CORVALLIS - Oregon State University plans to increase the base budget of its Department of Intercollegiate Athletics budget by up to $2 million next year, using an increase in institutional funds to create a stable funding base that will allow the department to remain competitive without creating additional budget deficits.
The university also will request of its students an increase in recurring fee support of up to $1 million in each of fiscal years 2001 and 2002. OSU officials also say that an allocation of $2.5 million to the athletic department from the university during 1998 and 1999 will not have to be repaid.
The proposals are in response to a mandate by the Oregon State Board of Higher Education that the university present a plan for a balanced athletic department budget, while reducing existing debt and remaining competitive in the Pacific-10 Conference.
"We need to recognize that athletics is an integral part of the OSU student experience and a vital component of the university community," said Robert M. Specter, vice president for finance and administration at Oregon State.
Specter and Mitch Barnhart, director of intercollegiate athletics, presented an overview of OSU's athletics finances at the April meeting of the Oregon State Board of Higher Education Executive Committee. The athletic department had accumulated a debt that reached $8.2 million by 1998. The board mandated that the debt be reduced to $6.0 million by this June 30, and that the university address the funding situation with a viable long-term solution.
"The department, through its new leadership, has made remarkable progress in boosting revenue through ticket sales and fund raising," Specter said. "Statewide enthusiasm for OSU athletics is tremendous."
The hiring of football coach Dennis Erickson has fueled a rush on season tickets, which set an all-time sales record for OSU, and scholarship giving has roughly tripled.
"The program should not be expected to be completely self-sustaining," Specter said. "Few, if any, athletic programs in the nation are fully self-supported and we should not have any illusions that ours will be so. Having said that, we would like the program to be as revenue productive as possible, with budget support coming from a multitude of sources, including sales, sponsorships, gifts, institutional funds, conference monies and student fees."
"We need to recognize the value our intercollegiate athletics program brings to the university and its constituencies, set in the context of an excellent teaching and research university," Specter added.
The current athletic deficit arose primarily from a gap between scholarship costs and income, Specter pointed out. During the last 10 years, tuition has risen more than 80 percent and private gifts used to fund those scholarships - though they have increased - haven't kept pace. Student fee support is the lowest among the three largest Oregon universities.
Specter said the university will work to eliminate the prohibition of Oregon universities from granting tuition waivers for student athletes.
"We grant tuition waivers for graduate students, recognizing that they fill an important role on campus," Specter said. "The same logic should hold for our student athletes. We should fund scholarships in the same manner as our PAC-10 competitors outside Oregon."
The university expects to use a combination of increased institutional funds and student fee support to give the new departmental administration a "stable funding platform, from which no additional deficit spending would occur," Specter said.
Accountability is the key, according to Barnhart, who added that the department is committed to living within its means.
"Once we're on a level fiscal playing field, we'll compete with the best programs in the conference," Barnhart said. "We want to move toward returning investment in athletic programs back into academic departments. This will build greater integration between athletics and academics for our entire student body."
Last year, the university provided the athletic department $1.5 million to cover rising tuition costs and other expenses. OSU will allocate the athletic department an additional $1 million this year to help the department meet its obligation of reducing its debt to $6.0 million. The total of $2.5 million will not be repaid, Specter said.
OSU officials will present the proposals to the Oregon State Board of Higher Education later this month, and continue meeting with student, faculty and administrative groups on campus through the summer and into next year.
The budget proposals are part of a comprehensive allocation process currently under way on campus.
"We are committed to discussing fully and publicly these issues with the campus community," Specter said. "These discussions already have begun and will continue throughout the coming academic year."