By TIFFANY CAMHI/Oregon Public Broadcasting

CORVALLIS — In a contentious vote Friday afternoon, Oregon State University’s Board of Trustees approved a proposal to impose the largest tuition increase that the university’s students have seen in years.

OSU’s trustees voted 12-2 to approve a 5.75 percent increase for returning undergraduate students and a bump of 6.25 percent for new incoming students next school year. Graduate students will also see increases at different levels, depending on their program.

At board meetings over the past two days, OSU’s administrative leadership pressed skeptical trustees on the importance of student tuition to the university’s bottom line. But some trustees remained unconvinced that a tuition increase would benefit students and the institution over the long-term.

“The tuition increase that I’m asking for is absolutely essential for the well-being of the university,” OSU President Jayathi Murthy told trustees on Friday. “I don’t make these kinds of recommendations lightly.”

OSU’s weighted average tuition increase for resident undergraduate students is 4.97 percent, barely squeaking by the 5 percent cap set by the state’s Higher Education Coordinating Commission. This follows increases of similar sizes over the past two years.

Oregon State undergraduate student trustee Lauren Camou appeared doubtful that the proposed tuition hike would help the university in its mission to provide access to a high quality and affordable education for students.

“How exactly does the 4.97 percent increase meet those objectives?” Camou asked administrators. “Because from what I see, it would only harm marginalized and underrepresented students.”

Camou voted against the proposal. Friday’s vote came a day after OSU’s finance committee voted against recommending the tuition proposal to the full board.

Other trustees said they were unwilling to let students bear the brunt of OSU’s financial burdens and chastised administrators for only providing one tuition setting scenario to consider.

Budget gap widens

Tuition dollars make up more than half, 57 percent, of Oregon State’s operating revenue. And that revenue source is becoming even more important now as the university’s budget shortfall grows larger.

According to recently updated quarterly budget documents, OSU’s operating expenses are projected to outpace its revenues by about $14 million by the end of this fiscal year. That’s $2 million more than the university estimated in January. The deficit is largely driven by missed enrollment goals in OSU’s Ecampus.

“We will have a projected gap of $54.5 million next year,” Hoʻā said Friday. “I need you to see the full weight of what we are grappling with here.”

The university’s financial strains come despite nearly 30 consecutive years of enrollment growth at OSU, which is usually a strong indicator of a university’s health.

But Oregon State is still confronting the same headwinds that other higher education institutions in the state are facing: a projected decline in traditional college-age students, increasing personnel costs and stagnant state support.

OSU leaders said expenses, namely the costs to cover salaries and state benefits, are outpacing revenues. Seventy-eight percent of Oregon State’s operating expenses goes toward its workforce. In January, OSU launched a pair of efforts to streamline the university’s finances and administrative work processes. But cost savings from those initiatives won’t come for a few more years.

And without more money coming from state lawmakers, student tuition is one of the few remaining tools the university has to get out of the red in the short-term.

Any lower tuition increase, Hoʻā said, would come at the cost of OSU’s workforce and programs.

“We’ve already pulled the low-hanging fruit,” Hoʻā said at the trustee’s finance committee meeting on Thursday, referencing the more than $40 million in budget cuts that went into effect this school year.

“We’re starting to get into the muscle and the bone of the university and that’s something that really needs careful consideration,” she said.

OSU leaders said workforce cuts would hamper the university’s retention and student support efforts. It could also hamstring several initiatives aimed at expanding the university and driving up enrollment.

Murthy said she takes the issue of student cost seriously. But she was confident Friday that OSU will be able to ramp up fundraising for student aid, which could partially make up for the tuition hike.

Murthy noted that even with the new increase, Oregon State will still have a deficit of about $31 million next fiscal year. But what she wants to avoid, she said, is the downward economic spiral that some of the state’s other institutions, like Portland State and Southern Oregon universities, are facing now.

“As Oregon’s largest university, as its only land-grant university with extraordinary reach all across the state, we cannot afford to get into a spiral,” she said. “We cannot put our university into a spiral that we cannot get out of.”