The university is in a challenging financial position. This year, our E&G fund budget expenses are projected to be larger than revenue, and current projections show this gap growing over the next five years. This isn’t sustainable. Rising personnel costs, state-mandated retirement and healthcare programs, and dramatic increases in the cost of insurance and utilities are all contributing factors. We are also heavily reliant on non-resident tuition, which makes us vulnerable to enrollment fluctuations. Demographic shifts, skepticism about higher education, and increased competition have made this situation more complex and challenging.

While it’s true that state support and tuition revenue have increased, these increases haven’t kept pace with the rapidly rising costs of providing a world-class education. Personnel costs, including salaries, benefits, and PERS, have grown significantly, as have institutional expenses such as insurance and utilities, and necessary investments in facilities, technology, and student support services. We must consider all these factors when assessing the university’s overall financial health in a national climate with considerable economic challenges for higher education.

Oregon ranks 44th in the country in terms of state funding per student for four-year universities. This puts us at a significant disadvantage compared to our peer institutions in other states, limiting our financial flexibility and making it harder to invest in our faculty and students the way we want to. We are fighting hard in Salem for increased state support, but the state’s budget and the Governor’s priorities have not historically been focused on higher education. aaaaaa The Governor just released her recommended budget, and it includes a 2.8% increase in FY2026 to the Public University Support Fund, the main budget that funds university operations. The legislature will consider this funding level in the Spring. We cannot expect funding will significantly increase overnight when policymakers have competing interests in programs like K-12 education, the department of human services, and housing. Even if this budget passes it will be below what the public universities believe is necessary to sustain current operating levels and state funding will be increasing at a slower rate than anticipated cost increases at the UO in the coming year.

The university is fortunate to have wonderful alumni and donors who contribute to the institution’s endowment. The vast majority of these funds, however, are legally restricted for a particular purpose (e.g., scholarship fund, building project, professorship) and cannot be used for other purposes.

The UO Athletics Department is one of only a handful of programs in the U.S. that is self-sufficient, receiving no funding from tuition or any state general funds and, in fact, pays an overhead assessment of over $4 million per year to the university and also covers the full cost of all scholarships for student athletes. Athletics Department revenues and expenditures equal each other and do not generate a surplus.

The stark reality is that our current financial challenges make it impossible to offer the salary increases the union is requesting without dramatic changes to how we support our students’ education. We are committed to investing in our faculty, but we must also live within the financial realities that exist to ensure the long-term health of the institution. We believe that open and honest negotiations with the faculty union are essential to finding a path forward that works for everyone and ensures we have the resources in the classroom and outside of it to support our students.

A: We respect the union’s right to express their views and advocate for their members. We remain committed to engaging in productive dialogue at the bargaining table and working toward a resolution that benefits both the faculty and the university. aaaa We believe that by working together, with mutual respect and open communication, we can reach an agreement that supports our faculty, protects our students, and ensures a strong future for the University of Oregon.

We encourage open and honest dialogue within the UO community. We will continue to provide updates and opportunities for engagement throughout the negotiation process. We believe that a shared understanding of the challenges and opportunities facing the UO is crucial to reaching a positive outcome.

Our students are at the center of our mission. We are fiercely dedicated to providing them with a world-class education. Making responsible financial decisions today is paramount to protecting the UO experience for generations to come. We are committed to ensuring accessibility for all people who dream of pursuing higher education — including low-income and first-generation students.