” said State Rep. Pam Marsh, who represents the university’s home county, according to Oregon Public Broadcasting. “The good news comes with a big caveat, which is that this work of looking at the 27-29 biennium can’t be underestimated. It is a huge undertaking for the next two months.”

The university declined to comment before the legislative session had finished. 

On its current trajectory, SOU could fail to meet its financial obligations by spring 2027, senior leaders said in an early February presentation.

The university faces monthly spending on labor expenses that hover around $5.7 million, but its revenue stream varies due to students paying their tuition bills at different times and state appropriations paying out quarterly. SOU administrators said they fear that the university’s cash reserves will deplete rapidly without more funds. Projections put SOU on a path to have a cash hole of just under $826,000 by next March. 

 Along with the short-term fiscal woes, SOU has seen total student credit hours decline annually since the 2017-18 academic year, according to last month’s presentation. In the current academic year, credit hours are down 3.4% year over year and 35.8% from 2015-16 levels. 

Between 2015 and 2024, fall enrollment dropped about 16% to 5,113 students, per federal data. The declines impact both tuition revenue and state funding, which is tied to the number of credit hours students complete.

In September, SOU’s board voted to eliminate 23 programs and lay off 18 employees after years of “unprecedented fiscal crises.” The cuts came as leaders said SOU could no longer function as “a comprehensive university.”