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New Partnership Town Hall: A revised return on investments.

Yesterday’s town hall meeting regarding the new partnership proposal — which some people know as the “OMG I hear Phil Knight is gonna buy UO” proposal — featured President Lariviere, Professor John Chalmers (from the college of business, finance is his deal), as well as a veritable mob of students and other faculty. The meeting began with an overview of the proposal, what it hoped to accomplish and what changes would be made, aided by many pretty graphs.

Lariviere stated that this proposal has three main goals: governance reform, increased accountability, and a new funding agreement with the state. The governance reform would come in the form of a new board that would feature government-appointed members as well as a student and a faculty seat, all with voting powers. This is also alleged to be at least as accountable as the current system, with hopes it will improve accountability.

While those aspects will have some impact, I am willing to bet the key question here that the majority of people who care are asking is, “How will the change in funding affect the UO?” I have heard a good deal of speculation on the subject, although most of it has been from people who heard the words “private funding” and began screeching about how some company will bankroll the UO on the condition it becomes, “Phil Knight’s Football-Tossing Learnatorium” and all non-athletes will be forced to study in the rain while they bulldoze the residence halls to make room for more stadiums. While I suppose that is technically possible, come on; it’s not like that sort of thing can’t kind of happen now, especially if the school receives less and less funding from the state due to budget cuts. According to the figures presented at the meeting, UO has about the same level of funding as it did 20 years ago, which adjusting for inflation means roughly 43% less. Allegedly the tuition hikes as of late are because of this level of state funding, and if this trend continues, similar increases are on the way.

The new proposal would have the state take the money they would normally give as funding to the University and instead use it to fund bonds that the University would match with private donations, and all of these proceeds would go to an endowment estimated at $1.6 billion. The University would use the interest on this endowment to fund its operations in addition to further state funding, the end goal being reduced reliance on state funding. The state would not hand its money over until the University produced matching funds from private donors, and there would be no impact on state funds until 2013 at the very earliest.

The main reasoning behind this is aside from private donations, what the University does not receive from the state it must gain through tuition costs. This proposal would, in theory, alleviate what Lariviere called, “an unfair burden on our students and their families,” and allow the University to more accurately predict its funding each year. Based on fancy presentations from aforementioned finance professor, predictions show that with this proposal, even a good amount from the expected mean would be slightly above expected state contributions. Basically, if this goes as planned, it would almost certainly be at least a minor improvement, with the expectation being roughly twice the state funding UO would receive.

The proposal going as planned will involve two bills passing — Senate Bill 559 and Senate Joint Resolution 20 — as well as fundraising going well. The one concern that surfaces repeatedly is that private fundraising would indenture the UO to some corporation, and indeed, our beloved Cimmeron Gillespie raised this question during Q&A, asking if there had been, “any thought put to the ethics [of fundraising]?” Lariviere pointed out that many public institutions, even without proposals such as these, are presented deals that are not in their best interests, and so they simply turn them down.

Seriously, guys, think about this for a minute: if the University was going to sell itself into some faceless corporation’s arms it probably would have done so by now. The whole reason for this partnership is to generate more funds. The school has had to jack up tuition to pay for things, and if there had been an unscrupulous way to get tons of funding before they would have taken it. They haven’t before, it’s not like the proposal presents some new opportunity to do so. The only question is how much more will the new partnership would generate compared to staying with the current method of funding, and all of the numbers seem hopeful.

TL;DR: This is probably a kinda good to really good thing to happen, and tuition will get really shitty if things stay the way they are. Unless somebody really screws something up, we can probably put faith in the fact that if Lariviere is telling us things rather than clamming up, he’s telling the truth.

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